JUDGMENT
1. The appeal was admitted in terms of the following question of law :
“Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in admitting the miscellaneous application when there was no apparent mistake rectifiable under Section 254(2) of the IT Act and directing application of net profit rate of 8 per cent subject to interest and depreciation?”
2. The assessee is a civil contractor. He declared his income of Rs. 1,32,010, The assessment was made under Section 143(3) of the IT Act, 1961 (hereinafter referred to as ‘the Act of 1961’).
3. During the assessment, the AO noticed that the assessee has disclosed net profit rate 5 per cent and 7 per cent in the asst. yrs. 1993-94 and 1994-95, respectively. That rate was enhanced by the AÖ at 15 per cent for both the years and in appeal filed before the CiT(A). The CIT(A) has reduced it to 12-1/2 per cent. Both the authorities applied this rate subject to interest and depreciation.
4. In iurther appeal, before the Tribunal, the Tribunal has reduced it to 8 per cent, but no reference was made on interest and depreciation. Thereafter, the petitioner moved the miscellaneous application and, in the miscellaneous application, the Tribunal has added in its order 8 per cent rate, subject to interest and depreciation, for the asst. yrs. 1993-94 and 1994-95.
5. Heard learned counsel for the parties.
6. While considering the net profit rate, in the appeal order, the Tribunal itself has considered the issue, in detail, in para 9 of its order dt. 5th Nov., 2001, which reads as under ;
“9. It is observed that the assessee declared 5.31 per cent and 7 per cent NP rate for asst. yrs. 1993-94 and 1994-95, respectively. The AO had applied NP rate of 15 per cent without relying on any material in the shape of comparable case and similarly the learned CIT(A) also reduced it to 12.5 per cent without relying on any comparable cases. We are of the considered view that reference to comparable cases at the time of hearing before the Tribunal is of no help and such cases cannot be considered the basis as the facts of these cases had not been confronted to the assessee and even the nature of business had not been discussed. However, in our opinion, reference can be made to Section 44AD where in NP rate of 8 per cent of gross receipts had been considered reasonable in the case of an assessee engaged in the business of civil construction supply of labour for civil construction, This section is not directly applicable to the facts of the case. However, inference can be drawn for reasonability of applicability of NP rate. Therefore, we direct the AO to apply NP rate of 8 per cent in both the cases for the asst. yrs. 1993-94 and 1994-95, respectively and allow the relief accordingly to the appellant.”
Thereafter, on a miscellaneous application, the Tribunal has taken the view that the rate of 8 per cent will be subject to allowance and interest, The miscellaneous application was moved under Section 254(2) of the Act for correcting apparent mistake on record.
7. On perusal of para 9, wherein the Tribunal has discussed in detail and taken the view of 8 per cent net profit rate, which cannot be said that there is apparent mistake in para 9 of the order of the Tribunal, which can be corrected in the miscellaneous application moved under Section 254(2) of the Act. Therefore, in our considered view, the Tribunal has committed error in allowing the 8 percent net profit rate, subject to depreciation and interest.
8. In the result, the order of the Tribunal passed on miscellaneous application dt. 24th April, 2002, is wrong. In fact, there was no apparent mistake in appeal order, which can be corrected under Section 254(2) of the Act, 1961.
9. The appeal Stands allowed.