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Issues involved: The judgment addresses the question of whether the decision of the Tribunal in a specific application amounted to a review of its own order, which was not permissible under section 254(2) of the Income-tax Act, 1961.
Exemption Claim under Section 54: In the assessment proceedings, the assessee claimed exemption under section 54 of the Act on the sale of a house in Bombay. The Tribunal initially rejected this claim, stating that the house was owned by a group of owners constituting an artificial juridical person. It also found no evidence to support that the floor area in the assessee's self-occupation exceeded that of a tenant named Shetty. Nature of Capital Gain: Another issue was whether the capital gain from the house sale would be short-term or long-term. The Tribunal initially determined it to be short-term capital gain. However, after a rectification application, it revised its decision, stating that the property was owned by the assessee, his wife, and a minor child, and that the capital gain was long-term. Rectification u/s 254(2) of the Act: The Tribunal's rectification of its earlier order was challenged, questioning whether it amounted to a review or rectification of a mistake. The court found that the rectification fell within the purview of section 254(2) as a mistake apparent from the record, which was brought to the Tribunal's notice within the stipulated time frame. The rectification was deemed permissible under the Act. Conclusion: The court concluded that the Tribunal's decision in the application was not a review of its previous order but a rectification of a mistake, allowed under section 254(2) of the Act. It was noted that the rectification aligned with the findings of the Income-tax Officer and the Commissioner of Income-tax, which had not been challenged by either party. The judgment clarified the distinction between review and rectification, affirming the Tribunal's authority to rectify mistakes within the specified timeframe.
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