2014 (11) TMI 340 - AT - Income Tax

Miscellaneous Application Rectification of mistake apparent from record or not - Applicability of section 50C Speaking order passed by Tribunal or not Held that - A plain reading of section 50C as a whole makes it clear that filing of an appeal against valuation made by the stamp duty valuation authority for stamp duty purposes only makes the provision contained u/s 50C(2) inapplicable - the Tribunal while considering assessee s appeal has exhaustively dealt with the terms and conditions of the special power of attorney and has held that nowhere it speaks of transfer of plot in the name of Smt. Neeraja Reddy - there is no documentary evidence to show that physical possession over the property was actually handed over in favour of Smt. Neeraja Reddy except recitals in the sale deed - If assessee s claim that the property was transferred to Smt. Neeraja Reddy in 1994 is correct, then, there was no necessity of assessee taking responsibility of indemnifying purchaser in the event of any future claim over the property. The Tribunal has not only given a finding that there is no proof of payment of sale consideration of ₹ 1 lakh by Smt. Neeraja Reddy to assessee but the fact that assessee applied for permission to construct a house over the said plot in 2006 also proves that assessee was the owner of the property till it was sold to Shri G. Srinivas Reddy in the AY - the assessee herself declared the capital gain in the impugned AY and not in any earlier AY - the contention of assessee that Tribunal has committed a mistake by not taking into consideration all these facts and evidences while considering assessee s submission in respect of applicability of section 50C is without merit - the Tribunal consciously came to a conclusion that the property was transferred by assessee in the AY and upheld the applicability of section 50C. - Rectification denied on this ground. The Tribunal has taken a decision in respect of the year of taxability on capital gain as well as the application of section 50C on overall consideration of facts and materials on record as well as the submissions made by parties, there is no reason to accept assessee s contention that the order by the Tribunal is erroneous - assessee is only trying to reargue his case and wants a review of the order passed by the Tribunal This is not within the scope and ambit of section 254(2) of the Act, which envisages rectification of mistake apparent on the face of record Tribunal has not given any finding either way on the aforesaid grounds raised by assessee - Therefore, there is a mistake in the order of the Tribunal to that extent - Decided partly in favour of assessee.

Summary

Issues Involved:
1. Applicability of Section 50C of the Income Tax Act.
2. Non-consideration of evidences and submissions by the Tribunal.
3. Non-decision on ground Nos. 8 & 9 by the Tribunal.

Issue-wise Detailed Analysis:

1. Applicability of Section 50C of the Income Tax Act:
The assessee contended that Section 50C should not apply as the property valuation for stamp duty purposes was challenged before the Collector and District Registrar, falling under the exception in Section 50C(2)(b). Additionally, the assessee argued that Section 50C is inapplicable since the property transfer occurred in 1994, before the section's enactment. However, the Tribunal found these arguments meritless, stating that challenging the stamp duty valuation does not affect the applicability of Section 50C(1). The Tribunal also noted that despite the assessee's claims, there was no concrete evidence proving the transfer of the property to Smt. Neeraja Reddy in 1994. The Tribunal concluded that the property transfer occurred in the assessment year under consideration, thus upholding the applicability of Section 50C.

2. Non-consideration of Evidences and Submissions by the Tribunal:
The assessee argued that the Tribunal failed to consider key evidences, including a letter submitted to the Jubilee Hills Cooperative House Building Society in 1997, and a special power of attorney. The Tribunal clarified that while the letter dated 20/04/94 was submitted in 1997, it did not conclusively prove the transfer of property. The special power of attorney did not indicate a transfer to Smt. Neeraja Reddy. The Tribunal also noted that the High Court's order in a writ petition did not specifically refer to the assessee or the property in question. Additionally, the sale deed executed in 2007 indicated that the assessee retained ownership and other rights over the property, contradicting claims of a 1994 transfer. The Tribunal emphasized that all relevant materials and submissions were considered before concluding that the property transfer occurred in the impugned assessment year.

3. Non-decision on Ground Nos. 8 & 9 by the Tribunal:
The Tribunal acknowledged the assessee's contention that ground Nos. 8 & 9 were not addressed in the original order. Upon review, the Tribunal found merit in this claim and recognized it as a mistake. Consequently, the Tribunal recalled the order dated 04/04/2014 for the limited purpose of deciding ground Nos. 8 & 9 on their merits. The registry was directed to schedule a hearing for these specific grounds.

Conclusion:
The Tribunal dismissed the assessee's contentions regarding the applicability of Section 50C and the alleged non-consideration of evidences, finding no merit in these arguments. However, it acknowledged the oversight in not addressing ground Nos. 8 & 9, leading to a partial allowance of the Miscellaneous Application for the limited purpose of reconsidering these grounds. The decision was pronounced in open court on 29/10/2014.