2018 (12) TMI 1772 - AT - Income Tax

Rectification of mistake u/s 254 - denial of claim of deduction u/s.10(2A) - ITAT set aside the order of the ld. CIT(A) which held that the receipt should be treated as capital receipt - ITAT has also set aside the order of the ld. CIT(A) regarding the adjustment of the said amount from computation of book profit u/s. 115JB - HELD THAT - Assessee is pointing out the various submissions and the paper book submitted and wants a reconsideration of the issues decided by the ITAT. We find that section 254(2) of the Act mandates rectification of the mistake apparent from the record. The request of reconsideration as made by the ld. Counsel of the assessee throughout his submissions does not come under the purview of rectification of mistake apparent from the record. What the ld. Counsel of the assessee is seeking is the review of the order of the Tribunal which is not permissible under the Act. We place reliance upon the decision of Hon'ble jurisdictional High Court in the case of CIT vs. Ramesh Electric and Trading Co. 1992 (11) TMI 32 - BOMBAY HIGH COURT as referred to and drawn strength from the case of T.S. Balaram, ITO v. Volkart Bros. 1971 (8) TMI 3 - SUPREME COURT wherein held mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. A decision on a debatable point of law is not a mistake apparent from the record From the above it is clear that wrong appreciation of facts or wrong appreciation of case laws may be an error in judgement but they do not constitute mistake apparent from record. Issue pointed out by the ld. Counsel of the assessee do not fall under the realm of mistake apparent from the record liable to be rectified u/s. 254(2) of the Act. It is settled law that reappreciation/ re-adjudication is not permissible in the garb of the rectification of mistake in the order of the Tribunal. Miscellaneous applications by the assessee are dismissed.

Summary

Issues Involved:
1. Assessment of income tax appeals regarding exemption u/s. 10(2A) and capital receipt.
2. Correction of mistakes apparent from the record in the ITAT's order.

Analysis:

Issue 1: Assessment of Income Tax Appeals
The tribunal considered the case where the assessee, a company, retired from a partnership firm and received a sum over and above its due amount from the firm. The tribunal analyzed whether the sum received was exempt u/s. 10(2A) or considered a capital receipt. It was observed that the revaluation reserve claimed by the assessee was not valid as there was no revaluation of any asset, and the company could not credit the entry to the revaluation reserve. The tribunal held that the amount received could not be exempt u/s. 10(2A) as the assessee was no longer a partner in the firm. Additionally, the tribunal found that the sum received was not a capital receipt as the retirement deed indicated that the assessee had relinquished its rights in the firm's assets. Consequently, the tribunal upheld the assessing officer's decision and denied the claim of deduction u/s. 10(2A) and set aside the order regarding the amount being a capital gain.

Issue 2: Correction of Mistakes Apparent from the Record
The assessee filed miscellaneous applications seeking correction of mistakes apparent from the record in the ITAT's order. The counsel argued that there were errors in the order related to the consideration of the change of name post-amalgamation, the amount received by the assessee, and the conclusions drawn by the ITAT. However, the tribunal noted that the requests for reconsideration made by the assessee did not fall under the purview of rectification of mistakes apparent from the record. It was emphasized that rectification under section 254(2) of the Act is limited to obvious and patent mistakes, not errors requiring a long process of reasoning. The tribunal cited legal precedents to support the decision that wrong appreciation of facts or case laws may be an error in judgment but not a mistake apparent from the record. Consequently, the miscellaneous applications by the assessee were dismissed.

In conclusion, the tribunal's judgment addressed the assessment of income tax appeals regarding exemption u/s. 10(2A) and capital receipt, along with the correction of mistakes apparent from the record in the ITAT's order. The decision provided detailed analysis and legal reasoning to support the conclusions reached in each issue, ensuring a thorough examination of the case.