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2018 (2) TMI 1982 - AT - Income TaxRectification u/s 254 - Exemption u/s 10(37) - determination of assessability of interest received by the assessee as part of the enhanced compensation against the acquisition of agricultural land owned by the assessee - HELD THAT - In view of the settled position of law on the issue in appeal as on date, is that as laid down in the case of Ghanshyam HUF 2009 (7) TMI 12 - SUPREME COURT and reiterated in the case of CIT Vs. Govindbhai Mamaiya 2014 (9) TMI 587 - SUPREME COURT .The ITAT having followed the proposition laid down in the aforesaid decisions while rendering its judgement, therefore, there is clearly no error in the said order. Even otherwise, powers of the Tribunal u/s 254 of the Act are very limited and are restricted to rectifying only apparent errors and it has no power to review. The Hon ble Bombay High Court in the case of Commissioner Of Income-Tax vs Ramesh Electric And Trading Co. 1992 (11) TMI 32 - BOMBAY HIGH COURT while relying upon the decision of the Hon ble Supreme Court in the case of T. S. Balaram, ITO v. Volkart Brothers 1971 (8) TMI 3 - SUPREME COURT and further relying upon the decisions of the various High Courts has categorically held that the power of rectification under section 254(2) of the Income-tax Act can be exercised only when the mistake which is sought to be rectified is an obvious and patent, which is apparent from the record, and not a mistake which is required to be established by arguments and a long drawn process of reasoning on points on which there may conceivably be two opinions. Misc. Applications are hereby dismissed.
Issues Involved:
1. Assessability of interest received as part of enhanced compensation for agricultural land acquisition. 2. Rectification of ITAT's order based on subsequent jurisdictional High Court decisions. Issue-wise Detailed Analysis: 1. Assessability of Interest Received as Part of Enhanced Compensation for Agricultural Land Acquisition: The primary issue in this case was the determination of whether the interest received by the assessee as part of the enhanced compensation for the acquisition of agricultural land should be treated as part of the compensation or as 'Income from Other Sources' under Section 56 of the Income-tax Act, 1961. The ITAT had previously ruled that the interest received under Section 28 of the Land Acquisition Act, 1894, was part of the compensation and thus eligible for exemption under Section 10(37) of the Income-tax Act, following the Supreme Court's decision in 'CIT Vs. Ghanshyam HUF' (315 ITR 1). The Revenue, however, contended that subsequent decisions by the Punjab & Haryana High Court, particularly in 'CIT, Faridabad Vs. Bir Singh HUF' and 'Manjeet Singh (HUF) Vs. Union of India', classified such interest as taxable under Section 56 as 'Income from Other Sources'. The Revenue argued that these High Court decisions superseded the ITAT's earlier ruling, making the interest taxable. 2. Rectification of ITAT's Order Based on Subsequent Jurisdictional High Court Decisions: The Revenue sought rectification of the ITAT's order, arguing that the subsequent High Court rulings had rendered the ITAT's decision erroneous. The Revenue relied on the principle that a subsequent decision of the High Court or Supreme Court, which lays down the law as it always existed, can be grounds for rectification of an earlier order. The Ld. DR contended that the ITAT had misinterpreted the Supreme Court's decision in 'Ghanshyam HUF' and that the High Court's interpretation in 'Bir Singh HUF' and 'Manjeet Singh HUF' correctly classified the interest as taxable under Section 56. The Ld. DR also pointed out that the Apex Court's subsequent decision in 'CIT Vs. Govindbhai Mamaiya' reaffirmed the principles laid down in 'Ghanshyam HUF', maintaining that interest under Section 28 of the Land Acquisition Act is part of the enhanced compensation. The ITAT, however, found no merit in the Revenue's applications for rectification. The Tribunal noted that the ITAT's original decision was in line with the Supreme Court's ruling in 'Ghanshyam HUF', which had been subsequently reaffirmed by the Apex Court in 'Govindbhai Mamaiya'. The ITAT emphasized that the law as laid down by the Supreme Court takes precedence and that the conflicting High Court decisions did not constitute an apparent error on the record that could be rectified under Section 254 of the Income-tax Act. The Tribunal also highlighted that its powers under Section 254 are limited to rectifying obvious and patent errors and do not extend to reviewing its decisions based on subsequent conflicting judgments. The ITAT concluded that since its original decision followed the Supreme Court's ruling, there was no error apparent on the record, and hence, no grounds for rectification existed. Conclusion: The ITAT dismissed the Revenue's Miscellaneous Applications, affirming that the interest received under Section 28 of the Land Acquisition Act forms part of the enhanced compensation and is exempt under Section 10(37) of the Income-tax Act, as per the Supreme Court's rulings in 'Ghanshyam HUF' and 'Govindbhai Mamaiya'. The Tribunal reiterated that its powers under Section 254 are limited to correcting apparent errors and do not include reviewing decisions based on subsequent conflicting judgments.
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