2019 (5) TMI 1806 - AT - Income Tax

Rectification of mistake - claim of deduction U/s 54F - Non consideration of the cited decision and the Written Submission etc. AND size of house constructed by the assessee is not relevant part allowing the deduction U/s 54F of the Act therefore the observation of the Tribunal in para 5 that the assessee has constructed only 18% of the land is also against the precedent cited by the assessee - HELD THAT - Copies of the decisions relied upon by assessee are also on record of the appeal file and those decisions have some relevance on the issue of allowing the deduction U/s 54F in respect of more than one plot of land and construction of a house. Since the Tribunal while passing the impugned order has not considered those decisions and the impugned order is completely silent about the decision relied upon by the assessee. Therefore in our considered view there is a mistake in the impugned order to the extent of not considering the decisions relied upon by the assessee. Constructed area - Finding of the Tribunal is not based on the constructed area but only for recording the complete facts the percentage of the construction was mentioned in the impugned order. Even the AO as well as ld. CIT(A) while allowing the deduction in respect of cost of one plot of land and construction of house has not taken the percentage of covered area as ground for disallowance. Since the decision relied upon by the assessee having relevance on the issue are not considered by the Tribunal therefore the said mistake is required to be rectified - Miscellaneous application is allowed.

Summary

Issues:
Recalling of Tribunal order for assessment year 2009-10 due to non-consideration of relevant decisions and submissions in respect of deduction U/s 54F of the Income Tax Act.

Detailed Analysis:
1. Mistake 1: The assessee contended that the Tribunal did not consider various decisions and submissions, including a CBDT circular, which were directly applicable to the issue of deduction U/s 54F. The appellant argued that if these decisions were taken into account, the outcome of the order might have been different. The Tribunal acknowledged the mistake of not considering these decisions and ordered a fresh hearing to rectify the error.

2. Mistake 2: The Tribunal incorrectly noted the percentage of construction on a plot, which was not the basis for disallowance. The appellant cited a decision by the ITAT Jaipur bench, highlighting that even a small construction on a large plot could be eligible for deduction U/s 54 of the Act. The Tribunal agreed that this mistake needed rectification and ordered a fresh hearing to consider the relevant decisions cited by the appellant.

3. Mistake 3: The Tribunal made a factual finding regarding the usage of separate plots by the assessee, which was contrary to the actual situation where all plots were jointly used. The appellant argued that the Tribunal's observation was incorrect and not supported by the facts on record. The Tribunal acknowledged this mistake and decided to recall the order for fresh adjudication.

4. Mistake 4: Another incorrect finding by the Tribunal was regarding the purpose of constructing a boundary wall around the plots. The appellant clarified that the construction was for a specific purpose, as detailed in submissions made before the CIT(A) and the Tribunal. The Tribunal recognized this error and ordered a fresh hearing to consider all relevant submissions.

5. Mistake 5: The Tribunal failed to consider the liberal interpretation of incentive provisions due to the eligibility of the assessee for the deduction. The appellant highlighted the need for a liberal interpretation in such cases, which was overlooked by the Tribunal. Although the appellant did not press this mistake during the hearing, the Tribunal acknowledged the oversight and decided to recall the order for a fresh hearing.

In conclusion, the Tribunal allowed the miscellaneous application, recalling the order dated 13.02.2018 for the assessment year 2009-10. The Tribunal recognized the mistakes in not considering relevant decisions and submissions by the assessee, leading to an incorrect outcome. The fresh hearing was directed to consider all cited decisions and submissions for a fair adjudication of the appeal.