2020 (2) TMI 1173 - AT - Income Tax

Rectification application u/s 254 - provisions of section 56(2)(vii)(b) are not applicable is founded on the argument that the immovable property is received without consideration - HELD THAT - In the instant case, there is no dispute that the Agreement for Sale is dated 10.09.2014. We have held that the Letter of Allotment dated 27.04.2012 which has been produced at para 4 hereinabove cannot be considered as the date of execution of agreement by any stretch of imagination. In this context, we have relied on the judgment of the Hon'ble Supreme Court in Alapati Venkataramiah v. CIT Alapati Venkataramiah v. CIT 1965 (3) TMI 21 - SUPREME COURT , CIT v. Podar Cements Pvt. Ltd. 1997 (5) TMI 2 - SUPREME COURT wherein it is held that once the executed documents are registered, transfer will take place on the date of execution of documents and not on the date of registration of documents. It is well-settled that immovable property is not conveyed by delivery of possession, but by a duly registered deed. Further, it is the date of execution of registered document, not the date of delivery of possession or the date of registration of document, which is relevant. In the instant case, the Agreement for Sale is dated 10.09.2014. Section 56(2)(viii)(b)(ii) clearly stipulates that where any immoveable property is received for a consideration which is less than the stamp duty value of the property by an amount exceeding ₹ 50000/-, the stamp duty value of such property as exceeds such consideration , shall be chargeable to tax in the hands of the individual or HUF as income from other sources. It is applicable from A.Y. 2014-15. Thus it is crystal clear that the aforesaid section is applicable to the instant case. In the written submission filed by the assessee before the CIT(A), it has been mentioned at page 3 that the provisions of section 56(2)(vii)(b) was introduced by the Finance Act, 2013 w.e.f. 01.04.2014 and hence, the amended provision is not applicable to the case of the assessee, since the appellant was entitled to the immovable property during the AY 2013-14. The same submission was reiterated during the course of hearing and hence, it cannot be said that it was never mentioned. The decision of the Hon'ble Supreme Court in the case of National Cement Mines Industries Ltd. 1961 (1) TMI 11 - SUPREME COURT has been referred in the impugned order just to explain that in construing a commercial transaction the true nature and character of the transaction have to be ascertained from the covenants of the contract in the light of the surrounding circumstances. There is no mistake in referring to the above decision of the Hon'ble Supreme Court because only a settled principle has been illustrated therein. The conclusion in the impugned order is based on the judgment of the Hon'ble Supreme Court in the case of Alapati Venkataramiah (supra) and Podar Cements (P.) Ltd. (supra). A perusal of the above facts clearly indicate that the applicant has not pointed out any mistake apparent from the record. A mistake apparent on the record must be an obvious 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. What the applicant wants is a review of the order passed by the Tribunal. The Tribunal is a creature of the statute. The Tribunal cannot review its own decision unless it is permitted to do so by the statute. - MA rejected.

Summary

Issues Involved:
1. Applicability of pre-amended vs. amended provisions of Section 56(2)(vii)(b) of the Income Tax Act.
2. Consideration of the date of the "Letter of Allotment" vs. the "Agreement for Sale" for tax purposes.
3. Tribunal's power to review its own order under Section 254(2) of the Income Tax Act.

Issue-wise Detailed Analysis:

1. Applicability of Pre-amended vs. Amended Provisions of Section 56(2)(vii)(b):
The applicant argued that the pre-amended provision of Section 56(2)(vii)(b) should be considered, as the immovable property was not purchased without consideration. They contended that the provisions of the un-amended Act should apply because the letter of allotment was issued on 27.04.2012, before the amendments introduced by the Finance Act, 2013, which took effect from 01.04.2014. The Tribunal, however, decided the case based on the amended provisions, specifically Section 56(2)(vii)(b)(ii), which applies to transactions where the consideration is less than the stamp duty value by an amount exceeding ?50,000. The Tribunal held that the amended provision was applicable as the "Agreement for Sale" was dated 10.09.2014, falling within the assessment year 2015-16.

2. Consideration of the Date of the "Letter of Allotment" vs. the "Agreement for Sale":
The applicant contended that the "Letter of Allotment" dated 27.04.2012 should be considered the date of acquisition of the property, arguing that it formalized the transaction. They cited the case of Pr. CIT v. Vembu Vaidyanathan, where the date of allotment was considered the date of acquisition. However, the Tribunal distinguished this case, stating that in the instant appeal, the issue was not the allotment in a construction scheme promised by the builder. The Tribunal relied on the Supreme Court judgments in Alapati Venkataramiah v. CIT and CIT v. Podar Cements Pvt. Ltd., which held that the transfer of immovable property occurs on the date of execution of the registered document, not the date of allotment or possession. Therefore, the Tribunal concluded that the "Agreement for Sale" dated 10.09.2014 was the relevant date for tax purposes.

3. Tribunal's Power to Review Its Own Order Under Section 254(2):
The applicant sought rectification of the Tribunal's order, arguing that there were mistakes apparent from the record. They claimed that the Tribunal did not consider certain decisions and facts presented during the hearing. However, the Tribunal emphasized that it does not have the power to review its own decisions unless permitted by statute. The Tribunal cited various judgments, including T.S. Balaram, ITO v. Volkart Bros., to support the view that a mistake apparent from the record must be obvious and not subject to debate. The Tribunal concluded that the applicant had not pointed out any such mistake and was essentially seeking a review of the order, which is not permissible under Section 254(2).

Conclusion:
The Tribunal dismissed the Miscellaneous Application, stating that there was no mistake apparent from the record. The decision was based on the Supreme Court judgments and the provisions of the amended Section 56(2)(vii)(b)(ii). The Tribunal reiterated that it does not possess the power to review its own decisions under Section 254(2) and that the applicant's request was beyond the scope of rectification. The order was pronounced in the open court on 25/11/2019.