2021 (7) TMI 252 - AT - Income Tax

Rectification u/s 254 - stand of the Revenue is that in para-16 of the Tribunal s order, as observed that M/s.Jay Corporation was not the owner of the land for which development agreement was executed but this finding is contradictory to the fact narrated in the confirmation letter written by Shri Naresh M. Shah, proprietor of Jay Construction - HELD THAT - On overall appreciation of all the documents in their setting as a whole, the Tribunal has recorded a finding that Jay Corporation was having development rights. As far as the letter referred by the Revenue dated 2.12.2010 is concerned, in this letter, in para-1 the following narrations is available we had entered into an agreement with the Ganesh Planatation Ltd for construction of building on the land space owned by us . The said agreement was entered into on 26.6.2007 assigning them construction work. On the strength of this paragraph, Revenue is pleading that there is a contradiction in the finding of the Tribunal while taking note of the fact. There is no contradiction. Expression used in this letter is also of building on the land space owned by us i.e. Jay Corporation . This would talk of space i.e. development right on the land. It does not say absolute ownership of the land, and the Tribunal has appreciated this factual position ultimately in the order. Therefore, there is no apparent error in this order of the Tribunal. Misc. Application of the Revenue is devoid of any merit, hence dismissed.

Summary

Issues:
1. Recall of the impugned order based on an apparent error in the Tribunal's order dated 6.12.2016 in ITA No.1520/Ahd/2013 regarding ownership of land.

Analysis:
The Revenue filed a miscellaneous application seeking the recall of the Tribunal's order dated 6.12.2016, alleging an error in para-16 of the order where it was stated that M/s. Jay Corporation was not the owner of the land. The Revenue contended that this finding contradicted a confirmation letter from the proprietor of Jay Construction, which claimed ownership. The Tribunal examined the documents, including the letter dated 23.12.2010 and the agreement dated 27.6.2007, and concluded that Jay Corporation had development rights, not absolute ownership. The Tribunal noted that the letter referred to "construction of building on the land space owned by us," indicating development rights, not ownership. Therefore, the Tribunal found no apparent error in its order and dismissed the Revenue's application.

In the judgment, it was clarified that the power of rectification under section 254(2) of the Income Tax Act can only be exercised for obvious patent mistakes that are apparent from the record. The Tribunal had thoroughly reviewed various documents, including the letter and agreement, to determine the nature of Jay Corporation's rights over the land. The Tribunal's analysis considered the specific language used in the documents to support its finding that Jay Corporation held development rights, not ownership. The Tribunal emphasized that the Revenue's interpretation of the letter did not establish a contradiction in the Tribunal's order, as the letter referred to land space owned by Jay Corporation for construction purposes, indicating a limited right over the land. Consequently, the Tribunal concluded that there was no merit in the Revenue's application for recall, as no apparent error existed in the original order.

Therefore, the Tribunal dismissed the miscellaneous application of the Revenue, upholding its original order dated 6.12.2016 in ITA No.1520/Ahd/2013. The judgment highlighted the importance of considering the specific language and context of documents to determine the nature of rights over property and emphasized the need for clear evidence to establish ownership claims in legal proceedings.