2021 (9) TMI 62 - AT - Income Tax

Rectification of mistake - Treatment to mesne profits - assessee s claim was that the same is capital profit and hence not taxable as duly supported by Special Bench decision of ITAT in the case of Narang Overseas Pvt. Ltd 2008 (2) TMI 817 - ITAT MUMBAI - CIT(A) has not followed the order of larger special bench of the ITAT in the case of Narang Overseas Pvt. Ltd. - HELD THAT - Why the decision of larger special bench in Narang Overseas Pvt. Ltd. (supra) which has not been reversed by the Hon'ble Jurisdictional High Court is not to be considered has not been dealt with in the aforesaid order. Hence, there is a mistake apparent from record in the order of ITAT. We recall the aforesaid order of the ITAT. The registry is directed to fix the case in the normal course.

Summary

Issues: Rectification of mistake in the order of ITAT regarding the taxability of mesne profits claimed as capital profit by the assessee.

Analysis:
The appellant sought rectification of a mistake in the ITAT order regarding the taxability of mesne profits claimed as capital profit. The appellant argued that the issue in appeal was mesne profits, contending it was capital profit and hence not taxable, supported by a Special Bench decision of ITAT and a Bombay High Court decision. The appellant claimed that the ITAT did not adequately address the details submitted and failed to consider the previous decisions. On the other hand, the Departmental Representative argued against the review, stating it was impermissible. The ITAT acknowledged the appellant's contentions, noting that the CIT(A) had not followed the larger special bench decision and the Bombay High Court decision favoring the assessee. The ITAT found a mistake apparent from the record in its order and decided to recall the order for further consideration, directing the case to be fixed in the normal course. Consequently, the miscellaneous applications filed by the assessee were allowed, and the order was pronounced in open court on 01.06.2021.