2012 (2) TMI 212 - AT - Income Tax

Rectification - Capital Gain - Deduction under 54F - Tribunal findings House purchased from borrowed fund and partly from relatives, sales consideration were not utilized - Assessee applied for rectification of order - Held That - Tribunal can rectify only those mistake which are apparent from record. Order passed under 254(1) is final. 254(2) does not have existence de hors the order under section 254(1). Re-calling of the order is not permissible under section 254(2). - Recalling of an order automatically necessitates rehearing and re-adjudication of the entire subject-matter of appeal. - Application of assesee turned down.

Issues Involved:
1. Rectification of the Tribunal's order.
2. Allowability of deduction under Section 54F.
3. Consideration of previous Tribunal decisions.
4. Investment and utilization of sale proceeds.
5. Tribunal's power to review its own orders.

Detailed Analysis:

1. Rectification of the Tribunal's Order:
The assessee sought rectification of the Tribunal's order dated 20-8-2010, arguing that the Tribunal had overlooked the rationale from a previous decision in the case of ITO vs. R. Preeta Devi & two Others. The assessee claimed that this oversight constituted a "mistake apparent from the record."

2. Allowability of Deduction Under Section 54F:
The assessee raised the issue of the allowability of deduction under Section 54F. The Tribunal had previously decided against the assessee, stating that the sale proceeds were not utilized for the purchase of house property. The assessee argued that the investment in the residential house was made before the due date for filing the return and should be eligible for deduction under Section 54F.

3. Consideration of Previous Tribunal Decisions:
The assessee contended that the Tribunal did not consider its own earlier decision in the case of ITO vs. R. Preeta Devi & two Others, which had similar facts. The rationale from this earlier decision was not applied, leading to a claimed "mistake apparent from the record."

4. Investment and Utilization of Sale Proceeds:
The Tribunal found that the assessee did not utilize the sales consideration for the purchase of the house property. Instead, the house was purchased partly from a bank loan and partly from loans from family members and others. The Tribunal held that the sale proceeds were used for different purposes, leaving the assessee with no funds for the purchase of the residential house. As a result, the assessee was not entitled to deduction under Section 54F.

5. Tribunal's Power to Review Its Own Orders:
The Tribunal emphasized that it does not have the power to review its own orders unless expressly conferred by statute. The scope of Section 254(2) is limited to rectifying mistakes apparent from the record and does not extend to rehearing the case on its merits. The Tribunal cited various judgments, including CIT vs. Pearl Woollen Mills and CIT vs. Hindustan Coca Beverages (P) Ltd., to support this position.

Conclusion:
The Tribunal dismissed the Miscellaneous Application filed by the assessee, stating that it was misconceived. The Tribunal held that it had already considered all the facts and circumstances of the case and found no mistake apparent from the record. The order was pronounced in the Court on 06-01-2012.

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