2014 (12) TMI 1016 - AT - Income Tax

Recall of order Rectification of mistake apparent from record u/s 254 Ex-parte order passed by Tribunal - Held that - Assessee contended that the Tribunal did not consider the written submissions available on record and certain errors are crept in the order - assessee s own funds have gone into the construction of the building and the assessee is entitled for deduction u/s 54F - a residential house was constructed at his cost on the land held by his wife - a small building already existed and the assessee built a full-fledged residential building - the matter could not be presented satisfactorily before the Tribunal as the assessee s representative was not in India and could not appear before the Tribunal on the date of hearing - The Tribunal decided the issue without considering the facts with reference to the application of the decision in the case of Smt. Gousia Begum And Others Versus Dy. Commissioner of Income-tax And Others 2013 (9) TMI 559 - ITAT HYDERABAD and entitlement of petitioner to relief u/s. 54F as his funds have gone into construction of the building also, the Tribunal did not consider the written submissions - there are certain errors in the Tribunal order dated 7th March, 2013 the reasons provided by the assessee are satisfactory in nature, thus, the order of the Tribunal is recalled and the matter is remitted back to the Tribunal Decided in favour of assessee.

Issues Involved:

1. Recall of Tribunal order in ITA No. 295/Hyd/2012 dated 7.3.2013.
2. Errors in the Tribunal's consideration of facts and application of law.
3. Ex parte decision and adjournment request.
4. Classification of land as a capital asset under section 2(14) of the IT Act.
5. Eligibility for deduction under section 54F of the IT Act.

Issue-wise Detailed Analysis:

1. Recall of Tribunal Order:
The petitioner sought the recall of the Tribunal's order in ITA No. 295/Hyd/2012 dated 7.3.2013 for the assessment year 2008-09, arguing that the Tribunal had committed certain mistakes and failed to consider specific facts. The petitioner requested the recall of the order in the interest of justice and fair play.

2. Errors in Tribunal's Consideration:
The petitioner pointed out that the Tribunal did not consider the written submissions that were filed, leading to errors in the order. Specifically, the Tribunal's decision at para 21, which followed the decision in the case of Smt. Gousia Begum and others, was argued to be inapplicable to the petitioner's case as the land in question was beyond 8 km from Hyderabad Municipality and Patancheru Municipality.

3. Ex Parte Decision and Adjournment Request:
The petitioner, an advocate by profession, appeared before the Tribunal seeking an adjournment as his Chartered Accountant was out of the country. The Tribunal denied the adjournment and required the petitioner to argue the case himself, which he was unable to do due to his lack of knowledge in Income-Tax proceedings. Despite filing written submissions as suggested by the Tribunal, the petitioner argued that these were not considered in the final decision.

4. Classification of Land as a Capital Asset:
The Tribunal classified the land sold by the petitioner as a capital asset under section 2(14) of the IT Act, thereby attracting capital gains tax. The petitioner contested this classification, arguing that the land was beyond the notified area and should not be considered a capital asset.

5. Eligibility for Deduction under Section 54F:
The Tribunal denied the petitioner's claim for deduction under section 54F, stating that the construction was in the name of the petitioner's wife and funded by her overdraft account. The petitioner argued that he had provided the funds for the construction and should be eligible for the deduction. He cited a previous Tribunal decision in ITA No. 9897/Hyd/11, which supported the claim for exemption under similar circumstances.

Conclusion:
The Tribunal acknowledged certain errors in its order dated 7th March 2013 and found merit in the petitioner's arguments. Consequently, the order was recalled, and the appeal was restored on the Tribunal's file for a fresh hearing. The Registry was directed to schedule the hearing in due course with intimation to both parties. The petitioner's Miscellaneous Application was allowed, and the order was pronounced in open court on 10th December 2014.

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