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TMI Blog2022 (4) TMI 499X X X X Extracts X X X X X X X X Extracts X X X X ..... essee has produced copies of Gota Gram Panachayat tax bills for the period 1988-89 to 2004-05 with the assessee s name was appearing which showed that the assessee had effective right over the property since 1987. The above seems to suggest that assessee had secured the right to purchase the property after completing necessary formalities. Fourth, the same property in respect of which Banakhat was entered in 1987 was transferred in the name of the assessee by the same party/ seller. It would be difficult to conclude that it is a straightforward case wherein the Ld. assessing officer has made a mistake apparent from the record . Assessee has brought various evidences in support of his contention that the assessee had secured effective right to have the asset transferred in his name since 1987. Both parties, the seller and the buyer of land (assessee) took necessary steps to effectuate the sale. The sale of said plot was registered in assessee s name on 08-12-2009. The issue involved requires an analysis of facts before coming to the conclusion whether the sale of land by the assessee qualifies as a short term or long term capital gains. This, in our view, is not an issue whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e transfer deed was executed so that the said land was a short term capital asset. 3.1 The Ld. CIT(A) has grievously erred in law and or on facts in upholding withdrawal of the exemption claimed u/s.54F of ₹ 49,71,478/- and instead assessing it as STCG of ₹ 56,11,000/-. 3.2 That in the facts and circumstances of the case as well as in law, the Ld. CIT(A) ought not to have upheld withdrawal of the exemption claimed u/s.54F of ₹ 49,71.478/- and instead assessing it as STCG of ₹ 56,11,000/-. It is therefore prayed that the order passed u/s. 154 and the addition of ₹ 56,11,000/- as STCG may be deleted. 3. The brief facts of the case are that the assessee filed its return of income for A.Y. 2011-12 declaring total income of ₹ 2,44,449/-. During the course of assessment proceeding, the ld. A.O. noticed that the assessee has not shown interest income of ₹ 28,110/- earned from Essan Marketing in the return of income and therefore added the same to the income of the assessee. However, subsequently the ld. A.O. initiated 154 proceeding on the grounds that the assessee had claimed deduction of ₹ 49,71,478/- u/s. 54F of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in agreement made in 1987. (c) There cannot be transferred in favour of the non-agriculturalist which required permission and it was taken by land owners vide order dated 19-11-2008 wherein no name of the appellant was mentioned. (d) Since agreement of 1987 and the power of attorney were not considered, there was mistake apparent from record. While passing the order, the ld. CIT(A) observed as below:- 5.5 On careful consideration of relevant documents and agreements available on record it is observed that Appellant has claimed that he was holding the land sold during the year from 1987 whereas AO was contending that said land was purchased by Appellant only on 8th December, 2009. While passing the original Assessment Order AO has accepted the claim made by Appellant in return of income and allowed deduction under Section 54 of the Act. It is a matter of fact that Appellant has claimed cost of acquisition of asset sold during the year at ₹ 4 lacs and entire payment of such sum was made through account payee cheque on 7th December, 2009 i.e. one day prior to the date on which sale deed is executed. The Appellant has relied upon irrevocable power of attorney execut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovember, 2008 was in the name of sellers and not in the name of Appellant. The reason of passing of such order in the name of sellers is also not explained by Appellant. It is a matter of fact that even though land was converted into NA in 2008, registered sale deed was executed in December 2009 i.e. almost after one year and if Appellant is de-facto owner of the property on conversion of land, such sale deed would have been executed immediately. So far as claim of Appellant that there cannot be substantial increase in the value from ₹ 4 lacs to ₹ 60.11 lacs in one year, it is observed that though Appellant has executed purchase deed for Rs,4 lacs on 8th December, 2009 wherein stamp duty is mentioned at ₹ 2,49,750/- and Jantri value of above property works out at ₹ 50,96,938/- which makes the appellant liable for provisions of Section 56(2)(vii)(b) of the Act and therefore increase in value by approximately ₹ 10 lacs is reasonable within one year hence the contention of Appellant that there is phenomenal increase in value of land if it is held that land is purchased in 2009 cannot be accepted. From the facts discussed herein above it is apparent that A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tside the purview of rectification u/s. 154 of the Act, which can be invoked only to rectify mistakes apparent from the record and in the 154 order, the ld. A.O. has done a detailed analysis to come to the conclusion that the assessee has earned a short term capital gain and hence is not entitled to the benefits of section 154 of the Act. In response, the Ld. DR placed reliance on the observations of Ld. Pr. CIT in the order passed u/s 263 of the Act. 6. Before dealing with the merits of the case, in our view, it is first imperative to we would first dwell upon the issue, whether in the instant set of facts, an order can be passed u/s 154 of the Act to correct a mistake apparent from record . In the case of T.S. Balaram, ITO v. Vokart Bros. [1971] 82 ITR 50 , the Supreme Court, while considering the scope of section 154, categorically laid down that mistake apparent on the record must be obvious and patent mistake and not something which can be established by long-drawn process of reasoning on points on which there may be conceivably two opinions. Supreme Court further held that a decision on a debatable point of law is not a mistake apparent from the record. In the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed into a Banakhat with the seller in 1987 in respect of a piece of land, which was duly registered. Secondly, the said piece of land was converted from agricultural to non-agricultural with the object to effectuate the Banakhat referred to above. Thirdly, the assessee has produced copies of Gota Gram Panachayat tax bills for the period 1988-89 to 2004-05 with the assessee s name was appearing which showed that the assessee had effective right over the property since 1987. The above seems to suggest that assessee had secured the right to purchase the property after completing necessary formalities. Fourth, the same property in respect of which Banakhat was entered in 1987 was transferred in the name of the assessee by the same party/ seller. Hence, in light of the above facts, it would be difficult to conclude that it is a straightforward case wherein the Ld. assessing officer has made a mistake apparent from the record . The Ld. Counsel for the assessee has brought various evidences in support of his contention that the assessee had secured effective right to have the asset transferred in his name since 1987. Both parties, the seller and the buyer of land (assessee) took necessar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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