Dr. Hridaya Mohan Lal, Hyderabad, ... vs Assessee

Dr. Hridaya Mohan Lal, ...Applicant Hyderabad. Vs. Income Tax Officer, Ward - 6(2), ..Respondent (PAN - AABCI 1140 F)

Appellant by : Shri A.V. Raghuram Respondent by : Shri Rajat Mitra

Date of Hearing : 10/04/2015 Date of Pronouncement : 29/04/2015

ORDER PER SAKTIJIT DEY, J.M.:

This Miscellaneous Application is filed by assessee purportedly u/s 254(2) of the Act, seeking clarification of the order passed by the Tribunal in ITA No. 351/Hyd/2011 on 07/01/2014.

2. As stated in the M.A. and also submitted by ld. AR, in the appeal filed before the Tribunal, assessee had raised two additional grounds one of which is in respect of claim of deduction u/s 54F of the Act. However, it is the contention of assessee that instead of mentioning section 54, 2 M.A. No. 32/Hyd/2015 Dr. Hridaya Mohan Lal

inadvertently, the section under which deduction is sought to be claimed was mentioned as 54F as a result of which in the assessment order passed in pursuance to the direction of the Tribunal, AO while rejecting deduction u/s 54F was also denied the benefit u/s 54 to assessee. Ld. AR submitted, the facts and materials on record, such as agreement of sale- cum-GPA executed on 17/12/2004, clearly indicate, the property transferred was a residential house, hence, the appropriate section under which assessee is eligible for deduction is section 54. Ld. AR submitted, in fact, assessee in the return of income filed for AY 2006-07 had also claimed deduction u/s 54F of the Act, which has also been stated by AO in paragraph 4 of the assessment order. Thus, it was submitted by ld. AR, in the interest of justice, clarification may be issued to the effect that direction contained in paragraph 14 of the appellate order may be considered as direction relating to claim u/s 54 of the Act.

3. Ld. DR, on the other hand, submitted before us, there is no mistake in the order of the Tribunal as assessee himself in the additional grounds has raised the issue of claim of deduction u/s 54F of the Act. Ld. DR submitted, considering such ground raised by assessee, the Tribunal directed the AO to consider assessee's claim of deduction u/s 54F. Since, in compliance to the direction of the Tribunal, AO has held that assessee is not eligible to deduction u/s 54F as the property sold is a residential house, the decision taken by AO cannot be faulted.

4. In the rejoinder, ld. AR submitted, rectification of mistake envisaged u/s 254(2) of the Act relates to mistake 3 M.A. No. 32/Hyd/2015 Dr. Hridaya Mohan Lal

apparent on record and not mistake in the order of the Tribunal. It was submitted, since the materials on record clearly reveal the fact that the property sold is a residential house and assessee is eligible to claim deduction u/s 54, which was inadvertently claimed u/s 54F, the mistake being apparent on the face of record is coming with the purview of section 254(2) of the Act.

5. We have considered the submissions of the parties and perused the materials on record. As can be seen, from the averments made in the M.A. as well as the submissions made by assessee's counsel, there is no error in the order of the Tribunal, but the error is by assessee in raising of additional ground claiming deduction u/s 54F in stead of u/s 54. Therefore, there being no mistake in the order of the Tribunal, M.A. would not be maintainable. However, it is a fact that in paragraph 4 of the assessment order, AO himself has stated the fact that assessee in the return of income filed for AY 2006-07 has claimed deduction u/s 54 of the Act against capital gain arising from sale of the property in question. Moreover, in paragraph 14 of the impugned order of the Tribunal, it has been observed by the Bench that while computing capital gain in the assessment year under consideration, AO is required to allow all deductions and benefits permissible under the provisions of the Act, which assessee is eligible to get. Since, the issue in the additional ground was raised for the first time before it, the tribunal instead of going into the merits of the issue raised thought it appropriate to direct the AO to examine assessee's claim. Therefore, if assessee is otherwise eligible for deduction u/s 4 M.A. No. 32/Hyd/2015 Dr. Hridaya Mohan Lal

54, and it fulfills all the conditions of the said provison, then there is no bar on AO in considering assessee's claim of deduction u/s 54 of the Act. With the aforesaid observations, M.A. is dismissed.

6. In the result, M.A. filed by assessee is dismissed.

Pronounced in the open court on 29 th April, 2015.

Sd/- Sd/- (P.M. JAGTAP) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER

Hyderabad, Dated:29 th April, 2015 Kv

Copy to:-

1) Dr. Hridaya Mohan Lal, C/o Shri AV Raghuram,

Advocate, 610, 6 th Floor, Babukhan estate, Basheerbagh, Hyderabad

2) ITO, Ward - 6(2), Hyderabad

3) CIT(A)-IV Hyderabad

4) CIT-III, Hyderabad

4) The Departmental Representative, I.T.A.T., Hyd.