Income Tax Officer, Bangalore V. Late Sri.A.S.Narayana Raju, Bangalore

ITA 1693/BANG/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2722 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 14-02-2019
• Assessment Year: 2006-2007
• Appeal Filed On: 23-09-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset; Depreciation; Rectification of order; Retrospective amendment; Revised return
• Section: 143(3); 153A; 54; 10; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES B, BANGALORE BEFORE SHRI N.V.VASUDEVAN, VP & SHRI B.R.BASKARAN, AM ITA NO.1693/BANG/2016 :ASST.YEAR2006-2007 ITA NO.1694/BANG/2016 :ASST.YEAR2007-2008 THE INCOME TAX OFFICER WARD 6(3)(2) BANGALORE. VS. LATE SRI.A.S.NARAYANA RAJU REPRESENTED BY L/R SRI.S.N.RAVI KUMAR NO.401, STANBERRY COURT NO.12, 60 FEET ROAD SANJAYANAGAR BANGALORE 560 094. PAN :ADPPN5795H. (APPELLANT) (RESPONDENT) ITA NO.1695/BANG/2016 :ASST.YEAR2006-2007 ITA NO.1696/BANG/2016 :ASST.YEAR2007-2008 THE INCOME TAX OFFICER WARD 6(3)(2) BANGALORE. VS. LATE SMT.LAKSHMAMMA REPRESENTED BY L/R SRI.S.N.RAVI KUMAR NO.401, STANBERRY COURT NO.12, 60 FEET ROAD SANJAYANAGAR BANGALORE 560 094. PAN : AAZPL5939L. (APPELLANT) (RESPONDENT) REVENUE BY :MISS NEERA MALHOTRA, CIT-DR RESPONDENT BY :SHRI H.GURUSWAMY, ITP DATE OF HEARING :14.02.2019 DATE OF PRONOUNCEMENT : 20.02.2019 O R D E R PER B.R.BASKARAN, AM : THE REVENUE HAS FILED THESE APPEALS CHALLENGING TH E ORDERS PASSED BY THE LEARNED CIT(A)-6, BANGALORE IN THE HANDS ITA NO.1693/BANG/2016 &ORS. LATE SRI.A.S.NARAYANA RAJU &ANR. 2 OF THE ASSESSEES HEREIN FOR ASSESSMENT YEARS 2006-2 007 AND 2007-2008. SINCE ISSUES URGED IN THESE APPEALS ARE IDENTICAL IN NATURE, THEY WERE HEARD TOGETHER AND ARE BEING D ISPOSED OF BY THIS COMMON ORDER. 2. THE FACTS RELATING TO THE ISSUES ARE STATED IN B RIEF. THE ASSESSMENTS IN THE HANDS OF THESE ASSESSEES FOR THE YEARS UNDER CONSIDERATION WERE COMPLETED BY THE ASSESSING OFFICER U/S 143(3) R.W.S. 153A / 153C OF THE ACT ON 30.12.2 009. THE ASSESSEES ALONG WITH THEIR SON SHRI S.N.RAVI KUMAR HAD ENTERED INTO A JOINT DEVELOPMENT AGREEMENT ON 07-08- 2003 WITH A DEVELOPER NAMED M/S.ITTINA PROPERTIES PRIVAT E LIMITED FOR DEVELOPMENT OF PROPERTY OWNED BY THEM. BOTH THE ASSESSES HEREIN DECLARED CAPITAL GAINS ARISING ON ACCOUNT OF JOINT DEVELOPMENT AGREEMENT IN THEIR RETURNS OF INCOME FI LED FOR THE YEARS UNDER CONSIDERATION. THE ASSESSING OFFICER C OMPLETED THE ASSESSMENTS BY ACCEPTING THE CAPITAL GAINS DECL ARED BY BOTH THESE ASSESSES IN BOTH THE YEARS IN THE ORDER PASSED U/S 143(3) OF THE ACT. 3. SUBSEQUENTLY, BOTH THE ASSESSEES MOVED PETITIONS U/S 154 OF THE ACT REQUESTING THE ASSESSING OFFICER TO EXCLUDE THE CAPITAL GAINS OFFERED BY THEM IN THESE TWO YEARS. THE CASE OF THE ASSESSEES WAS THAT THE JOINT DEVELOPMENT AGREEME NT WAS ENTERED ON 07.08.2003 AND HENCE THE CAPITAL GAINS I S ASSESSABLE IN THE ASSESSMENT YEAR 2004-2005 ONLY AN D NOT IN THE YEARS UNDER CONSIDERATION. THE ASSESSEES TOOK S UPPORT OF THE DECISION RENDERED BY HONBLE JURISDICTIONAL KARN ATAKA ITA NO.1693/BANG/2016 &ORS. LATE SRI.A.S.NARAYANA RAJU &ANR. 3 HIGH COURT IN THE CASE OF DR.T.K.DAYALU V. CIT (ITA 3205/2005). 4. THE A.O., HOWEVER, TOOK THE VIEW THAT BOTH THESEASSESSEESARE MAKING A NEW CLAIM, WHICH THEY CO ULD HAVE MADE ONLY THROUGH REVISED RETURN OF INCOME, AS PER THE DECISION RENDERED BY THE HONBLE SUPREME COURT IN T HE CASE OF GOETZ (INDIA) LTD. THE A.O. ALSO TOOK SUPPORT OF TH E DECISION RENDERED IN THE CASE OF T.S.BALARAM, ITO V. VOLKARI BROS (1971) 82 ITR 40], WHEREIN IT WAS HELD THAT A MISTA KE APPARENT ON THE RECORD MUST BE AND OBVIOUS AND PATENT MISTAK E AND NOT SOMETHING WHICH CAN BE ESTABLISHED BY A LONG DR AWN PROCESS OR REASONING ON POINTS ON WHICH THERE MAY B E CONCEIVABLY TWO OPINIONS. ACCORDINGLY, THE A.O. TOO K THE VIEW THAT THE RECTIFICATION PETITION FILED BY THE ASSESS EES U/S 154 OF THE ACT IS NOT MAINTAINABLE AND ACCORDINGLY, HE DIS MISSED THEM IN BOTH THE YEARS IN THE HANDS OF BOTH THE ASS ESSEES. THE LEARNED CIT(A), HOWEVER, ALLOWED THE CLAIM OF THE A SSESSEE AND HENCE, THE REVENUE HAS FILED THESE APPEALS BEFORE U S. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE INVIT ED OUR ATTENTION TO CIRCULAR NO.68 DATED 17.11.1971 AND SU BMITTED THAT THE CBDT CIRCULAR PERMITS RECTIFICATION OF MIS TAKES U/S 154 OF THE ACT ONLY IN THE LIGHT OF LATER DECISION OF THE HONBLE SUPREME COURT. THE LEARNED DR SUBMITTED THAT, IN TH E INSTANT CASE, THE LEARNED CIT(A) HAS PLACED RELIANCE ON THE SUBSEQUENT DECISION RENDERED BY THE HONBLE HIGH COURT OF KARN ATAKA IN THE CASE OF CIT V. T.K.DAYALU (ITA NO.3209/2005). T HE SAID ITA NO.1693/BANG/2016 &ORS. LATE SRI.A.S.NARAYANA RAJU &ANR. 4 ACTION OF THE LEARNED CIT(A) IS NOT IN ACCORDANCE W ITH THE VIEW EXPRESSED IN THE CBDT CIRCULAR REFERRED ABOVE. THE LEARNED DR ALSO PLACED RELIANCE ON THE CASE LAWS GIVEN IN H ER WRITTEN SUBMISSION AND CONTENDED THAT THE RECTIFICATION SOU GHT BY THE ASSESSEES IS NOT PERMISSIBLE U/S 154 OF THE ACT. FO R THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE WRITTEN SUBMIS SION GIVEN BY THE LEARNED CIT-DR:- GOA NOS. 2-3 CIT(A) TRAVELLED BEYOND THE SCOPE OF SECTION 154 ORDER ERRONEOUS. THE ORDER OF CIT(A) IS ERRONEOUS AND THEREFORE LIA BLE TO BE DISMISSED ON THE FOLLOWING GROUND:- 1. IN GOA NO.3 BEFORE CIT(A) THE APPELLANT CLEARLY STATED THAT AS PER C.B.D.T. CIRCULAR NO.68 OF 1971 ANY SUBSEQUENT DECISION OF SUPREME COURT COULD BE APPLIED FOR RECTIFICATION UNDER SECTION 154, YET CI T(A) ERRONEOUSLY APPLIED IT TO HIGH COURT DECISION. THER EBY THE CIT(A) VIOLATED THE CB.D.T. CIRCULAR NO.68 OF 1971. THIS LEGAL POSITION IS UPHELD BY THE APEX COURT IN THE FOLLOWING DECISION: MEPCO INDUSTRIES LTD. V. CIT (2009) 185 TAXMAN 409 (SC) II. FURTHER, THE CORRECT SCOPE OF 154 IS DISCUSSED IN THE FOLLOWING DECISIONS: CIT V. JINDAL STAINLESS LTD. (2012) 20 TAXMANN.COM 531 (DELHI) NEITHER A DEBATABLE POINT OF LAW NOR FAILURE TO APPLY THE CORRECT LAW TO A SET OF FACTS CAN BE CORRECTED BY WAY OF RECTIFICATION ORDER. KESHARWANIZARDABHANDAR V. CIT (2013) 30 TAXMANN.COM 387 (ALL.) APPLICABILITY OF A SECTION NOT RECTIFIABLE. ITA NO.1693/BANG/2016 &ORS. LATE SRI.A.S.NARAYANA RAJU &ANR. 5 CIT V. HISTORIC RESORT HOTELS (2013) 31 TAXMANN.CO M 7 (RAJ.) IN WHICH YEAR ASSESSEE WAS ELIGIBLE TO G ET DEPRECIATION, EVEN IF NOT CLAIMED, IS A DISPUTABLE ISSUE AND NOT RECTIFIABLE. CIT V. THANBI MODERN SPINNING MILLS LTD. (2012) 21 TAXMANN.COM 152 (MADRAS) NO RECTIFICATION FOR DEBATABLE ISSUES R.B.L. BANARSIDASS& CO. (P) LTD. V. CIT (2008) 170 TAXMAN 419 (P&H) JRD STOCK BROKERS (P) LTD. V. CIT (2014) 52 TAXMANN.COM 224 (DELHI). SLP DISMISSED IN (2015) 230 TAXMAN 272 (SC) THE LD D.R SUBMITTED THAT THE JOINT DEVELOPMENT AGREEMENT ENTERED BY THE ASSESSEE HAS TO BE EXAMINE D IN ORDER TO FIND OUT PARITY OF FACTS BETWEEN THESE CAS ES AND THE CASE OF DR. T.K.DAYALU. WHEN SUCH AN EXAMINATI ON IS REQUIRED TO BE DONE, THEN THE CLAIM OF THE ASSES SEE CANNOT FALL UNDER THE CATEGORY OF MISTAKE APPARENT FROM RECORD. SHE SUBMITTED THAT THE HONBLE SUPREME COU RT HAS EXPRESSED SO IN THE CASE OF MEPCO INDUSTRIES LT D (SUPRA). SHE SUBMITTED THAT THE ASSESSEE, IN THE C ASE OF MEPCO INDUSTRIES LTD, OFFERED POWER SUBSIDY AS REVE NUE RECEIPT. SUBSEQUENTLY IT SOUGHT REVISION OF THE ASSESSMENT ORDER BY CLAIMING THE SAME AS CAPITAL SUBSIDY. THE HONBLE SUPREME COURT HELD THAT THE NATURE OF SUBSIDY SHOULD BE EXAMINED IN EACH CASE O N THE BASIS OF FACTS AVAILABLE THEREIN AND THE SAID E XERCISE CANNOT BE CARRIED OUT U/S 154 OF THE ACT. THE LD D .R FURTHER SUBMITTED THAT THE ASSESSEES HEREIN ARE MAK ING ITA NO.1693/BANG/2016 &ORS. LATE SRI.A.S.NARAYANA RAJU &ANR. 6 NEW CLAIMS THROUGH RECTIFICATION PETITION, WHICH TH EY SHOULD HAVE MADE ONLY BY FILING REVISED RETURN OF I NCOME. THE CLAIM MADE BY THESE ASSESSES ARE DEBATABLE IN NATURE, SINCE THEY SEEK EXCLUSION OF INCOME, WHICH WAS OFFERED BY THEM VOLUNTARILY. SHE FURTHER SUBMITTED THAT THE DEBATABLE ISSUES ALSO CANNOT BE RECTIFIED U/S 1 54 OF THE ACT AS HELD IN THE CASES RELIED UPON BY HER IN THE WRITTEN SUBMISSIONS. 6. ON THE CONTRARY, THE LEARNED AR TOOK SUPPORT OF THE DECISION RENDERED BY THE HONBLE SUPREME COURT IN T HE CASE OF ACIT V. SAURASHTRA KUTCH STOCK EXCHANGE LTD. (305 I TR 227) AND ALSO THE DECISION RENDERED BY THE HONBLE KARNA TAKA HIGH COURT IN THE CASE OF MYSORE CEMENTS LTD. V. DC OF C OMMERCIAL TAXES (1994) 93 STC 464 IN ORDER TO CONTEND THAT TH E SUBSEQUENT ORDER PASSED BY THE HONBLE SUPREME COUR T AND HIGH COURT WOULD GIVE RISE TO THE MISTAKE APPARENT FROM RECORD. THE LDA.R SUBMITTED THAT THE PRAYER MADE B Y THE ASSESSEES TO EXCLUDE THE CAPITAL GAINS IN THESE YEA RS ISIN ACCORDANCE WITH THE DECISION RENDERED BY THE JURISD ICTIONAL HIGH COURT IN THE CASE OF DR. T.K.DAYALU (SUPRA). HE SUBMITTED THAT THE CAPITAL GAINS ASSESSED IN THE TW O YEARS UNDER CONSIDERATION IS NOT IN ACCORDANCE WITH THE V IEW EXPRESSED BY HONBLE JURISDICTIONAL HIGH COURT AND H ENCE THE SAME IS A MISTAKE APPARENT FROM RECORD. ACCORDINGL Y, HE CONTENDED THAT THE ASSESSING OFFICER SHOULD HAVE RE CTIFIED THE MISTAKE, AS PRAYED BY THE ASSESSES BY EXCLUDING THE CAPITAL GAINS IN THE TWO YEARS UNDER CONSIDERATION, SINCE T HE CAPITAL ITA NO.1693/BANG/2016 &ORS. LATE SRI.A.S.NARAYANA RAJU &ANR. 7 GAIN IS ASSESSABLE IN AY 2004-05 ONLY AS PER THE DE CISION RENDERED BY THE JURISDICTIONAL HIGH COURT. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. WE NOTICED THAT THE LEARNED CIT(A) HAS GRAN TED RELIEF TO THE ASSESSEES WITH THE FOLLOWING OBSERVATIONS :- 4.1 FURTHER, THE APPELLANT RELIED ON THE FOLLOWING CASE LAWS IN SUPPORT OF HIS CLAIM / APPEALS. DR.T.K.DAYALU V. CIT (ITA 3205/2005) CHATURBUJDWARDA KAPADIA 260 ITR 491 (BOM.) SOURASHTRAKATCH STOCK EXCHANGE CIVIL APPEAL NO.1171 OF 2004 (SC) INDIA TIN INDUSTRIES PVT. LTD. 166 ITR 454 (KAR.) QUILEN MARINE PRODUCE CO. 157 ITR 448 (KER.) KESARIA TEA CO. LTD. 233 ITR 700 (KER.) M/S.MINITEXAEROTOOLS PVT. LTD. ITA 1228/BANG/13 ITAT BANGALORE. SMT.SHIROMI BANERJEE MP NO.56/BANG/11 ITAT BANGALORE LARSEN AND TOUBRO LTD. WP NO.2855 OF 2016 (BOM.) 5. THE GROUNDS OF APPEAL, ASSESSING OFFICERS OBSERVATIONS/ EXPLANATIONS, APPELLANTS WRITTEN SUBMISSIONS MADE HAVE BEEN TAKEN INTO CONSIDERATION WHILE DISPOSING OFF THESE APPEALS. TH E JUDICIAL DECISIONS AS HIGHLIGHTED BY THE AR, HAVE ALSO BEEN DULY PERUSED. 6. IT IS NOTED THAT THE ASSESSMENT ORDER PASSED U/S 143(3) ON 30/12/2009 WAS BASED ON THE JDA ENTERED INTO BY THE APPELLANT WITH M/S.ITTINA PROPERTIES ON 07/08/2003. THE APPELLANT THEREFORE ITA NO.1693/BANG/2016 &ORS. LATE SRI.A.S.NARAYANA RAJU &ANR. 8 FILED A RECTIFICATION APPLICATION U/S 154 WITH THE ASSESSING OFFICER ON 15/02/2013 CONTENDING THAT ANY INCOME WHICH AROSE BY VIRTUE OF THE JDA IS ASSESSABLE IN AY 2004-05. HOWEVER THE ASSESSING OFFICER WAS OF THE VIEW THAT NO OBVIOUS OR PATENT MISTAKE WAS APPARENT FROM RECORD SINCE THE LONG TERM / SHORT TERM CAPITAL GAINS DECLARED BY THE APPELLANT WAS ACCEPTED IN THE ASSESSMENT ORDER. HE THEREFORE REJECTED THE APPELLANTS CONTENTION. 7. DURING APPELLATE PROCEEDINGS, THE AR OF THE APPELLANT FILED AN AFFIDAVIT STATING THAT THE JDA ENTERED INTO WITH M/S.ITTINA PROPERTIES ON 07/08/2003 WAS THE SOLE AND ONLY JDA SIGNED IN RESPECT OF THE SAID PROPERTY. 8. IT IS ALSO NOTED THAT THE INSTANT APPEAL IS SQUARELY COVERED BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT OF KARNATAKA IN THE CASE OF CIT V. DR.T.K.DAYALU IN ITA NO.3209/2005. IN THE CITED CASE SUPRA, THE HONBLE HIGH COURT HELD THAT IF DATE OF CONTRACT INDICATES PASSING OF OR TRANSFERRI NG OF COMPLETE CONTROL OVER PROPERTY IN FAVOUR OF DEVELOPER, THEN DATE OF CONTRACT WOULD BE RELEVANT TO DECIDE THE YEAR OF CHARGEABILITY OF CAPITAL GAINS. THE HONBLE KARNATAKA HIGH COURT PLACED RELIANCE ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CHATURBHUJ DWARKADAS KAPADIA (2003) 260 ITR 491 WHEREIN IT WAS HELD THAT LONG TERM CAPITAL GAINS ARISING OUT OF JDA WAS CHARGEABLE TO TAX IN T HE SAME YEAR AS THAT OF JDA. 9. IN THE INSTANT APPEAL, IT IS ALSO NOTED THAT THE PROPERTY WAS HANDED OVER TO THE DEVELOPER BY APPELLANT FOR CONSTRUCTION OF FLATS AFTER SIGNING O F JDA. THEREFORE CAPITAL GAINS OUGHT TO HAVE BEEN CHARGED IN A.Y. 2004-05 AS PER AMENDED PROVISIONS OF SECTION 2(47) (V) R.W.S. 53A OF THE TRANSFER OF PROPERTIES ACT WREF 01/04/1988. 10. AS MENTIONED IN PRECEDING PARAS, IT IS SEEN THA T ASSESSMENT ORDER PASSED U/S 143(3) ON 30/12/2009 ITA NO.1693/BANG/2016 &ORS. LATE SRI.A.S.NARAYANA RAJU &ANR. 9 WAS BASED ENTIRELY ON THE JDA ENTERED INTO BY THE APPELLANT WITH M/S.ITTINA PROPERTIES ON 07/08/2003. FURTHERMORE IT IS ALSO OBSERVED THAT THE APPEAL IS COVERED BY DECISION OF HONBLE JURISDICTIONAL HIGH COURT OF KARNATAKA IN THE CASE OF CIT V. DR.T.K.DAYALU IN ITA NO.3209/2005. AND SINCE JUDICIAL DISCIPLINE REQUIRES THAT WISDOM OF HIGHER AUTHORITIES PREVAIL, IT IS HELD THAT INCOME WHICH R OSE BY VIRTUE OF JDA DATED 07/08/2003 IS ASSESSABLE IN A.Y.2004-05. THE AO MAY GIVE APPEAL EFFECT IN TERMS OF SECTION 250. 8. THE LD A.R PLACED HIS RELIANCE ON THE DECISIO N RENDERED BY HONBLE SUPREME COURT IN THE CASE OF SAURASHTRA KUTCH STOCK EXCHANGE LTD (SUPRA), WHEREIN IT WAS HELD THA T THE AO CAN RECTIFY MISTAKES ON THE BASIS OF SUBSEQUENT DEC ISION OF JURISDICTIONAL HIGH COURT AND SUPREME COURT. FOR TH E SAKE OF CONVENIENCE, WE EXTRACT BELOW THE RELEVANT OBSERVAT IONS MADE BY HONBLE SUPREME COURT:- 40. THE CORE ISSUE, THEREFORE, IS WHETHER NON- CONSIDERATION OF A DECISION OF JURISDICTIONAL COURT (IN THIS CASE A DECISION OF THE HIGH COURT OF GUJARAT) OR OF THE SUPREME COURT CAN BE SAID TO BE A 'MISTAKE APPARENT FROM THE RECORD'? IN OUR OPINION, BOTH - THE TRIBUNAL AND THE HIGH COURT - WERE RIGHT IN HOLDING THAT SUC H A MISTAKE CAN BE SAID TO BE A 'MISTAKE APPARENT FROM THE RECORD' WHICH COULD BE RECTIFIED UNDER SECTION 254(2) . 41. A SIMILAR QUESTION CAME UP FOR CONSIDERATION BE FORE THE HIGH COURT OF GUJARAT IN SUHRID GEIGY LIMITED V. COMMISSIONER OF SURTAX, GUJARAT , (1999) 237 ITR 834 (GUJ). IT WAS HELD BY THE DIVISION BENCH OF THE HIGH COURT THAT IF THE POINT IS COVERED BY A DECISION OF THE JURISDICTIONAL COURT RENDERED PRIOR OR EVEN SUBSEQUENT TO THE ORDER OF RECTIFICATION, IT COULD BE SAID TO BE 'MISTAKE APPARENT FROM THE RECORD' ITA NO.1693/BANG/2016 &ORS. LATE SRI.A.S.NARAYANA RAJU &ANR. 10 UNDER SECTION 254 (2) OF THE ACT AND COULD BE CORRECTED BY THE TRIBUNAL. 42. IN OUR JUDGMENT, IT IS ALSO WELL- SETTLED THAT A JUDICIAL DECISION ACTS RETROSPECTIVELY. ACCORDING TO BLACKST ONIAN THEORY, IT IS NOT THE FUNCTION OF THE COURT TO PRON OUNCE A `NEW RULE' BUT TO MAINTAIN AND EXPOUND THE `OLD ONE '. IN OTHER WORDS, JUDGES DO NOT MAKE LAW, THEY ONLY DISC OVER OR FIND THE CORRECT LAW. THE LAW HAS ALWAYS BEEN TH E SAME. IF A SUBSEQUENT DECISION ALTERS THE EARLIER O NE, IT (THE LATER DECISION) DOES NOT MAKE NEW LAW. IT ONLY DISCOVERS THE CORRECT PRINCIPLE OF LAW WHICH HAS TO BE APPLIED RETROSPECTIVELY. TO PUT IT DIFFERENTLY, EVE N WHERE AN EARLIER DECISION OF THE COURT OPERATED FOR QUITE SOME TIME, THE DECISION RENDERED LATER ON WOULD HAVE RETROSPECTIVE EFFECT CLARIFYING THE LEGAL POSITION WHICH WAS EARLIER NOT CORRECTLY UNDERSTOOD. 43. SALMOND IN HIS WELL-KNOWN WORK STATES; '(T)HE THEORY OF CASE LAW IS THAT A JUDGE DOES NOT MAKE LAW; HE MERELY DECLARES IT; AND THE OVERRULING OF A PREVIOUS DECISION IS A DECLARATION THAT THE SUPPOSE D RULE NEVER WAS LAW. HENCE ANY INTERMEDIATE TRANSACTIONS MADE ON THE STRENGTH OF THE SUPPOSED RULE ARE GOVER NED BY THE LAW ESTABLISHED IN THE OVERRULING DECISION. THE OVERRULING IS RETROSPECTIVE, EXCEPT AS REGARDS MATT ERS THAT ARE RES JUDICATAE OR ACCOUNTS THAT HAVE BEEN SETTLE D IN THE MEANTIME'. (EMPHASIS SUPPLIED) 44. IT IS NO DOUBT TRUE THAT AFTER A HISTORIC DECIS ION IN GOLAK NATH V. UNION OF INDIA, (1967) 2 SCR 762, THI S COURT HAS ACCEPTED THE DOCTRINE OF `PROSPECTIVE OVERRULIN G'. IT IS BASED ON THE PHILOSOPHY: 'THE PAST CANNOT ALWAYS BE ERASED BY A NEW JUDICIAL DECLARATION'. IT MAY, HOWE VER, BE STATED THAT THIS IS AN EXCEPTION TO THE GENERAL RUL E OF THE DOCTRINE OF PRECEDENT. IN VIEW OF THE LAW LAID DOWN BY HONBLE SUPREME COU RT IN THE ABOVE SAID CASE, IT IS CLEAR THAT THE SUBSEQUENT DE CISION OF JURISDICTIONAL HIGH COURT WOULD GIVE RISE TO MISTAKE FROM ITA NO.1693/BANG/2016 &ORS. LATE SRI.A.S.NARAYANA RAJU &ANR. 11 RECORD, IF THE ORDER OF THE AO IS AGAINST THE LAW I NTERPRETED BY THE JURISDICTIONAL HIGH COURT. SIMILAR VIEW HAS BEEN EXPRESSED BY THE HONBLE JURISDICTIONAL KARNATAKA HIGH COURT I N THE CASE OF MYSORE CEMENTS LTD. (SUPRA). 9. HENCE, ON THE LEGAL POINT, THERE IS MERIT IN THE CONTENTIONS OF THE ASSESSES THAT THE SUBSEQUENT DEC ISION OF THE JURISDICTIONALHIGH COURT WOULD ALSO GIVE RISE T O MISTAKE APPARENT FROM RECORD. 10. THE SCOPE OF RECTIFICATION ORDER TO BE PASSE D U/S 154 OF THE ACT IS LIMITED. THE MISTAKE SOUGHT TO BE RECTI FIED SHOULD BE APPARENT FROM RECORD. THE HONBLE SUPREME COURT IN THE CASE OF T.S.BALARAM VS. VOLKART BROS (82 ITR 40) HA S EXPLAINED THE SCOPE OF MISTAKES APPARENT FROM RECOR D. IT WAS HELD THAT A MISTAKE APPARENT FROM RECORD MUST BE AN OBVIOUS AND PATENT MISTAKE AND NOT SOMETHING WHICH CAN BE ESTABLISHED BY A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY BE CONCEIVABLY TWO OPTIONS. A DECI SION ON DEBATABLE POINT OF LAW IS NOT A MISTAKE APPARENT FR OM RECORD. THE VARIOUS CASE LAWS RELIED UPON BY LD D.R ALSO EX PLAINS THE SCOPE OF PROVISIONS OF SEC.154 OF THE ACT. 11. HOWEVER, ON A PERUSAL OF THE RECTIFICATION ORDERS PASSED BY THE ASSESSING OFFICER AS WELL AS THE ORIGINAL AS SESSMENT ORDER ALSO, WE NOTICE THAT THE ASSESSING OFFICER HA S NOT EXAMINED THE JOINT DEVELOPMENT AGREEMENT AT ALL. B EFORE US, THE ASSESSEE HAS RELIED UPON THE DECISION RENDERED BY HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF DR.T.K.DAYA LU (SUPRA). ITA NO.1693/BANG/2016 &ORS. LATE SRI.A.S.NARAYANA RAJU &ANR. 12 WE NOTICE THAT THE SAID DECISION WAS RENDERED IN RE SPECT OF ASSESSMENT YEAR 1997-98. WE ARE CONCERNED HEREWITH WITH ASSESSMENT YEAR 2004-05, 2006-07 AND 2007-08. THE PROVISIONS OF SEC.53A OF THE TRANSFER OF PROPERTY A CT HAS UNDERGONE A CHANGE IN 2001 AND THE EFFECT OF THE SA ME WAS EXAMINED BY HONBLE SUPREME COURT IN THE CASE OF CI T VS. BALBIR SINGH MAINI (398 ITR 531) IN THE CONTEXT OF JOINT DEVELOPMENT AGREEMENT, WHEREIN THE HONBLE SUPREME COURT HAS PARTIALLY UPHELD THE VIEW EXPRESSED BY HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF C.S.ATWAL (378 IT R 244). HENCE THE LAW PRONOUNCED BY HONBLE SUPREME COURT I N THE CASE OF BALBIR SINGH MAINI (SUPRA) MAY HAVE A BEARI NG ON THE CLAIM PUT FORTH BY THE ASSESSEES HEREIN IN THEIR RE SPECTIVE PETITIONS FILED U/S 154 OF THE ACT. WE NOTICE THAT THE LD CIT(A) HAS NOT CONSIDERED THE JOINT DEVELOPMENT AGREEMENT AND ALSO ABOVE SAID DECISION RENDERED BY HONBLE SUPREME COU RT. 12. WE NOTICE THAT THE ASSESSING OFFICER HAS DIS MISSED THE RECTIFICATION PETITIONS FILED BY THE ASSESSEE WITHO UT SHOWING THAT THE CLAIM OF THE ASSESSEES DOES NOT FALL UNDER THE CATEGORY OF MISTAKE APPARENT FROM RECORD. EVEN THO UGH THE ASSESSING OFFICER HAS TAKEN SUPPORT OF THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF T.S.BALARAM VS. VOLKART BROS (SUPRA), YET HE HAS NOT SPELT OUT AS T O HOW THE SAID DECISION IS APPLICABLE TO THE FACTS OF THE PRE SENT CASE, MEANING THEREBY, THE RECTIFICATION ORDERS PASSED BY THE AO IN BOTH YEARS IN THE HANDS OF BOTH THE ASSESSEES ARE N ON- SPEAKING ORDERS. THE AO, IN OUR VIEW, SHOULD HAVE EXAMINED ITA NO.1693/BANG/2016 &ORS. LATE SRI.A.S.NARAYANA RAJU &ANR. 13 THE CLAIMS OF THE ASSESSEES WITHIN THE SCOPE OF PRO VISIONS OF SEC.154 OF THE ACT BY PASSING A SPEAKING ORDER BY R EFERRING TO THE JOINT DEVELOPMENT AGREEMENT. AS NOTICED EARLIE R, THE LD CIT(A) HAS ALSO NOT EXAMINED THE FACTS AVAILABLE IN THE PRESENT CASE AND ALSO DID NOT EXAMINE THE APPLICABILITY OF THE DECISION RENDERED BY HONBLE SUPREME COURT, REFERRED ABOVE. 13. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THE PETITIONS FILED BY BOTH THE ASSESSEES IN BOTH THE Y EARS REQUIRE FRESH EXAMINATION AT THE END OF THE AO FOR EXAMININ G THE CLAIM OF THE ASSESSEES WITHIN THE SCOPE OF PROVISIO NS OF SEC.154 OF THE ACT. ACCORDINGLY WE SET ASIDE THE O RDERS PASSED BY LD CIT(A) IN THE HANDS OF BOTH THE ASSESSEES IN BOTH THE YEARS AND RESTORE THEM TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO EXAMINE THE PETITIONS OF BOTH THE ASSESSEES AFRESH BY DULY CONSIDERING VARIOUS DECISIONS RENDER ED BY HONBLE JURISDICTIONAL HIGH COURT AS WELL AS HONBL E SUPREME COURTS. AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEI NG HEARD, THE AO MAY TAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LAW. ITA NO.1693/BANG/2016 &ORS. LATE SRI.A.S.NARAYANA RAJU &ANR. 14 14. IN THE RESULT, ALL THE APPEALS OF THE REVEN UE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 20 TH DAY OF FEBRUARY, 2019. SD/- SD/- (N.V.VASUDEVAN) (B.R.BASKARAN) VICE-PRESIDENT ACCOUNTANT MEMBER BANGALORE ; DATED : 20 TH FEBRUARY, 2019. DEVDAS*/MS/ COPY OF THE ORDER FORWARDED TO : TRUE COPY BY ORDER, (ASSTT.REGISTRAR) ITAT, BANGALORE 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT (A) MYSORE. 4. THE PR. CIT MYSORE. 5. THE DR, ITAT, BANGALORE 6. GUARD FILE.