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TMI Blog1988 (6) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... l throw light on the dispute are that the ITO made an assessment on 21st May, 1980 for the asst. yr. 1979-80 under s. 143(3) of the Act. The appellants had offered long term capital gains for assessment and accordingly the ITO had assessed the same. This long term capital gains had arisen on account of transfer of agricultural land being survey No. 497/2A, Part IV, Bhavani Peth, Pune-2. The said agricultural land was owned by the appellants. The Pune Municipal Corporation acquired this land and paid the compensation. After making the assessment of the long term capital gains in the hands of the appellants, the Bombay High Court delivered a judgment in the case of Manubhai A. Sheth and Ors. vs. N.D. Nirgudkar, ITO and Anr. (1981) 22 CTR (Bom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rectify the assessment order dt. 21st May, 1980 exempting capital gains arisen out of the sale of the agricultural land, following the decision of the Bombay High Court in (1981) 22 CTR (Bom) 41 : (1981) 128 ITR 87 (Bom). The AAC has held in Paras 3, 4 and 5 of his order, the appeals preferred before him are infructuous because the letter of the ITO refusing rectification application does not constitute an order. The AAC has further held that the Bombay High Court judgment in the case of Manubhai A. Seth and Ors. has retrospective operation and it has a further effect as if amended s. 2(14)(iii) does not exist. It is urged that the ITO is bound by the said decision. Not allowing exemption of the capital gains amounts mistake apparent from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was no judgment of the Bombay High Court to exempt capital gains. That does not mean the benefit is not available to the appellants. According to Shri Doshi, benefit of the said judgment is certainly available to the appellants and the appellants must be allowed to avail of the same. In support of this contention, he has relied on the judgment of the Allahabad High Court in the case of Omega Sports and Radio Works vs. CIT (1982) 28 CTR (All) 80 : (1982) 134 ITR 28 (All) wherein it is held that the judgment of the High Court is binding on the subordinate authorities. There cannot be any dispute in this respect. He has further contended that it would be incorrect to say that s. 154 is not attracted to rectify the assessment order. 7. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the pendency of the appeal. 8. Shri Doshi has brought to our notice our own order favouring the appellants in the case of Smt. Prema M. Wadke in ITA No. 262/PN/82 dt. 13th Sept., 1983 for the asst. yr. 1976-77. Identical issue was involved in that appeal. The ITO had rejected the application for rectification under s. 154 under similar circumstances. The assessee in that case had relied on the judgment of the Bombay High Court in Manubhai A. Seth to carry out the rectification. The issue was related to capital gains in respect of agricultural land. In that case also, the AAC had agreed with the ITO that there was no mistake apparent from record to rectify the assessment order. The judgment of the Bombay High Court was delivered on 18th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here being no mistake apparent on record, the ITO was justified in not rectifying the original order. This judgment stands on a different footing than the judgment of the Supreme Court referred to above. 12. The learned representative Shri S.N. Doshi for the appellants distinguished the Bombay High Court judgment which was relied upon by the learned Departmental representative. According to him, in that case, the assessee had never claimed the land being an agricultural land. The issue involved therein was regarding the merger of the ITO's order into the appellate order of the CIT(A). The AAC has not disputed anything about the land being agricultural land and on the contrary, he has arrived to the conclusion that the land in question was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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