TMI Blog2018 (9) TMI 2010X X X X Extracts X X X X X X X X Extracts X X X X ..... om any previous owner. All the more, it is an important right which enables the applicant as well as the other JV partner to carry on the business. Therefore, the cost of acquisition of such a right shall be nil as per the provisions of section 55(2)(a) of the Act. Thus, we arrived at a finding that the same is chargeable as short term capital gains because the applicant had exercised its option to sale its rights on 08.05.2006 i.e. within 12 months of the JVA dated 27.05.2005. The applicant has not pointed out any mistake aparent from the record. A mistake apparent on the record must be an obvious mistake and not something which can be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. A decision on a debatable point of law is not a mistake apparent from the record. In fact, not a single error in the impugned order has been pointed out by the applicant. What the applicant wants is a review of the order passed by the Tribunal. The Tribunal is a creature of the statute. The Tribunal cannot review its own decision unless it is permitted to do so by the statute. The Hon'ble Supreme Court has held in Patel Narsh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b. Since, the applicant apprehended the breach of article 8.6 of the JV Agreement it addressed letter dated January 31, 2006 in the Managing Director of LAND for confirmation if there was any violation of the JV Agreement. c. Since, the LAND group was being taken over by AMTEK Inc. of USA, the applicant by its letter dated May 08, 2006 invoked article 8.6 of the JV Agreement and called upon LAND to purchase 3,25,000 equity shares held by it in the JV Company viz., Land Del Infrared Pvt. Ltd. d. Since LAND did not want to honour its commitment as per article 8.6 and 8.7 of the JV Agreement, it persuaded the applicant to enter into a waiver agreement, waiving and giving up all its right and entitlement under those articles. Pursuant thereto, a Waiver Agreement dated June 15, 2006 was executed between the applicant and LAND whereby it received pounds sterling 250,000 equivalent to Indian rupees 2,10,75,000. 2.1 The applicant submits that the aforesaid amount of ₹ 2,10,75,000 was received by it as a compensation for breach of the JV Agreement which would be a capital receipt not chargeable to income-tax under the Income-tax Act (the Act).It was also urged that, assumi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt held in Land Del Infrared Pvt. Ltd. and which the applicant had offered for sale as per clauses 8.6 and 8.7 of the JV agreement. c. Lastly, the Tribunal while dealing with the applicant's submission on failure of computation machinery in view of indeterminate cost of acquisition has referred to the capital asset as 'right of first refusal'. According to the Tribunal, this was an important right which enabled inter-alia the applicant to carry on a business. The applicant submits that there is an inherent contradiction in the Tribunal's finding on capital assets which has given rise to capital gains. As a matter of fact, the JV agreement did not confer any right to the applicant to carry on any business and the applicant continued to carry on business after signing the said Waiver Agreement. Therefore, provisions of section 55(2) of the Act have no application 10 the present case. In view thereof, it is submitted by the applicant that the basis on which the Tribunal has upheld the assessment of capital gains in the present case is contrary to the facts on record based on inherent contradiction between various crucial findings in the order and effectively tant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This is notwithstanding the fact that the JV agreement did not confer on it any right of first refusal. 2.6 The applicant further submits the judgment of the Hon'ble Apex Court in Oberoi Hotels (P.) Ltd. v. CIT 103 Taxman 203 which also supported its case on capital receipt has been distinguished on the ground that, in the present case, the amount of ₹ 2,10,75,000 was not received by the applicant for giving up its rights. This is contrary to the facts on record that by Waiver Agreement dated June 15, 2006 the-applicant gave up the rights conferred on it by clauses 8.6 and 8.7 of the JV Agreement and the amount of ₹ 2,10,75,000 was received in consideration thereof. 2.7 Finally, the applicant submits that, above referred mistakes go to the root of the matter as the fundamental facts involved in the appeal have been overlooked. Further, the Tribunal has adjudicated issues which did not arise for consideration in the present case as the facts on the basis of which the appeal has been disposed of are irrelevant. Consequently, the issues as really arising for consideration in the present case have remained adjudicated. Non-adjudication of issues arising in the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind held by an assessee, whether or not connected with his business or profession. Further, we have mentioned at para 7.7 of the impugned order, how transfer has taken place in the above case. In this context reference has been made to the waiver agreement dated 15.06.2006 between the applicant and LAND. At the time of entering the JVA, the applicant had put 50% financial stake in JVCo and was also actively involved and the business activity of the said JVCo. The right was bestowed, in lieu of, or on the consideration of such financial and managerial and HRD investment by the applicant in JVCo. We have discussed the same at para 7.5.3 of the impugned order. The applicant had acquired this right of first refusal, the date it entered into the JVA. Therefore, the applicant had not acquired this right from any previous owner. All the more, it is an important right which enables the applicant as well as the other JV partner to carry on the business. Therefore, the cost of acquisition of such a right shall be nil as per the provisions of section 55(2)(a) of the Act. Thus, we arrived at a finding that the same is chargeable as short term capital gains because the applicant had exercise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 (Raj) (HC), Jainarain Jeevraj v. CIT [1980] 121 ITR 358 (Raj.) (HC), Prajatantra Prachar Samiti v. CIT [2003] 264 ITR 160 (Orissa) (HC), CIT v. Jagabandhu Roul [1984] 145 ITR 153 (Orissa) (HC), CIT Anr. v. ITAT Anr. [1992] 196 ITR 640 (Orissa) (HC), Shaw Wallace Co. Ltd. v. ITAT Others [1999] 240 ITR 579 (Cal) (HC), CIT v. Suman Tea Plywood Industries Pvt. Ltd. [1997] 226 ITR 34 (Cal) (HC), ITO v. ITAT Anr. [1998] 229 ITR 651 (Pat.) (HC), CIT Anr. v. ITAT Anr. [1994] 206 ITR 126 (AP) (HC), ACIT v. C.N. Ananthram [2004] 266 ITR 470 (Kar) (HC). 4.3 In the case of Ramesh Electric Trading Co. (supra), their Lordships of the Hon'ble Bombay High Court have held: Under s. 254(2) of the IT Act, 1961, the Tribunal may, 'with a view to rectifying any mistake apparent from the record', amend any order passed by it under sub-s (1) within the time prescribed therein. It is an accepted position that the Tribunal does not have any power to review its own orders under the provisions of the IT Act, 1961. The only power which the Tribunal possesses is to rectify any mistake in its own order which is apparent from the record. This is merely a power of amending ..... X X X X Extracts X X X X X X X X Extracts X X X X
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