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2014 (1) TMI 655 - ITAT PUNERecall of order – Rectification of mistake apparent from record u/s 254 of the Act - Rebate treated as cessation of liability - Disallowance u/s 72(1) of the Act - Loss on account of excess cost of electricity incurred – Held that:- In sec. 41(1), the Legislature has used the words "loss" also - If the assessee claims expenditure but ultimately if there is a "loss" and such "loss" cannot be set off u/s 72 of the Act – Thus, section 41(1) of the Act cannot be invoked - the assessee could get the benefit of the brought forward business losses from the A.Y. 1993-94 as well as depreciation allowance and the tax liability of the assessee is reduced - Relying upon Tirunelveli Motor Bus Service Co. (P) Ltd. Vs. CIT [1970 (8) TMI 2 - SUPREME Court] - even if the rebate relates to the tariff which is debited to the P & L a/c in the respective assessment years but the fact remains that the losses which were worked out after debiting the said tariff had lapsed - Both the parties have not brought any direct decision on this crucial issue but to our conscious, considering the intention of the Parliament to enact sec. 41(1) creating fiction is not to put any extra burden of tax on the assessee but to take away the benefit which is enjoyed by the assessee by reducing the tax liability under the charging provisions of the Act – the AO directed to verify the record and reduce amount from addition made u/s 41(1) in the year – Decided partly in favour of Assessee.
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