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Issues involved: Appeal against order of CIT(A) cancelling rectification order passed by AO u/s. 154 of the Income-tax Act, 1961 regarding deduction u/s. 80HHC for Assessment Year 2002-03.
Summary: The Appellate Tribunal ITAT Kolkata heard the appeal by revenue against the order of CIT(A) cancelling the rectification order passed by the AO u/s. 154 of the Act. The original assessment was completed u/s. 143(3) by ACIT, Kolkata, where deduction u/s. 80HHC was in question. CIT(A) directed the AO to recompute the deduction u/s. 80HHC, leading to a dispute. The AO rectified the order, but CIT(A) allowed the claim of the assessee, stating that the rectification was against the law. The Tribunal upheld CIT(A)'s decision, emphasizing that the computation of turnover was a debatable issue and the AO's rectification was not valid u/s. 154. The appeal of revenue was dismissed, confirming the quashing of rectification proceedings. The AO's rectification order was challenged by the revenue before the Appellate Tribunal. The Tribunal noted that the original assessment involved a dispute over deduction u/s. 80HHC, leading to directions from CIT(A) for recomputation. The AO rectified the order, but CIT(A) allowed the assessee's claim, stating that the rectification was not valid as the computation of turnover was a debatable issue. The Tribunal upheld CIT(A)'s decision, dismissing the revenue's appeal and confirming the quashing of rectification proceedings. The Tribunal considered the appeal by revenue against the order of CIT(A) cancelling the rectification order passed by the AO u/s. 154 regarding deduction u/s. 80HHC. The original assessment by ACIT, Kolkata involved a dispute over the deduction, leading to directions from CIT(A) for reevaluation. The AO's rectification was challenged, but CIT(A) found it to be against the law due to the debatable nature of the turnover computation. The Tribunal agreed with CIT(A)'s decision, dismissing the revenue's appeal and upholding the cancellation of rectification proceedings. The Tribunal addressed the appeal by revenue concerning the cancellation of the AO's rectification order by CIT(A) u/s. 154 regarding deduction u/s. 80HHC. The original assessment by ACIT, Kolkata raised issues regarding the deduction, resulting in directions from CIT(A) for reassessment. The Tribunal upheld CIT(A)'s decision to cancel the rectification, citing the debatable nature of turnover computation. Consequently, the revenue's appeal was dismissed, affirming the quashing of rectification proceedings.
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