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Issues:
1. Whether the ITO could rectify an alleged mistake under section 154 regarding an expenditure on a foreign tour of directors. 2. Whether the expenditure incurred on purchasing tickets for a foreign tour was rightly claimed as an allowable expenditure for the relevant accounting period. Analysis: Issue 1: The case involved an appeal by the assessee against the ITO's rectification under section 154 regarding an expenditure of Rs. 1,60,604 on a foreign tour of directors, which the ITO claimed did not pertain to the relevant accounting period. The assessee argued that the ITO's action was a change of opinion and not a rectifiable mistake under section 154. The Tribunal considered the arguments and referred to legal precedents to determine the nature of a mistake apparent on the record. It was concluded that the ITO's action under section 154 was based on a mere change of opinion and did not confer jurisdiction to rectify the alleged mistake. The Tribunal allowed the appeal, quashing the ITO's order under section 154. Issue 2: The Tribunal analyzed whether the expenditure incurred on purchasing tickets for a foreign tour was rightly claimed as an allowable expenditure for the relevant accounting period. The assessee contended that the liability for the payment of the tickets was incurred when purchased, even if the payment was made later. The Tribunal noted that the ITO had considered the explanation provided by the assessee during the assessment proceedings and did not find the expenditure disallowable. It was observed that the ITO had applied his mind to the facts of the case and allowed the expenditure, thereby precluding him from revising his opinion under section 154. The Tribunal further held that there was no mistake apparent from the record that could be rectified under section 154, as the expenditure had been properly claimed and allowed by the ITO in the assessment order. Consequently, the Tribunal allowed the appeal, quashing the ITO's order under section 154. In conclusion, the Tribunal ruled in favor of the assessee on both issues, determining that the ITO's rectification under section 154 was based on a change of opinion and that the expenditure on the foreign tour was rightly allowed and not subject to rectification.
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