1998 (8) TMI 141 - AT - Income Tax

Rectification Of Mistakes Apparent From Record Gross Total Income Adjustment Deduction Unabsorbed Investment Allowance

Summary

Issues:
1. Rectification under section 154 passed by the Assessing Officer regarding intimation under section 143(1)(a) of the Income-tax Act, 1961.

Detailed Analysis:
The appeal was against the order of the CIT(A)-II, Nagpur, concerning rectification under section 154 by the Assessing Officer. The Assessing Officer rectified the intimation sent under section 143(1)(a) after noticing that the assessee claimed deduction under section 80-I on the gross income before considering current depreciation, unabsorbed depreciation, and unabsorbed investment allowance. The CIT(A) confirmed the rectification, leading to the appeal. The assessee argued that at the time, there was a debate on income determination for deductions under sections 80HH and 80-I. The assessee cited various court decisions and contended that the issue was debatable at the relevant time, making rectification improper. However, the Departmental Representative argued that the introduction of section 80AB resolved any controversy and cited Supreme Court decisions supporting the rectification. The Tribunal analyzed the provisions of section 80-I and section 80AB, concluding that after the introduction of section 80AB, there was no controversy on how to compute profits and gains for deduction under section 80-I. The Tribunal upheld the Assessing Officer's rectification under section 154, dismissing the assessee's appeal.

The Tribunal noted that section 80AB clarified the computation of profits and gains for deductions under Chapter VI-A, including section 80-I, by deeming income as per the provisions of the Income-tax Act. The Tribunal highlighted that deductions for depreciation, unabsorbed depreciation, and unabsorbed investment allowance must be considered while computing income for section 80-I. The Tribunal addressed the argument that the matter was debatable before the Supreme Court's decision in a specific case, but emphasized that after the introduction of section 80AB, there was no debate on the computation of profits and gains for an industrial undertaking. The Tribunal explained that under section 143(1)(a), the Assessing Officer could make adjustments for admissible deductions, and since the assessee's claimed deduction under section 80-I was incorrectly computed, rectification under section 154 was justified. The Tribunal upheld the Assessing Officer's order of rectification under section 154, dismissing the assessee's appeal.