9911796707
TMI Blog1978 (12) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... e of late A. Rathnavel Gounder represented by legal representative Shri R. Palaniswamy. The appellant borrowed Rs. one lakhs from M/s V.D. Mehta Co, and the amount was advanced to M/s Khadder Kodi Beedi Co. The interest paid to M/s Mehta Co., on the amount borrowed was Rs. 9,324 for the asst. year 1972-73 and Rs. 25,500 for the asst. yr. 1973-74. At the time of the original assessment the ITO allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the ITO allowed the deduction by mistake, it is liable to be rectified under s. 154. Aggrieved against the order of the AAC the appellant has come up in appeal before the Tribunal. 4. Before the Tribunal, it is contended for the appellant that (a) No notice as required under s. 154(3) was issued before the ITO passed the rectification order ; and (b) the mistake rectified by the ITO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating that the money was not advanced to M/s Jayalakshmi Co., and it was given to M/s Kadder Kodi Beedi Co., and the interest paid to M/s V.D. Mehta Co., should be allowed as a deduction against the interest received from M/s Khadder Kodi Beedi Co. In reply to this letter, the ITO on 14th Feb., 1977 wrote to the appellant stating that the money borrowed from M/s V.D. Mehta Co., could not have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant to file objections against the proposed rectification. The issue of a notice for rectification is not a mere procedural requirement but forms the foundation for the exercise of the rectification jurisdiction. Since the mandatory requirement of issuing a notice under s. 154(3) was not complied with by the ITO, the rectification order passed by him cannot be legally sustained (vide ITO B. Wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to M/s Mehta Co. should be deducted against the interest receipts from M/s Khadder Kodi Beedi Co. The mistake sought to be rectified is not a glaring, obvious and self-evident mistake. The mistake has to be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. Since the mistake sought to be rectified is a debatable issue, it cannot be termed as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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