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TMI Blog2008 (9) TMI 589X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 to 3 of 2004. - - - Dated:- 19-9-2008 - DHARMADHIKARI S. C., CHAVAN R. C. JJ S.R. Rivonkar for the Appellant. R.G. Ramani for the Respondent. JUDGMENT The judgment of the court was delivered by S. C. Dharmadhikari J.- This is an appeal under section 260A of the Income-tax Act, 1961, by the Commissioner of Income-tax, Panaji, Goa. The appeal under section 260A can be termed as second appeal as envisaged under section 100 of the Civil Procedure Code, 1908. The appeal raises the following substantial question of law : "(A) Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal (ITAT), was justified in allowing the benefit of carry forward losses and depreciation relating to earlier years, even though the running of hotel was handed over by the court to the court receiver ? (B) Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that there was no mistake apparent on the record, where in fact, the Assessing Officer sought to rectify the said mistake based on the order passed by the Commissioner of Income-tax (Appeals) (CIT(A)), Belgaum on October 29, 1993, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that except the figures and years of assessment, all other aspects are common to other appeals. Hence, we have not referred to each of the appeals. Feeling aggrieved by the aforesaid orders of the Assessing Officer under section 154 of the Act, the respondent-assessee preferred 3 appeals for the respective years before the appellate authority, Commissioner of Income-tax (Appeals), Belgaum. 4. The Commissioner of Income-tax (Appeals), Belgaum allowed the appeals filed by the assessee, firstly on the ground that the provisions of section 154 regarding rectification of mistake is not at all attracted. Secondly on the merits also the impugned order was uncalled for and unwarranted. The relevant portion of the order is reproduced : "These three appeals are directed against the order under section 154 passed by the Assessing Officer. It was submitted that the appellant had correctly claimed brought forward losses and depreciation in the returns of income. The appellant's claims were rightly allowed by the Assessing Officer in the orders under section 143(1)(a) of the Act. The assessment years relates to 1991-92 and 1992-93 and under section 143(3) for the assessment year 1990-91 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the assessment year 1985-86 and against the appellant for the assessment year 1987-88 by the Commissioner of Income-tax (Appeals). In view of these facts I am of the considered opinion that there was no mistake apparent from records which warranted rectification. Even on the merits the appellant was entitled to carry forward and set-off of losses and depreciation relating to the earlier years. The hotel business was started by the appellant with effect from May 6, 1981, after running the hotel for some time, the appellant entered into an agreement on June 22, 1983 with UTC Tourist Pvt. Ltd. for the purpose of running of the hotel. During the period from July 1, 1984 to August 24, 1984 the hotel was run under the agreement with UTC Tourist P. Ltd. As UTC Tourist Pvt. Ltd. was not fulfilling the terms of the agreement, a suit was filed by the appellant in the court on July 2, 1984. The running of hotel was handed over by the court to the court receiver who was none but one of the directors of the company. One of the directors of the company accordingly ran the hotel business as a court receiver from August 24, 1984 to February 4, 1988, on which date the court decided the matter a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mistake apparent from the record so as to bring the Revenue's case within the ambit of the provisions of section 154 of the Act. The provisions of section 154 can be invoked only if there is a mistake either of a fact or law from the records. It is not sufficient that there is merely a mistake. A mistake must be apparent from the records and must be an obvious and patent mistake and not something which could be established by a long drawn process of reasoning on the point of which there may be conceivable two opinions. So far as the question of granting benefits of the set-off brought forward unabsorbed business losses and depreciation is concerned, we are of the opinion that the issue was a debatable one not only in law but on facts also, and therefore, the Commissioner of Income-tax (Appeals) was quite justified in cancelling the orders passed under section 154 for withdrawing the benefits already allowed. So far as the order of the Commissioner of Income-tax (Appeals) on the merits is concerned, the learned Departmental representative having not refuted the observations and findings, which are based on facts, we uphold the order of the Commissioner of Income-tax (Appeals) on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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