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TMI Blog2016 (6) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... arges & transport subsidy of Rs. 8,70,91,329/- & Rs. 10,22,96,544/- respectively cannot be considered as mistake apparent from record in terms of section 154 and cannot be rectified u/s 154. 2. The appellant craves ;leave to add, alter or amend any of the grounds of appeal during the course of hearing." 3. The Assessee is a company. It is engaged in the manufacture of Lam Coke and Breeze Coke. It is not in dispute that the assessee is entitled to claim deduction u/s 80IC of the Income Tax Act, 1961 (Act). Under section 80IC (1) of the Act where the gross income of the assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (2), there shall, be allowed, in computing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO issued notice u/s 154 of the Act. "Income from transport charges on finished goods of Rs. 8,70,91,329/- would not constitute the profit derived from the business by an undertaking as mentioned in the provisions of sec. 80IC. Hence, was not eligible for deduction u/s 80IC. Transport subsidy of Rs. 10,22,96,544/- as received by the assessee during the relevant asst. year also not eligible for deduction u/s 80IC following the decision in the case of CIT vs. Andaman Timber Industries Ltd. [2000] 242 ITR 204 (Cal) & CIT Vs, Meghalaya Steels Ltd. [2011] 332 ITR 91 (Gau), where it has been decided specifically that transport subsidy is not eligible for deduction u/s 80HH or 80IB." 5. The AO thereafter passed an order u/s 154 dated 30.03. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) found that these aspects were discussed by the AO in para 3.3 of the order of assessment dated 31.12.2007 passed u/s.143(3) of the Act. The CIT(A) also took note of the argument of the Assessee that as per the decision of Hon'ble Supreme court in the case of M/s Mepco Industries Ltd.dtd.19.11.2009 decision on debatable point of view cannot be treated as mistake apparent from the record. Keeping in view all the above facts and circumstances, the CIT(A) held that the order of AO dated 31.03.2012 for withdrawal of deduction under 80IC on transport charges and transport subsidy cannot be considered as mistake apparent from record in terms of section 154 as issue was debatable and cannot be rectified u/s 154 of the IT Act,1961, once he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d goods is shown as income in the profit and loss account as a sum of Rs. 8,70,91,329/- . The first aspect which we notice is that if transportation charges are excluded from the business profits on which the deduction u/s 80IC of the Act is to be allowed then the corresponding expenses will also have to be excluded in which case profits of the business will get reduced to the extent of difference between the transportation charges received by the assessee namely Rs. 8,70,91,329/- and the transport charges incurred by the assessee namely Rs. 8,43,77,509/-. It is not possible for the AO to exclude the entire receipts on account of transport charges only from the profits eligible for deduction u/s 80IC of the Act. We are of the view that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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