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TMI Blog2017 (2) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... ry issue to be decided in this appeal is as to whether the Ld. CIT(A) is justified in deleting the disallowance made u/s. 40(a)(ia) of the Act in the proceedings u/s. 154 of the Act in the facts and circumstances of the case. 3. Brief facts of this issue is that the assessee is a partnership firm filed its return of income for AY 2006-07 and assessment was completed u/s. 143(3) of the Act on 24.12.2008 determining the total income at Rs. 2,57,100/-. The AO subsequent to the framing of assessment on perusal of the TDS record noticed that the assessee had made certain payments towards printing charges in the sum of Rs. 26,52,754/- without deducting tax at source and hence, the provisions of section 40(a)(ia) of the Act get attracted thereon. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat in the said bill VAT was also charged by the concerned supplier which goes to prove that the subject mentioned payments were made only towards purchases and not attributable to any labour charges or job work. Accordingly, it pleaded that no tax deduction at source would need to be made on the said payment. The AO, however, by placing reliance on the CBDT Circular No. 715 dated 08.08.2995 proceeded to hold that the printed material was done as per the prescribed specification of the assessee and to suit the requirement of the assessee and accordingly, concluded that the same would fall under the ambit of provisions of section 194C of the Act and consequently disallowance u/s. 40(a)(ia) of the Act is to be made thereon. 4. The Ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stating that these two items could not be adjudicated in the proceedings u/s. 154 of the Act. Aggrieved, the revenue is in appeal before us on the following grounds: "1. That on the fact and in the circumstances of the case the Ld. CIT(A) erred both in law and facts in holding that the rectification order passed by the A.O. as ultra vires order ignoring the facts that a glaring mistake occurred in the assessment order made u/s. 143(3) of the Income tax Act. 2. That on the facts and circumstances of the case the Ld. CIT(A) erred in holding that the issues regarding applicability of section 40(a)(ia) of the Income Tax Act is debatable while materials on record clearly show that payments were made for sub-contractors to get work done and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowance u/s. 40(a)(ia) of the Act made thereon is justified. With regard to closing stock addition in the sum of Rs. 7,39,511/- he argued that the assessee has shown closing stock in its Balance Sheet as Rs. Nil whereas he has reflected a sum of Rs. 7,39,511/- as closing stock submitted to the bank. Hence, it was a mistake apparent from record which requires to be rectified in the instant case. In response to this, the Ld. AR argued that whether what was done by the assessee in respect of printing charges was either towards material purchase thereon or job work thereon itself is a debatable issue which could be decided only based on detail investigation of facts and hence, it would not fall within the purview of section 154 proceedings. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debatable cannot be carried out u/s. 154 of the Act. In this regard, we place reliance on the decision of the Hon'ble Supreme Court in the case of T. S. Balaram, ITO Vs. Volkart Bros. (1971) 82 ITR 50 (SC) wherein it has been held as under: "It is not open to the ITO to go into the true scope of relevant provisions of the Act in proceeding u/s 154 of the Act. A mistake apparent on the record must be an bvious and patent mistake and not something which can be established by a long drawn process of reasoning of points on which there may, conceivably be two opinions." A decision on a debatable point of law is not a mistake apparent from record. The power of rectification u/s 154 of the Act cannot be understood to review, revise or re-consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing High Courts in the following cases and hence, the same would make the issue debatable: i) CIT Vs. Pioneer Breeding Farms 295 ITR 78 (Mad), ii) CIT Vs. Udaipur Chemicals & Fertilizers (P) Ltd. 211 CTR 191, iii) Coimbatore Spinning & Weaving Co. Ltd. Vs. CIT 95 ITR 375 (Mad), iv) Dhansiram Agarwalla Vs. CIT 111 CTR 39 (Gau), v) Century Foams (P) Ltd. Vs. CIT 123 CTR 342 (All) and vi) V. Rajan Vs. CIT 96 ITR 64 (Mad). Since the subject mentioned issue also is debatable the same cannot be adjudicated in section 154 proceedings. Hence, the grounds raised by the revenue are dismissed and the order of the Ld. CIT(A) does not require any interference and the same is hereby upheld. Hence the grounds raised by the revenue are dismissed. 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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