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TMI Blog2005 (7) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of the following items: (Rs.) (1) Commission of sale to overseas distributors 8,25,922 (2) Stationery and printing 80,372 (50% of Rs. 1,60,743) (3) E.C.G.C promotion exp. 18,054 (4) Expenses for participation in international trade fare 1,74,053 (5) Salary (50% of Rs. 10,99,358) 5,46,679 (6) Rent (50% of Rs. 2,33,537) 1,16,769 ----------- & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional trade fare 1,74,053 Salary (50% of Rs. 10,93,358) 5,46,679 Rent (50% of Rs. 2,33,537) 1,16,769 He, accordingly, passed an order on March 20, 1984. The assessee carried the matter in appeal before the Commissioner of Income-tax (Appeals) who for the reasons stated in his order dated August 10, 1984, dismissed the appeal. The assessee filed second appeal before the Tribunal and the Tribunal allowed the appeal vide order dated June 13, 1985. The principal ground, on which the appeal has been allowed by the Tribunal, is that the point at issue was highly debatable and, therefore, no action could be taken under section 154 of the Act as held by the apex court in the case of T.S. Balaram, ITO v. Volkart Brothers [1971] 82 ITR 50. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... motion of sales outside India and on maintenance of agency outside India. The Tribunal has recorded that while framing the assessment order under section 143(3) read with section 144B of the Act, the Assessing Officer had nowhere mentioned the various sub-clauses of section 35B(1)(b) of the Act under which the respective items were allowed weighted deduction. That it was only while passing the order under section 154 of the Act that the Assessing Officer spelt out for the first time that weighted deduction on the disputed items, was allowed under sub-clauses (i) and (iii) of section 35B(1)(b). It is in this context that the Tribunal has come to the conclusion that the point at issue is highly debatable and, therefore, no action could be ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. Applying the aforesaid principles to the facts of the case, it is apparent that the Tribunal was justified in holding that the true scope of section 35B of the Act could not be the subject-matter of rectification proceedings as the issue was highly debatable and as to which item would fall under each of the sub-clauses was not within the scope of the powers that the Assessing Officer could exercise under section 154 of the Act. It is necessary to take note of the fact that the Tribunal has stated that it 11 agrees with the submission made on behalf of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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