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TMI Blog2018 (10) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... DD, only an assessee, who is an Indian company is eligible for this deduction. As the assessee is not an Indian company, deduction under sec. 35DD could not be allowed. As this is a mistake, the Assessing Officer issued a notice under sec. 154 on 21/03/2014 proposing to rectify the same. In response to the notice, the assessee has submitted that as per section 44DB, the assessee has to be treated as company for the purpose of section 35DD and the claim allowable to a company, are to be allowed to the assessee also being a Co-operative bank. Alternatively, it was submitted that the assessee is eligible for deduction under sec. 32 of the act. The Assessing Officer has considered the explanation and rejected the same by observing that as per section 35DD, only Indian companies are eligible to make claim. As the assessee is not an Indian Company, not eligible to make claim under sec. 35DD(1) of the Act. The Assessing Officer further observed that the assessee is registered under the A.P. State Mutually Aided Co-operative Society Act, 1995 and is not registered with the Registrar of Companies, therefore, assessee is not eligible for deduction under sec. 35DD of the Act, assessee being a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see is not an Indian Company, not eligible to make clam, hence, it is a mistake apparent on record committed by the Assessing Officer in allowing benefit under section 35DD, the same can be rectified under section 154 of the Act. He further submitted that section 44DB is a special provision for computing the deduction in the case of business organisation of cooperative banks, if at all assessee wants to make a claim, he can make under section 44DB and not 35DD. 11. So far as alternative submission in respect of claim made under section 32 is concerned, ld. Departmental Representative has submitted that the assessee neither acquired the goodwill nor commercial right, therefore, this claim has not been considered under section 32 of the Act. 12. We have heard both the sides, perused the martial available on record and gone through the orders of the authorities below. 13. The assessee (acquirer) is a cooperative bank registered under the Cooperative Societies Act and filed its return of income for the year under consideration, wherein it has claimed 1/5th of cost of acquisition of Palakollu Cooperative Bank as expenditure under section 35DD, amounting to Rs. 57,81,212/-, same is al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of expenditure under section 35DD of the Act. The Assessing Officer by allowing claim of the assessee under section 35DD has committed a mistake apparent on record. The Assessing Officer has applied inapplicable provisions to the assessee's case i.e. 35DD allowed the claim made by the assessee on face of it, there is a mistake apparent on record. Therefore, same can be rectified under section 154 of the Act. The ld. CIT(A) by considering the entire facts and circumstances of the case, confirmed the rectification order passed by the Assessing Officer by holding that the order passed by the Assessing Officer is within the scope of section 154 of the Act. We find that ld. CIT(A) correctly confirmed the order of the Assessing Officer. 17. So far as case law relied on in the case of Hindustan Liver Ltd. (supra) is concerned, the Hon'ble Calcutta High Court has held that whether provision of law is right or wrong is a debatable issue and cannot be resolved by exercise of power under section 154 of the Act. In the instant case, the assessee made a claim under section 35DD, the Assessing Officer has to see whether claim is eligible or not, but without examining, allowed the same. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f losses it is settled principle that the specific provisions of Income Tax Act override the general provisions of cooperative societies Act /RBI guidelines and confirmed the order of the Assessing Officer. Before us, the assessee has not filed any material to substantiate that the losses /unabsorbed depreciation of the amalgamation company ascertained as per provisions of section 72AB of the Act. Therefore, we find that the ld. CIT(A) rightly confirmed the order of the Assessing Officer by observing that the entitlement of allowance of such losses in the hands of the said bank (amalgamated bank) or its eligibility to be carried forward under the provisions of section 72 was not proved. Therefore, we find that the ld. CIT(A) rightly considered the issue and confirmed the order of the Assessing Officer. 19. So far as another argument raised by the assessee is that liability undertaken by the assessee by paying over and above the asset value has to be considered as payment for acquiring commercial rights. This aspect has been considered by the ld.CIT(A) and observed that the assessee has not paid any consideration for acquisition of Palakollu Bank and only has taken accumulated loss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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