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TMI Blog2015 (9) TMI 1676X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s Power Tracks approved Chartered Engineers to prove the date of installation of the new plant and machinery, Certificate of Central Excise Department regarding installation of new plant and machinery all of which showed that the assets were installed by August 2006. It supports case of assessee on merits. On the other hand the AO has relied upon detail of WIP provided by the assessee during reassessment proceedings which showed that the Capital WIP was capitalized in the month of February 2007 to believe that the assets were put to use for less than 180 days. Clearly this appears to be a matter which requires long drawn process of reasoning. The mere fact that capital WIP was capitalized in the month of February does not settle the issue of claim of depreciation. The assets may have been installed and ready for use earlier as claimed by the assessee. The point therefore is clearly debatable and requires further investigation which is not permissible u/s 154 of the Income Tax Act. In case of T.S. Balram, ITO, Vs. Volkart Brothers and Others, 1971 (8) TMI 3 - SUPREME COURT held A decision on a debatable point of law is not a mistake apparent from record. Hon bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ets on 21/08/2006 and all interest paid up to that date which amounted to ₹ 18,77,665/- was charged to pre operative expenses. The assessee further stated that all pre operative expenses up to the date of 21/08/2006 i.e; date on which it put to use the assets were capitalized and no part was claimed as Revenue expenditure thus the assessee claimed that no interest was disallowable under section 36(1)(iii) of the Income Tax Act. 4. The AO after considering reply of the assessee stated that though the assessee had claimed the assets to be put to use on 21/08/2006, but the details of the work in progress account filed by the assessee showed that the work in progress continue to exist through out the year. Therefore recalculating the interest on work in progress up to the date on which it was capitalized in the books i.e; February 2007, an amount of ₹ 68,16,891/- was calculated as interest which ought to be added back under section 36(1)(iii) of the Act. Giving allowance to the amount of interest already capitalized by the assessee amounting to ₹ 18,77,665/- and the interest disallowed by the AO under section 143(3) vide order dt. 10/12/2008 amounting to ₹ 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, it is held that the Assessing Officer was right in disallowing the impugned depreciation on plant machinery and electrical installation u/s 154 of the Act. Grounds of appeal taken by the appellant are dismissed. 7. Aggrieved against the order of Ld. CIT(A) the assessee filed an appeal before us taking the following grounds of appeal: 1. That the order of Learned CIT(A) is bad against the facts Law. 2. That the Learned CIT(A) has wrongly upheld the initiations of proceedings u/s 154/155 as valid on debatable issue. 3. That the Learned CIT(A) wrongly upheld the disallowance of depreciation of ₹ 2,05,59,642/- on addition during the year in Plant Machinery. 4. That the Learned CIT(Appeals) wrongly upheld the disallowance of depreciation of ₹ 1,08,366/- on addition during the year in Electrical Installations. 8. The only effective ground of appeal in this case is against the initiation of rectification proceedings u/s154 of the Act and the consequential disallowance of depreciation of ₹ 2,05,59,642/- on addition to Plant Machinery and ₹ 1,08,366/- on addition of Electrical Installations during the year. 9. The Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he only issue in the present appeal is whether in the prevailing facts rectification proceedings u/s 154 could be resorted to and if yes, whether the excess depreciation was correctly disallowed. It is settled law that rectification proceedings under section154 can be resorted to, only to correct glaring and obvious mistakes of fact and law. If all facts are on record and no further calculation or ascertainment is necessary and if on these facts it is clear that an error of law or fact has been made, that error can be rectified u/s 154. Conversely mistakes which can be discovered only by a complicated process of investigation, argument, elucidation, or debate cannot be said to be apparent mistakes and in such cases 154 cannot be resorted to. We rely on decision of Calcutta High Court in case of Hindustan Lever Ltd. Vs. JCIT Others, 284 ITR 42. 14.In the present case the alleged mistake sought to be rectified is the depreciation granted to the assessee u/s 32, on applicable rates for the entire year, which as per the AO should actually have been restricted to 50% only since on the basis of information on record with the AO, the assets were put to use only in February ..... X X X X Extracts X X X X X X X X Extracts X X X X
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