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2016 (2) TMI 676 - AT - Income TaxRectification of mistake - addition to the book profit of the assessee on account of provision for bad and doubtful debts by applying that clause (i) holding that the amounts set aside as provision for diminution in value of the assets covers this item of expenditure debited and is required to be added - CIT (A) upheld the action of AO holding that rectification is because of retrospective amendment and this amendment was not available when CIT (A) decided the issue and further the original addition was under clause (c) of the explanation of Section 115JB and now rectification is made by applying clause (i) of explanation (1) to section 115JB of the Act - Held that:- The issue of provision for deduction of provisions of bad and doubtful debts has been considered and decided by Commissioner of Income Tax (Appeals), then rectification is also required to be made by the Commissioner of Income Tax(Appeals) only and not by the Assessing Officer as the matter of allowability of provision of bad and doubtful debts while working out book profit tax u/s 115JB of the Act has already been decided by CIT (A). Admittedly, in this case, the provisions of Section 154 have been invoked by the Assessing Officer, which he is not competent to do. Clarifying the facts that retrospective amendment made u/s 115JB of the act is no doubt a mistake apparent from the record but issue was whether AO can do that when on the same item of expenditure debited in the books of accounts CIT (A) has decided the issue. In our opinion it is only CIT (A) who is competent to assume jurisdiction u/s 154 of the act. Therefore, we are of the view that the rectification provisions invoked by the Assessing Officer are not correct. Therefore we reverse the order of CIT (A) on these count. - Decided in favour of assessee Charging of interest u/s 234D - withdrawal of interest u/s 244A - Held that:- As we have already held that AO is not empowered to invoke the provision of section 154 of the act on the matter already decided by CIT (A) u/s 154(1A) of the act and therefore interest u/s 234D as well as interest withdrawal u/s 244A of the act are consequential in nature and accordingly they are if arising out of order u/s 154 of the act of the AO same would also be decided accordingly in favour of the assessee. Levy of interest u/s 234B - addition made by Assessing Officer under Section 154 of the Act arising on account of retrospective amendment u/s 115JB - Held that:- No interest shall be chargeable u/s 234B of the act on tax liability arising on the assessee by virtue of retrospective amendment u/s 115JB of the Act.
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