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2014 (2) TMI 663 - AT - Income TaxRectification of order u/s 154 of the Act – Error apparent on record – Addition of expenditure – Held that:- Allowance of expenses on account of leave encashment – whether the expenses are allowable in relevant assessment year on payment basis or an earlier year – Held that:- A question which involved interpretation of law and determination of controversial facts could not be rectified under section 154 of the Income-tax Act, 1961 - Relying upon Deva Metal Powders (P.) Ltd. v. Commissioner, Trade Tax, UP [2007 (12) TMI 221 - SUPREME COURT OF INDIA] a rectifiable mistake must exist and the same must be apparent from the record - It must be a patent mistake, which is obvious and whose discovery is not dependent on elaborate arguments - a rectifiable mistake is a mistake which is obvious and not something which has to be established by a long drawn process of reasoning or where two opinions are possible. Cancellation order passed u/s 154 of the Act – Held that:- The assessee explained before the AO that the brokerage and commission income earned by it in the relevant year - It was explained before the AO that the discount from dealers and manufacturers was also derived by assessee in the relevant assessment year by placing order on behalf of its customers for purchase of cars/vehicles - The discount is basically in the nature of commission given by manufacturer/dealer on the value of every vehicle booked by assessee. According to assessee, due to long term policy and to maintain long term business relations an understanding has evolved between the assessee company and the dealers which entitles the latter to a certain percentage of discount/commission on every booking of vehicles made by it. Discount from dealer/manufacturer – Held that:- The manufacturer/dealer discount is included in the TDS certificates and also accounted for by the assessee under the head brokerage and commission - Whether the discount is allowable as discount from dealer/manufacturer is clearly an allowable deduction - Even though, if at all, it is to be considered not to be allowable, it is a highly debatable issue and this cannot be disallowed u/s. 154 of the Act because this is not a mistake apparent from record - CIT(A) has rightly deleted the addition and we confirm the same – Decided against Revenue.
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