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2018 (11) TMI 1933 - AT - Income TaxValidity of rectification proceedings u/s 154 - assessment of income declared in survey u/s 133A - AO made addition on account of declaration of excess stock in the course of survey - AR submitted that the AO has carried out the exercise of rectification on the premise that the entire amount admitted in the course of survey ought to have been offered to tax without making all sorts of claims of expenditure thereon; whereas the only expenditure that increased was restricted to the partners’ salary - HELD THAT:- The contention of Revenue that the claim of expenditure by way of partners’ salary on application of the provisions of Section 40(b) of the Act is not an allowable claim, merely because additional income admitted is reduced, is devoid merit as the assessee firm is entitled to compute salary in accordance with the provisions of section 40(b) of the Act. It is settled position of law that the scope of rectification u/s 154 is restricted to mistakes apparent from the record, like mathematical or typographical errors, and not something that has to be established by way of a long drawn out process of reasoning on which there are two opinions as in the case on hand, where both the AOs involved hold different views. As considering the principles laid down in the case of T. S. Balaram, ITO Vs. Volkart Brothers [1971 (8) TMI 3 - SUPREME COURT] we are of the considered opinion that the rectification carried out by the AO in the case on hand does not fall within the scope on ambit of mistake apparent from the record. We, therefore, hold that the exercise undertaken by the AO is not in accordance with law, since the issue in question being a debatable one, with conflicting opinions of two AO’s, the second AO could not to have resorted to proceedings u/s 154 of the Act and consequently set aside the impugned orders of the authorities below. The original order of assessment passed u/s 143(3) of the Act vide order dated 26.03.2014 for Assessment Year 2012-13 determining the assessee’s income is accordingly restored.
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