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2016 (6) TMI 1084 - AT - Income TaxHigher rate of depreciation on account of hiring of vehicles - rectification of mistake - AO reduced the depreciation from 30% to 15% by resorting to provisions of section 154 - Held that:- When an assessee receives hire charges/rental receipt on account of hiring of vehicles the issue relating to rate of depreciation is a debatable one. The Hon’ble Supreme Court in the case of Volkart Brothers and others (1971 (8) TMI 3 - SUPREME Court ) has held that a mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. A decision on a debatable point of law is not a mistake apparent from the record. It has also been held by various decisions that rectification proceedings u/s.154 cannot be initiated on debatable issues. Since the issue in the instant case is a highly debatable issue, i.e. whether the assessee is entitled to higher rate of depreciation on account of hiring of vehicles, therefore, we are of the considered opinion that it is not a case for rectification u/s.154 of the I.T. Act. We, therefore, are of the considered opinion that the AO could not have reduced the depreciation from 30% to 15% by resorting to provisions of section 154 of the I.T. Act. The Ld. Counsel for the assessee also made a statement at the bar that in the subsequent year although the assessee has claimed such higher rate of depreciation at 30%, however, no proceedings u/s.154,163/148 has been initiated. In this view of the matter, we set aside the order of the CIT(A) and direct the AO to delete the addition made by him. - Decided in favour of assessee
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