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2016 (6) TMI 1085 - AT - Income TaxWithdrawal of deduction u/s 80IC on transport charges & transport subsidy - whether a mistake apparent from record in terms of section 154 - Held that:- If transportation charges are excluded from the business profits on which the deduction u/s 80IC of the Act is to be allowed then the corresponding expenses will also have to be excluded in which case profits of the business will get reduced to the extent of difference between the transportation charges received by the assessee namely ₹ 8,70,91,329/- and the transport charges incurred by the assessee namely ₹ 8,43,77,509/-. It is not possible for the AO to exclude the entire receipts on account of transport charges only from the profits eligible for deduction u/s 80IC of the Act. We are of the view that the question as to whether the transport chares on finished goods could be considered as profits derived from an undertaking u/s 80IC of the Act and what is to be excluded as to whether the gross transport charges received or the net transport charges received are highly debatable issues which cannot be resolved in the proceedings u/s 154 of the Act. The CIT(A) has taken note of this principle has followed the decision of the Hon’ble Supreme Court in the case of M/s. Mepco Industries Limited vs CIT [2009 (11) TMI 24 - SUPREME COURT ] wherein the principle that debatable issues cannot be the subject matter of proceedings u/s 154 of the Act has been reiterated. In the light of the judicial pronouncements referred to above we are of the view that CIT(A) was fully justified in cancelling the order u/s 154 of the Act. Order of CIT(A) is accordingly upheld and this appeal of the revenue is dismissed. - Decided in favour of assessee
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