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2020 (12) TMI 174 - AT - Income TaxRectification u/s 154 - assessee said to be claimed depreciation on plat and machinery @ 60% against the applicable rate of 10% - Assessee disclosed the office equipment under separate head entitled for 60% depreciation - whether these office equipment – computers or computer parts are entitled for depreciation at 60%? - HELD THAT:- If the AO applied the wrong provision of law in the original Assessment or applied wrong rate of depreciation, it could be rectified in proceeding under section 154 of the Act. In our opinion, this view of the DR is justified. We find that as per entry No.5 in the new Appendix I attached to Income Tax Rules, 1962, w.e.f. Assessment Year 2006-07 onwards, applicable rate of depreciation for computer or computer parts is at 60%. Accordingly, we direct the AO to grant depreciation on these items at 60%, and we uphold the order of CIT(A) on this issue. Disallowance u/s 14A r.w.r. 8D - Suo moto disallowance by assessee - AO has to go through various components like interest bearing funds, average value of investment, average value of total assets as appeared in the Balance Sheet of the assessee on the day and last day of the previous year, amount of expenditure directly relating to income which does not form a part of the total income. Being so, the issue is very debatable, the disallowance cannot be proceeded under section 154 of the Act. As rightly pointed out by CIT(A) that rectification under section 154 of the Act can only be made with regard to mistake of fact or law committed by the officer passing the order becomes apparent from the record, rectification is not possible if the question is debatable. A point which was not examined on facts or in law cannot be dealt with as a mistake apparent from the record. Interest on delayed payment of TDS - Allowable expenditure - HELD THAT:- In our opinion, it is compensatory in nature and not penal in nature as held by Co-ordinate Bench in the case of M/s. IDS Next Business Solutions Pvt. Ltd [2018 (6) TMI 1730 - ITAT BANGALORE]. Accordingly, it is an allowable expenditure. In this issue, CIT(A) has taken correct view and no interference is called for.
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