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2022 (9) TMI 1319 - AT - Income TaxRectification of mistake u/s 154 - enhancing the tax liability of the assessee u/s.115BBE - Scope of debatable issue - additions under the head “income from other sources” while completing the assessment u/s.143(3) for Undisclosed principle and interest and Unexplained money u/s.69A - rectification as tax on the additions made during the assessment proceedings is computed erroneously under normal rate of tax interest instead of higher rate of tax under Section 115BBE - HELD THAT:- During the assessment proceedings the AO verified the material found during the course of search and also perused the statement recorded u/s 132(4) - It is noticed that the assessee in the statement recorded has explained the assessee receives income from agricultural land and also some interest on hand loans given by the assessee. The assessee while answering Q.No.10 has stated that the source for these hand loans is his agricultural income and the interest income over the years. It can be observed from the order of the AO in para 11.1 where the AO has noted down certain facts as those emerging out of the statement recorded from the assessee wherein the AO himself has stated the fact that the assessee earn income from agriculture and money lending business. It is an admitted fact that the source for the money lending business is agricultural income and the interest income earned by the assessee. In the light of these factual findings we see merit in the argument by the learned A.R. that the decision of the AO to make addition without invoking section 69 /69A and also initiation of penalty proceedings under Section 270A of the Act is taken consciously. It cannot therefore be said that invocation of Section 69A and consequently Section 115BBE of the Act is accidental omission by inadvertence to be termed as prima facie mistake apparent from record for the purpose of rectification under Section 154 of the Act. In the legal issue whether the addition can be termed as made u/s.69A by a rectification order u/s.154, we are of the considered view that the impugned addition whether to be made u/s.69A is highly debatable in view of the submissions made by the assessee denying ownership of the document found in the course of search. When the taxability of the addition under a specific section is a point of contention / debatable, the tax levied on the said addition cannot be said to be not debatable. In the case of PCIT vs. Mphasis Software and Services (India) Pvt Ltd [2022 (1) TMI 790 - KARNATAKA HIGH COURT] held that invoking section 154 would be untenable when the matter requires adjudication upon the issue which is debatable issue. We hold that the AO is not correct in passing the order of rectification u/s.154 enhancing the tax liability of the assessee u/s.115BBE and we therefore delete the same. The appeal is allowed in favour of the assessee.
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