1995 (2) TMI 145 - AT - Income Tax

Summary

Issues:
1. Interpretation of the word 'or' in item Nos. (a) to (ha) in the Explanation to section 115J(1A) for computing book profit.
2. Jurisdiction of Assessing Officer to rectify orders under section 154.

Analysis:
The judgment involves the interpretation of the word 'or' in item Nos. (a) to (ha) in the Explanation to section 115J(1A) concerning the computation of book profit. The appellant, a closely held company in the electronic goods business, filed an appeal against the Commissioner (Appeals)'s order, which upheld the Assessing Officer's decision under section 154. The Assessing Officer rectified the mistake in the appellant's income computation under section 115J, leading to the appeal. The appellant argued that only one of the items listed in (a) to (ha) should be disallowed for arriving at the book profit, while the departmental representative contended that all items must be disallowed based on a plain reading of the Explanation. The Tribunal analyzed the legislative intent behind the provision and held that all items listed are distinct, and any item available for disallowance can be added back to compute the correct book profit. The Tribunal referred to legal principles stating that sometimes 'or' can be interpreted as 'and' to fulfill legislative intent. Ultimately, the Tribunal upheld the Commissioner (Appeals)'s decision, dismissing the appeal due to the apparent error in the computation.

Regarding the jurisdiction of the Assessing Officer to rectify orders under section 154, the appellant argued that the Assessing Officer lacked the authority to rectify the order as per the law. The appellant contended that the Explanation to section 115J(1A) allows for disallowance of any one item from (a) to (ha) for computing book profit. In contrast, the departmental representative relied on previous orders and maintained that all items listed must be disallowed based on a literal interpretation of the Explanation. The Tribunal considered these arguments but focused its decision on the interpretation of the word 'or' in the provision and the legislative intent behind it. The Tribunal concluded that the Assessing Officer had rectified the mistake correctly, as the error was evident on the record. Consequently, the Tribunal dismissed the appeal, affirming the orders of the lower authorities and upholding the rectification made by the Assessing Officer under section 154.