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TMI Blog2014 (2) TMI 663X X X X Extracts X X X X X X X X Extracts X X X X ..... first issue in this appeal of revenue is against the order of CIT(A) in cancelling the rectification order passed by AO u/s. 154 of the Act for making addition of expenditure. For this, revenue has raised following ground nos. 1 and 2: "1. That, in the facts and circumstances of the case, Ld. CIT(A) erred in holding that no mistake apparent from the record occurred in the order passed u/s. 143(3) of Income Tax Act, 1961 dt. 31.12.2008 and consequently, deleting the addition of Rs.21,99,790/-. 2. That, in doing so, Ld. CIT(A) overlooked the fact that a clear mistake apparent from the record occurred in the assessment order inasmuch as the expenditure pertaining to the AY 2005-06 was wrongly allowed in AY 2006-07." 3. Briefly stated facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e CIT(A) it was explained by assessee company that in the relevant previous year it made a provision for leave encashment amounting to Rs.40,50,000/- and decided to make compulsory payment of outstanding leave for 50% of accumulated leave in excess of 60 days pertaining to the earlier years. Hence, Company allows a maximum 20 days leave to be carried forward, as it stands clear that the leave salary encashment made in this assessment year pertained to earlier years and not AY 2005-06. According to assessee, it was paid in AY 2006- 07 and assessee company rightly claimed deduction u/s. 43B of the Act in AY 2006-07. The assessee company made payment of Rs.21,99,790/- on 31.05.2005 and claimed this deduction in the relevant AY 2006-07. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide Industries Ltd. has to take call on this issue. 5. We find that the CIT(A) has also considered this issue i.e. allowance of expenses on account of leave encashment whether allowable in relevant assessment year on payment basis or an earlier year, it was neither paid nor claimed by the assessee. There are clearly two possible views and CIT(A) has adjudicated the issue vide para 3.1 and 3.2 as under: "3.1. I have carefully considered the submission of the L.d A.r. The principle governing the applicability of section 154 has been laid down in the decision of the Supreme Court in the case of T. S. Balaram, Income- tax Officer v. Volkart Brothers. The Supreme Court observed that a mistake apparent on the record must be an obvious and paten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer was a view which was not possible but was only a mistake. However in the case under consideration the issue of dispute is whether the deduction on account of leave encashment was allowable in the relevant assessment year on payment basis or in the earlier year even though it was neither paid nor claimed by the assessee . The above questions is not free from the mischief of two possible views. Further whether the manufacture/ dealer discount is included in the TDS certificate issued under the head brokerage and commission or whether the interest from loan margin, investments etc should be assessed under the head Business income or Income from other sources by no stretch of imagination can be said to be a obvious mistake which is ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness of financing assets and earned brokerage and commission income by means of buying assets, managing/clubbing fees and arranging procurement of assets on hire purchase basis on behalf of its customers. The assessee explained before the AO vide letter dated 23.10.2008 and filed details pertaining to brokerage and commission income earned by it in the relevant year. It was explained before the AO that the discount from dealers and manufacturers amounting to Rs.24,57,260/- was also derived by assessee in the relevant assessment year by placing order on behalf of its customers for purchase of cars/vehicles. The discount is basically in the nature of commission given by manufacturer/dealer on the value of every vehicle booked by assessee. Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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