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Commissioner of Income Tax Versus Swadeshi Commercial Co. Ltd.

[1992] 106 CTR 122 - IT Ref. No. 90 of 1986 - Dated:- 25-4-1990 - Suhas Chandra Sen And Bhagabati Prasad Banerjee, JJ. JUDGMENT Bhagabati Prasad Banerjee, J. The Tribunal has referred the following question of law to this Court under s. 256 (1) of the IT Act, 1961: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the ITO had exceeded his jurisdiction in invoking provision of s. 154 of the IT Act, 1961 for the purpose of computing relief .....

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ve effect from 1st April, 1968. In view of the said amendment the ITO treated the deduction allowed under s. 80M as mistake apparent from the record and proceeded to rectify the said mistake in both the assessment orders under s. 154 of the IT Act. The objection of the assessee thereto was overruled. The ITO estimated 10 per cent as the expenses for earning the said dividend. The assessee against the said order passed by the ITO under s. 154 of the IT Act preferred an appeal before the CIT(A). T .....

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154. As pointed out by the authorised representative that there is a dispute between the Department and the appellant company as to what should be the net dividend income on which the latter should be entitled to s. 80M relief. And it is a settled law now that any matter on which there is a dispute, or about which there can be a debate cannot be dealt with in a rectification proceedings under s. 154 [T. S. Balram, ITO vs. Volkart Bros. (1971) 82 ITR 50(SC)]." 2. Then the matter was taken u .....

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Bros. (supra). The introduction of s. 80AA might have made the original order erroneous, but there was no mistake apparent from the record which could be rectified under s. 154 of the Act because the exact amount of expenses relatable to the earning of the dividends was not available in the original assessment order as so that figure had to be estimated with reference to a number of factors. Hence, we uphold the order of the CIT(A)." 4. The provisions of s. 154 of the IT Act would only be .....

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efore the ITO there was no such figure available on record and the ITO had to travel beyond the records of the case in order to discover the mistake which would be evident from the following observations made by the ITO in the proceedings under s. 154 of the IT Act. "The assessee had income from business, interest, dividend and rent. Considering the nature of the activities I feel, that out of expenses incurred by the assessee for its total activities expenses to the extent of 10 per cent o .....

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