TMI Blog1995 (7) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 143(3) on February 27, 1991, and during the verification it is found that deduction under section 80P(2)(d) was not allowed correctly as it appears that there was no investment with the said co-operative bank while it is only the balance in the current account when the bank allowed interest and as such the conditions of section 80P(2)(d) should have been allowed according to the provisions of section 80AB of the Income-tax Act, because interest paid by the assessee on borrowed funds of Rs. 2.24 crores is directly related to the sales which is deposited with the Kaira District Central Co-operative Bank. The interest paid is much higher than the interest income, and thus, the net result is nil and, therefore, the assessee is not en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and is liable to be rectified. We have carefully considered the rival contentions. Law is well-settled as far as the scope of proceedings under authority to rectify the authorities' own orders whether under section 35 of the 1922 Act or under section 154 of the Income-tax Act, 1961, is concerned, since the decision in T. S. Balaram, ITO v. Volkart Brothers [1971] 82 ITR 50 (SC), which succinctly states as to what is the meaning of a mistake apparent on the face of the record : " A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long-drawn process of reasoning on points on which there may be conceivably two opinions. A decision on a debatable point of law is not a mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... So the admissible deduction under section 80P(2)(d) on interest income comes to Rs. 48,84,628. " Therefore, it cannot be said that the basic assumption of a fact that the assessee was not an investor with the co-operative bank is existing on record and if that fact is taken into account, the assessing authority has reached an apparent wrong decision contrary to the law laid down by the Supreme Court. If the foundational fact itself has to be determined after inviting objections and leading evidence, it cannot be said to be a mistake apparent on the face of the record. It becomes a case where the assessing authority, by holding an enquiry, will have to establish a fact on the basis of which the earlier order can be said to be erroneous. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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