TMI Blog2009 (8) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... - AO committed an error apparent by not taking the income/loss derived from other businesses while computing the total income. It is only after the amendment was brought about in the year 1996 that the assessee has been held entitled to deduction of 40% only on the income derived from long term financing business. – This mistake can be rectified u/s 154 - 4 of 2001 with 5 of 2001 - - - Dated:- 17-8-2009 - Deepak Gupta, and V.K. Ahuja, JJ Mr. Vishal Mohan Mr. Y. K. Thakur, for the appellants. Mr. Vinay Kuthiala, Advocate, for the respondents. JUDGMENT Deepak Gupta, J. (Oral): - Both the aforesaid appeals are being disposed of by way of a common judgment. ITA No.4 of 2001 has been admitted on the following substantial q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/-. The expenses eligible for deduction were Rs.2,53,18,607/- and the net gross income from long term finance was Rs.1,72,15,433/-. The appellant claimed 40% deduction under Section 36(1)(viii) of the Income Tax Act, 1961, amounting to Rs.68,86,173/-. For the assessment year 1988-89, the gross income from financing business was Rs.5,33,30,183.33 and the deductions on account of expenses amounted to Rs.3,28,86,683.60 leaving a net income of Rs.2,04,44,129.73. On this amount, the assessee claimed deduction of 40% i.e. Rs.81,77,652/-. These returns were accepted by the Income Tax Officer. Thereafter, a notice was issued to the assessee under Section 154 of the Income Tax Act, in which the assessee was notified that according to the Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come" means the total amount of income referred to in section 5, computed in the manner laid down in this Act;" "5. (1) Subject to the provisions of this Act, the total income of any previous year of a person who is a resident includes all income from whatever source derived which - (a) is received or is deemed to be received in India in such year by or on behalf of such person; or (b) accrues or arises or is deemed to accrue or arise to him in India during such year; or (c) accrues or arises to him outside India during such year: xxxxxxx xxxxxxxxx xxxxxxxxxxx xxxxxx xx xxxxxxx xxxxxxxxxxx" At this stage, it is pertinent to mention that in the year 1996, an amendment was brought in Clause (viii) of Section 36(1) and after the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 154 of the Income Tax Act, only an error apparent on the face of the record can be rectified and he submits that in this case, there were two interpretations possible to the Section and, therefore, the mistake, if any, cannot be said to be an error apparent on the face of record. There can be no manner of doubt that an error apparent on the record must be a glaring mistake which stares from the face of the record. In our considered view, this mistake was apparent from the record in the present case. Clause (viii) of Section 36(1), as it stood prior to its amendment, clearly envisaged that the deduction was to be made from 40% of the total income. Total income would obviously include income from businesses other than long term financi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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