TMI Blog1976 (3) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... year 1963-64, the Income-tax Officer had allowed to the petitioner relief under section 84 of the Income-tax Act, 1961, as it stood in the relevant year in respect of the said chemical unit set up at Porbandar. The relief was allowed under section 84 of the Act by the said order and was to the extent of Rs. 8,72,753. Being aggrieved by certain disallowances, the assessee preferred an appeal from the said order of the Income-tax Officer. In the meantime, there was an order of rectification under section 154 on 2nd February, 1968. The point on which the said order was rectified is not relevant for the present purpose. The Appellate Assistant Commissioner passed the appellate order on 31st October, 1969. In the meantime it appears that pursuant to a notice under section 148 of the Income-tax Act, 1961, there was an order of reassessment for the said year on 25th March, 1969. The impugned notice which is the subject-matter of challenge in the instant case before me was issued, as mentioned before, on the 15th November, 1971. The said notice indicated the nature of the mistake which was proposed to be rectified as follows : " Nature of mistake proposed to be rectified.--- The relief u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961. Section 154 permits rectification only if there is a mistake apparent from the record. The scope and occasions for such rectification have been examined by the Supreme Court and several High Courts. A mistake to be corrected under section 154 must be obvious, patent and self-evident. A mistake on which conceivably there can be two views cannot be rectified by virtue of section 154 of the Act. Reliance in this connection may be placed on the observations in the cases of T. S. Balaram v. Volkart Brothers [1971] 82 ITR 50 (SC), India Foils Ltd. v. Income-tax Officer [1973] 87 ITR 333 (Cal), Harbans Lal Malhotra Sons P. Ltd. v. Income-tax Officer [1972] 83 ITR 848 (Cal) and Income-tax Officer v. Raleigh Investment Co. Ltd. [1976] 102 ITR 616 (Cal). Whether, however, a mistake is one which is patent or obvious or self-evident or one on which two views are conceivably possible depends upon the facts and the circumstances of each case. I have noticed the mistake proposed to be rectified by the impugned notice. In this case leave was given to the revenue to file supplementary affidavit. Pursuant to the leave an affidavit has been filed wherein Anil Kumar Majumdar, the Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rebate for the assessment year 1962-63, amounting to Rs. 35,36,014. Had it been set off as required by law there would have been a trading loss of the said unit even for the assessment year 1963-64, and the assessee-company would not have been entitled to any rebate under section 84 of the said Act for the assessment year 1963-64 in respect of the said unit. " The question, therefore, seems to be that for the assessment year 1962-63, the assessee had been allowed set-off on depreciation from its total income computed from the new industrial undertaking as well as from the income from other heads. But, according to the Income-tax Officer, the assessee's profits and gains from the new industrial undertaking for the assessment year 1962-63 was not sufficient to set off the entire depreciation allowable to the new industrial undertaking. Therefore, it was contended that such depreciation and development rebate which the new industrial undertaking was entitled to for the assessment year 1962-63 and which though in fact had been set off against the total income of the assessee for that year, could not have been set-off against the profits and gains of the new industrial undertaking. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat previous year and so on for the succeeding previous years. Similarly, there is a provision for development rebate. Sub-section (2) of section 33 deals with the manner the development rebate, which remains unabsorbed, should be carried forward. In the instant case it is indisputable that the depreciation as computed for the previous year has been given full effect against the total income of the assessee for the said previous year as computed in accordance with the provisions of the Act. Counsel for the revenue contended that under the scheme of the Act for the purpose of granting relief to the new industrial undertaking such units were treated as separate units and computation of income, profits or gains as well as reliefs were treated separately from the assessee's other incomes and, therefore, if in a particular case depreciation had not been given full effect to as against the profits or gains computed in respect of a new industrial undertaking, the said depreciation should be carried forward and should be set off again against the profits or gains of the new industrial undertaking of the succeeding year. On behalf of the petitioner it was, on the other hand, contended that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concession contained in section 15C of the Indian Income-tax Act, 1922, was because the legislature had intended to provide an incentive for expansion of trade and setting up of new industries, apparently to vitalise the industrial progress. Its scope was explicit because it was centrifuged in and linked to the new industrial undertaking and the profits or gains which that undertaking would obtain during the period of its working. Such profits of the new undertaking computed in accordance with the provisions of section 10 did not have any impact or relation in such profits which the assessee who formed it might obtain under the Act. No telescoping of the income, profits or gains of the assessee obtained by the new industrial undertaking was envisaged in section 15C. The assessee and the undertaking independently operated in their respective fields of taxation in so far as section 15C was concerned. The Madras High Court expressed its opinion on the construction of section 15C of the Indian Income-tax Act, 1922, which was in pari materia with section 84 of the present Act. In a reference under section 66(1) of the Act the question had been referred to the High Court for its answer. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y calculated on account of blocking of the capital investment in the new industrial undertaking. In this connection my attention was drawn to the profit and loss account for the year ended 31st March, 1962, for the Chemicals division, Saurashtra Chemicals, Porbandar. This is at page 23 of the affidavit of Jagdish Prasad Sharma affirmed on 23rd August, 1974, wherein in arriving at the balance of profit, interest due to head office, this amount from Porbandar branch was stated to be Rs. 27,43,564. It was pointed out that said interest was debited in the account of Saurashtra Chemicals as interest due to the head office. The said sum was for internal accounting purpose credited in the books of account of the head office as interest from the said unit of Saurashtra Chemicals inasmuch as the Saurashtra Chemicals was the proprietary concern of the petitioner-company there was and could not be any question of or occasion for payment of any interest by the said unit of Saurashtra Chemicals. In the assessment orders made for the assessment years 1962-63 and 1963-64 such internal book adjustment of interest had not been taken into consideration and rightly so. Therefore, it was urged that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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