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[2007] 292 ITR 557 (MAD.) HIGH COURT OF MADRAS Commissioner of Income-tax v. Nonmag Wires (P.) Ltd. P.D. DINAKARAN AND MRS. CHTTRA VENKATARAMAN, JJ. TAX CASE (APPEAL) NO. 206 OF 2003 JANUARY 31, 2007 Section 154 of the Income-tax Act, 1961 - Rectification of mistakes - Apparent from records â–  Where assessment was taken up for rectification on the view that assessee could set off carried forward loss only to the extent of business income and that only carried forward depreciation loss could be adjusted against short-term capital gains, since on date of proceedings under section 154, there were conflicting opinions on aforesaid question, proceedings under section 154 were not justified The assessment was taken up for rectification by the Assessing Officer on the view that the assessee could set off carried forward loss only to the extent of business income and that only the carried forward depreciation loss could be adjusted against the short-term capital gains. On notice, the assessee contended that the losses relating to the earlier years were determined and allowed to be carried forward for setting off against the taxable income and, as such, the assessment was rightly done. The Assessing Officer rejected the contention of the assessee and rectified the assessment. In view of the conflicting views expressed in several of the decisions relating to similar claim, the assessee further submitted that it was not open to invoke the provisions under section 154. Held that it was an admitted case that on the date of proceedings under section 154, there were conflicting opinions on the question involved. A decision on a debatable point of law certainly is not a mistake apparent from the record. Hence the proceedings taken under section 154 were totally unjustified. Further when the order was passed in unmistakable terms referring to section 154, the plea of the revenue to sustain the order of assessment under any of the provisions of the Act could not be accepted. Having regard to the admitted fact that the claim itself was considered and settled long after the invoking of the jurisdiction under section 154, in the decision reported in Karnataka Small Scale…

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