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Section 154 of the Income-tax Act, 1961 - Rectification of mistakes - Apparent from ''record - Assessee-company was. running a sugar mill on seasonal basis and in "relevant year it worked for 132 days - ITO allowed extra shift allowance for whole year at rate of 50 per cent of normal depreciation allowed - However, subsequently when decision of Calcutta High Court in Ganesh Sugar Mills Ltd. v. CIT [1969] 73 ITR 3&5 was rendered on 14-3-1969 holding that in such cases extra shift allowance has to be allowed on proportionate basis, ITO rectified original assessment order under section 154 - Whether in view of fact that at time when action under section 154 was taken by ITO there was no conflict of judicial opinion between different High Courts on point in issue, ITO was justified in rectifying original assessment order - Held, yes Facts The assessee-company owned and ran a sugarmill on a seasonal basis. During the relevant year the sugar mill was run for 132 days. In the original assessment, the ITO allowed the assessee extra shift allowance for the whole year at the rate of 50 per cent of the normal depreciation allowed. Subsequently, the ITO Initiated proceedings under section 154 and by his order dated 14-3-1969 reduced the extra shift allowance from 50 per cent of the normal depreciation allowance to 50 per cent of 132/300 of such depreciation. On appeal, the AAC, however, accepted the assessee's claim and held that the assessee was entitled to extra shift allowance as originally allowed. On appeal before the Tribunal, the revenue submitted that the controversy had been concluded by the decision of this Court In the case of Ganesh Sugar Mills Ltd. v. CIT [1969] 73 ITR 395 which held in similar facts that a seasonal factory would not be entitled to extra shift allowance at the same rate as a factory which had run on a regular basis for the whole year. The Tribunal, however, held that in the absence of a decision of the Supreme Court, the issue could not be held to be free from doubt and, therefore, there was no mistake apparent from the record which could be rectified under section 154. On reference: Held After the decision of the Calcutta High Court was…

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