Law:

Section:

Section 154, read with section 34, of the Income-tax Act, 1961 - Rectification of mistake - Apparent from records - Assessment year 1973-74 - While completing assessment, ITO allowed deduction on account of development rebate even though assessee could not produce books of account on ground that they were not maintained - Assessee had deposited Rs. 12,000 in fixed deposit which according to him amounted to creation of development rebate reserve as required under section 34 - Subsequently ITO initiated proceedings under section 154 and held that assessee was not entitled to deduction under section 34 as he had not maintained any books of account -Whether question as to whether deposit of certain amount by way of fixed deposit in bank could satisfy requirement of creating a development rebate reserve or not was a debatable issue and as such question could not have been decided in a proceeding under section 154 - Held, yes FACTS While completing the assessment pertaining to the assessment year 1973-74, the ITO allowed deduction on account of development rebate in respect of machineries acquired during this period even though during the assessment proceedings no books of account were produced by the assessee on the ground that the same were not maintained. Subsequently, the ITO felt that the aforesaid deduction by way of development rebate was wrongly allowed to the assessee. He, therefore, initiated proceedings under section 154 and held that since the assessee had not maintained any books of account, he was entitled to deduction in question. In the order of rectification, it had been specifically recorded that the assessee had deposited Rs. 12,000 in fixed deposit account and that account remained unutilised for the purpose of business. On second appeal, the Tribunal held that the deposit of Rs. 12,000 as fixed deposit with the bank satisfied the requirement of creating development rebate reserve under section 34(3) to enable the assessee to claim rebate and there was no mistake apparent on the face of the record which could be rectified under section 154. On reference: HELD In the instant case admittedly the assessee had deposited Rs. 12,000 in fixed deposit…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492