Debatable depreciation issue cannot be corrected as a mistake apparent from the record under rectification provisions.

Section 154 of the Income-tax Act, 1961 cannot be used to withdraw depreciation already allowed under section 32 where the underlying issue is debatable. The article notes that whether machinery was in passive use, or whether depreciation should be reduced because of alleged non-use during part of the year, depended on the factual and legal effect of business use and government restrictions. Because that controversy required adjudication on merits, it was not a mistake apparent from the record. Rectification under section 154 was therefore unavailable for reducing the depreciation in the original assessment.

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Issues: Whether the provisions of section 154 of the Income-tax Act, 1961, could be invoked to reduce depreciation already allowed in the original assessment.

Analysis: Depreciation under section 32 is allowable for plant and machinery used for the purposes of business. The question whether the machinery was in passive use, or whether depreciation should be reduced because of alleged non-use during part of the year, turned on the factual and legal position regarding use of the machinery and the effect of government restrictions. That issue was debatable and required adjudication on merits, and therefore it could not be treated as a mistake apparent from the record for the purposes of rectification under section 154.

Conclusion: Section 154 could not be invoked to reduce the depreciation allowed in the original assessment; the answer is in favour of the assessee.

Final Conclusion: The reference was answered by holding that the rectification provision was not attracted, since the point in dispute was debatable and outside the scope of summary rectification.

Ratio Decidendi: A debatable question of law or fact is not a mistake apparent from the record and cannot be rectified under section 154 of the Income-tax Act, 1961.

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