Debatable computation of gross total income cannot be rectified as an apparent mistake under section 154.

Withdrawal of relief under section 80HH by rectification under section 154 was held invalid because the computation of gross total income depended on the order of set-off of brought-forward losses and unabsorbed depreciation. Gross total income under Chapter VIA must be determined in accordance with the Act before Chapter VIA deductions, but the relevant computation issue was debatable and capable of two reasonable views. Since a point open to differing interpretations cannot amount to a mistake apparent from the record, section 154 could not be used to withdraw the deduction.

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Issues: Whether the withdrawal of relief under section 80HH by rectification under section 154 was valid when the computation of gross total income depended on the order of set-off of brought-forward losses and unabsorbed depreciation.

Analysis: Gross total income under Chapter VIA is the total income computed in accordance with the Act before deductions under that Chapter. The dispute turned on whether the assessee's income had to be worked out after setting off earlier years' losses and depreciation, or whether relief under section 80HH could be allowed on the computation initially adopted by the Income-tax Officer. The relevant provisions and the differing views on the manner of computation showed that the issue was not free from doubt and two views were possible. A matter open to two reasonable interpretations cannot be treated as a mistake apparent from the record for the purposes of section 154.

Conclusion: The rectification was invalid and the withdrawal of relief under section 80HH could not be sustained.

Ratio Decidendi: Where the admissibility of a deduction depends on a debatable interpretation of the computation provisions, the point is outside section 154 because it is not a mistake apparent from the record.

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