TaxTMI 
TaxTMI 
2013 (9) TMI 612
X X X X Extracts X X X X
X X X X Extracts X X X X
....ount of Rs. 94,95,000/- from IDBI. 3. Because the action is under challenge on charging interest u/s 234B, 234C of the Income Tax Act." 2.1. Ld. Counsel for the assessee at the out set contends that assessee's appeals are only in support of CIT(A)'s order, do not raise any specific grounds and they are not pressed. In view thereof the assessee's appeals are accordingly dismissed. 2.2. Common grounds raised in Revenue's appeals are as under: "The Ld. CIT(A) has erred on facts and in law by not confirming the order passed by the AO order 154 and by allowing the claim of the assessee u/s 32AB of the I.T. Act, ignoring that: 1. The accrued income had been assessed by the AO as Income from other sources and not as profits and gains of business or profession. 2. Rectification under section 154 can be made only when a glaring mistake of facts or law committed by the AO becomes apparent from the record and the section does not cover any mistake which may be discovered by a complicated process of investigation, argument or proof." 3. Brief facts are: The assessee entered into lease agreements with M/s Mittal Tubes (P) Ltd. ("MTPL") and M/s Rinasu Steels Pvt. Ltd. ("RSPL....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... rental as it was not earned nor accrued due to the non purchase of machinery and termination of lease transaction itself by the lessees. The assessee filed a revised return accordingly. While framing the assessment on the basis of revised return assessing officer though accepted the surrender of claim of deduction u/s 32AB however, held that assessee has earned the lease rental income and brought the same to taxation. Thus assessing officer made double addition i.e. one by bringing to tax the claim of deduction u/s 32AB and taxing the lease rental income although it neither accrued nor it was earned. 3.5. Aggrieved, assessee preferred appeals and before ITAT agitating the issue of double taxation i.e. by way of withdrawal of deduction under section 32AB as per the revised return for A.Y. 1995-96 and by taxing the lease rentals for the various assessment years starting from 1995- 96, which were neither earned nor accrued. The ITAT in the order dated 17.02.2006 in ITA No. 2988 (Del)j99 for A.Y. 1995-96 and ITA No. 1645(Del)/2000 for A.Y.1996- 97, directed the assessing officer to make appropriate modification of assessed income by following observations: "During the course of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... As the case has already been completed for A. Y. 95- 96 u/s 143(3)/254 and in other assessment years there is no mistake apparent from record as discussed above, the application for rectification is hereby rejected for all the assessment years. 3.8. Aggrieved, against the order of assessing officer, assessee filed first appeal. CIT(A) allowed the appeals by following observations: "I have gone through the various orders brought on record for A.Ys. 1995-96 to 1998-99. There is no dispute with regard to surrendering of income of Rs. 94.25 lacs which was claimed u/s 32AB. The ITAT has given clear directions for readjustment of income. All the facts are available on the record. There is no legal issue involved. It is a question of recomputation of income as directed by the ITAT. The AO rejected the petitions u/s 154 on the ground that there is difference of opinion which is not based on any valid reason. After careful consideration of the facts brought on record, the amount of Rs. 94.25 lacs was taxed twice. The taxable income for various assessment years is determined as detailed below:- A.Y. 95-96 A.Y. 96-97 A.Y. 97-98 A.Y. 98-99 Taxable income determ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....same transaction. When the assessee offered for withdrawal of claim of deduction u/s 32AB, citing the reason of cancellation of lease arrangement, the other side of the coin a natural consequence is that transaction having not materialized the lease rental is neither accrued nor earned. This is further evident from the fact that assessee has filed a suit in Hon'ble Delhi High Court in this behalf. (iv) The income which has neither accrued nor earned cannot be brought to tax on ipse dixit more so when the ITAT has issued appropriate directions for consideration. (v) The mistake sought to be rectified is apparent from the record, glaring one and did not require any complicated process of investigation, arguments or proof. (vi) CIT(A) has rightly held the mistake to be apparent from the record and reduced it from assessed income and the lease rental having been taxed under "Income from other sources" makes no difference as what is to be reduced is income from assessed income. Order of CIT(A) is relied on. 6. We have heard rival contentions, perused the material available on record. The facts have been narrated above. The proposed mistake pertains to assessee's claim of ....