2016 (6) TMI 79

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....(3) of the Income Tax Act, 1961 (hereinafter called as 'the Act') on 22.12.2010. At the time of completion of assessment u/s 143(3) of the Act, the A.O. made an addition of Rs. 17,76,410/- towards disallowance of labour expenses. Thereafter, the A.O. issued a notice u/s 154 of the Act and proposed to rectify the order. The A.O. issued the notice with the observation that while completing the assessment u/s 143(3) of the Act, an amount of Rs. 48,59,340/- was determined is assessed income after making an addition of Rs. 17,76,410/- towards excess claim of labour expenses for which no bills & vouchers are produced. During the course of assessment proceedings, it was observed that the assessee had agreed for 20% disallowance of total la....

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.... of the assessment records, it was observed that the assessee has agreed for a disallowance of 20% of labour expenses which was duly recorded in the order sheet for which the authorized representative of the assessee has agreed. The A.O., while completing the assessment, by mistake has quantified the disallowance of Rs. 17,76,410/- as against Rs. 39,32,977/-. Therefore, there is a mistake in the assessment order which needs to be rectified u/s 154 of the Act. With these observations, dismissed the appeal filed by the assessee. Aggrieved by the CIT(A) order, the assessee is in appeal before us. 4. The Ld. A.R. submitted that the CIT(A) was not justified in coming to the conclusion that the assessing authority is justified in making rectif....

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....d the addition of Rs. 17,76,410/- without any basis. The said mistake was pointed out from the assessment records, which can be rectified u/s 154 of the Act. 6. We have heard both the parties and perused the materials available on record. The A.O. rectified the assessment order passed u/s 143(3) of the Act by invoking provisions of section 154 of the Act. The A.O. was of the opinion that there is a mistake in the assessment order passed u/s 143(3) of the Act which needs to be rectified u/s 154 of the Act. The A.O. observed that at the time of completion of assessment u/s 143(3) of the Act, the disallowance of labour charges was wrongly added. It was further observed that the assessee has agreed for disallowance of 20% labour charges, whi....