Case Law Details
Dhabriya Polywood Limited Vs DCIT (ITAT Jaipur)
ITAT Jaipur held that disallowance of expenditure by invoking rectification provisions of section 154 of the Income Tax Act is unjustifiable as the same is not mistake apparent on record.
Facts- The assessee is a company engaged in the business of manufacturing of extruded PVC profile section etc. AO completed the assessment u/s 143(3) of the Act at a total income of Rs. 4,67,04,130/- by disallowing expenses of Rs. 1,73,849/-. Disallowance being insignificant, no appeal was filed by the assessee against the order of the AO.
Thereafter, AO invoked the provisions of Section 154 of the Act, disallowed expenditure of Rs. 9,54,000 and computed total income of Rs. 4,76,58,130. Against the order passed by the AO, u/s. 154 of the Act, the assessee company preferred an appeal before the Id. CIT(A) who dismissed the appeal of the assessee company.
Conclusion- Held that whether to disallow or not the expenditure named ROC filing fee amounting to Rs.9,3 8,000/- is outside the purview of Section 154 of the Act as provisions of Section 154 of the Act for rectifying the order can be invoked only for making mistake apparent on record. The invocation of section 154 of the Act as made by the AO in the case of the assessee is not justifiable because Section 154 talks about mistake apparent on record that has to be a mistake which is apparent on the face of the record without involving any debatable question of law. Hence taking into consideration the entire facts of the case, the Bench does not concur with the findings of the ld. CIT(A) and the Ground No. 1 and 2 of the appeal of the assessee is allowed.
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