{"id":1189,"date":"2009-12-01T07:54:49","date_gmt":"2009-12-01T07:54:49","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=1189"},"modified":"2009-12-01T07:54:49","modified_gmt":"2009-12-01T07:54:49","slug":"mepco-industries-vs-cit-supreme-court","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/mepco-industries-vs-cit-supreme-court\/","title":{"rendered":"Mepco Industries vs. CIT (Supreme Court)"},"content":{"rendered":"\n\n
Click here to download the judgement (mepco_154_mistake_apparant_from_record.pdf) <\/strong> <\/a><\/p><\/td>\n<\/tr>\n<\/table>\n

Debatable issues are not “mistakes apparent from the record” u\/s 154 <\/strong><\/p>\n

The assessee filed a revision petition u\/s 264 in which it claimed that the subsidy received by it from the government was a capital receipt and not chargeable to tax in view of P.J. Chemicals Ltd<\/strong> 210 ITR 830 (SC). The Petition was allowed by the CIT. Subsequently, the Supreme Court held in Sahney Steel and Press Works<\/a><\/strong> 228 ITR 253 that the subsidy received by that assessee was a revenue receipt. Pursuant to this judgement, the CIT passed a rectification order u\/s 154 by which he held that the subsidy was a revenue receipt. The assessee challenged the said order by a writ petition before the Madras High Court which was dismissed. On appeal by the assessee, HELD allowing the appeal:<\/p>\n

The case was a classic one of change of opinion. The question whether a subsidy is capital or revenue depends on the facts of the case. S. 154 can only apply to a \u201cmistake apparent from the record\u201d. A \u201crectifiable mistake\u201d is a mistake which is obvious and not something which has to be established by a long drawn process of reasoning or where two opinions are possible. A decision on a debatable point of law cannot be treated as a \u201cmistake apparent from the record\u201d.<\/p>\n

\nSee Also: Saurashtra Kutch SE<\/a><\/strong> 305 ITR. 227 (SC), Honda Siel vs. CIT<\/a><\/strong> 295 ITR 466 & Deva Metal Products<\/a><\/strong> (SC) <\/div>\n","protected":false},"excerpt":{"rendered":"

The case was a classic one of change of opinion. The question whether a subsidy is capital or revenue depends on the facts of the case. S. 154 can only apply to a \u201cmistake apparent from the record\u201d. A \u201crectifiable mistake\u201d is a mistake which is obvious and not something which has to be established by a long drawn process of reasoning or where two opinions are possible. Decision on debatable point of law cannot be treated as a \u201cmistake apparent from the record\u201d.<\/p>\n

Read more ›<\/a><\/div>\n

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