CIT vs. INDIAN FARMERS & FERTILIZERS CO OPERATIVE LTD

IN THE HIGH COURT OF DELHI AT NEW DELHI . ITA 173/2012 . ITA 174/2012 . . . CIT ..... Appellant . Through Mr. Kamal Sawhney, sr. standing counsel . versus . . . INDIAN FARMERS and FERTILIZERS . CO OPERATIVE LTD ..... Respondent . Through . CORAM: . HON'BLE MR. JUSTICE SANJIV KHANNA . HON'BLE MR. JUSTICE R.V.EASWAR . . . O R D E R . 26.03.2012 . . . These appeals by the Revenue, which relate to assessment years 2003-04 and 2004-05 arise out of orders passed by the Assessing Officer under Section 154 of the Income Tax Act. By the said orders, Assessing Officer had disallowed prior period expenses and reduced the rate of depreciation on computer accessories and peripherals from 60% to 25%. . 2. The orders under Section 154 of the Act were set aside by the Commissioner of Income Tax (Appeals) holding that these were debatable issues, which do not fall in the four corners of the Section 154 of the Act. . 3. By the impugned order, the Tribunal has dismissed the appeals filed by the Revenue. . 4. In our opinion, the appeals were rightly dismissed and Assessing Officer had erred in invoking Section 154 of the Act. Power under Section 154 of the Act cannot be exercised to rectify errors or mistakes which are debatable and on which two views are possible. The two additions/disallowances made by the Assessing Officer were both on debatable issues. On the question of rate of depreciation two views are possible and there is a decision of Delhi High Court in favour of the assessee. On the first issue relating to prior period expenses, in other assessment years we have agreed with the assessee and dismissed the appeal of the Revenue. The present appeals do not have any merit, as such no substantial question of law arises. . 5. Appeals are accordingly, dismissed. . . . SANJIV KHANNA, J . . . . . R.V.EASWAR, J . MARCH 26, 2012/vld . . . $ 22 to 25, 29 and 30 . . .