AJAY BHATIA,KANPUR vs. ASSESSING OFFICER 2(2)(5) ETAWAH, ETAWAH

This assessee’s appeal for assessment year 2014-15 arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2024-25/1064749066(1) dated 09.05.2024 involving proceedings under section 154 of the Income- tax Act, 1961 (hereinafter referred to as ‘the Act’).

Heard both the parties. Case file perused.

It emerges during the course of hearing that both the learned lower authorities have taken recourse to section 154 rectification for the purposes of disallowing the assessee’s revenue expenditure representing interest and remuneration payments etc. amounting to Rs.1,56,552/-; as not allowable under section 37(1) of the Act, in the Assessing Officer’s order dated 23rd of January, 2019, as upheld in the lower appellate discussion.

Faced with this situation and having given our thoughtful consideration to vehement rival submissions reiterating both the parties’ respective stands, we are of the considered view that such a recourse to section 154 rectification for the purpose of disallowance of any expenditure claim requiring detailed inquiries; is not sustainable in law in light of T. S. Balaram ITO v. Volkart Bros (1971) 82 ITR 50 (SC). We accordingly reverse the learned lower authorities’ impugned rectification order to this effect for the very precise reason. Ordered accordingly. 5. This assessee’s appeal is allowed. Order pronounced in the open court on 6th February, 2025 Sd/- Sd/- (M. BALAGANESH) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 6th February, 2025. 2 | P a g e RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra