1.  COMMISSIONER OF INCOME TAX Vs. M/S SOFTLAB PVT LTD, TAX CASE (A) NO. 95 OF 2008, DATED: APRIL 27, 2011 MADRAS HIGH COURT

Whether when the computers are not shifted out of the assessee's premises after the sale as lease agreement was signed, it can be construed under the circumstances that the sale is not complete without transfer of ownership as per the TP Act.

This aspect of the case can also be viewed from another angle. As per Section 54 of the T.P Act, "Sale" is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. Admittedly, in the present case, the ingredients spelled out in the aforesaid Section are not found. Nowhere is it brought to the notice of Court that the computers were transferred from the assessee to the purchaser, but, on the other hand, the assessee brought the computers to his premises by virtue of the lease entered into between the assessee and the purchaser. The computers are intact in the premises of the assessee, who is a seller. Therefore, the sale is not complete as defined u/s 54 of the T.P Act. The order of CIT(A) and of the Tribunal set aside.

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2.  COMMISSIONER OF INCOME TAX, CHENNAI Vs. HARITHA SEATING SYSTEMS LTD, CHENNAI, Tax Case (Appeal) No. 106 of 2008, Dated: April 9, 2011 HIGH COURT OF MADRAS

Whether, the labour charges, miscellaneous income and sale of materials are part of business income for the purpose of deduction u/s 80HH - Whether the same can be decided in rectification proceedings u/s 154.

If one examines the scheme of the Act, as it stood at the material time, one finds a clear dichotomy between Section 154 and Section 147. It is well recognized law that any erroneous assessment cannot be the subject matter for rectification u/s 154. A debatable point cannot be a reason for rectification u/s 154. Further, in order to invoke Section 154 for rectification of the mistake, the mistake sought to be rectified should be a mistake apparent on the record and must be an obvious and patent mistake and not something which could be established by long drawn process of reasoning on the point in issue on which there may be conceivably two opinions. Therefore, merely because an objection was taken out by the Revenue Audit, the officer, who succeeded the previous officer should not have undertaken the exercise of revising the order .Therefore, the revised order passed by the AO is in violation of the order passed by the CIT. In light of the decision of the Supreme Court no question of law arises.

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