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The J & K High Court in the case of Commissioner of Income-tax Vs. Agya Wanti (2001) 248ITR641 held that if the rectification was made at a time when the issue was debatable, it cannot be supported by reference to the Supreme Court’s decision settling the issue, which was rendered after the rectification. In this case in the return filed, the assessee did not claim depreciation on assets used for the purpose of his business. The income was assessed based on the return filed. Later, the Assessing Officer rectified the order under section 154 as he found that the depreciation was not allowed even though the particulars were available.

The P& H High Court in a sharp contrast in the case of CIT v. Smt. Aruna Luthra(2001) 118TAX932 held that the power u/s 154 can be invoked even when an issue is decided by the jurisdictional High Court or a superior Court after an order had been passed.

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