JCIT(OSD), CIRCLE -10(1), DELHI V. M/S INDIAN INFRASTRUCTURE FINANCE COMPANY LIMITED, DELHI

ITA 1251/DEL/2025

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The case involves an appeal by the Revenue against the order of the CIT(A) which had deleted the addition made by the Assessing Officer on recomputation of allowable deductions under sections 36(1)(viia)(c) and 36(1)(viii) of the Income Tax Act, 1961. The Revenue contended that the deductions should be computed after considering the deductions under section 36(1)(viii) first, contrary to the CIT(A)'s decision which followed a different interpretation as per the ITAT Delhi's decision in the case of Tourism Finance Corporation of India Ltd. The Tribunal, referencing the decisions in similar cases, concluded that the issue was debatable and not a clear mistake apparent from the record, thus not suitable for rectification under section 154.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 833888 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2017-2018
• Appeal Filed On: 28-02-2025
• Other Referred Cases: Rural Electrification Corporation Ltd. vs. Addl. CIT, Tourism Finance Corporation of India Ltd.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANKUSH KALRA
• Assessee Lawyers: SHERY GUPTA
• Keywords: Rectification of order
• Section: 143(3); 154

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘E’ BENCH, NEW DELHI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER, AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 1251/DEL/2025 [A.Y. 2017-18] The J.C.I.T [OSD] Vs. M/s India Infrastructure Finance Circle -10(1) Company Limited New Delhi 5th Floor, Block -2, Plate A & B NBCC Towers, Ring Road, East Kidwai Nagar, South West Delhi. New Delhi PAN AABCI 4645 K (Applicant) (Respondent) Assessee By : Shri Shery Gupta, CA Department By : Ms. Ankush Kalra, Sr. DR Date of Hearing : 19.11.2025 Date of Pronouncement : 04.02.2026 ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:- This appeal by the Revenue is preferred against the order of the ld. NFAC, Delhi dated 03.12.2024 pertaining to A.Y. 2017-18. 2. The grievances raised by the Revenue read as under: \"1. Whether on facts & in law, the Ld. CIT(A) is correct in deleting the addition made on recomputation of allowable deduction u/s Printed from counselvise.com ITA No. 1251/DEL/2025 [A.Y. 2017-18] The JCIT V/s India Infrastructure Finance Page 2 of 6 36(1)(viia)(c) and 36(1)(viii) of the Act aggregating to Rs. 12,16,83,000/- without appreciating the facts that the said deduction were computed in accordance with the judgement of Hon'ble ITAT Delhi in the case of Rural electrification Corporation Ltd. vs. Addl. CIT. Range- 15 Delhi (2009) 34 SOT? 2. Whether deduction available to assessee u/s 36(1)(viia)(c) has to be reduced from profits derived from business providing long-term finance computed under head \"profit and gains or business or profession\" for the purpose of computing deduction available u/s 36(1)(viii) of the Act. 3. That the department craves to add or amend the grounds of appeal before Hon'ble ITAT is finally heard or disposed of.\" 3. Brief facts of the case are that in this case, order u/s 143(3) of the Income-tax Act, 1961 [the Act, for short] was passed on 17.12.2019. Subsequently, the Assessing Officer passed order u/s 154 r.w.s. 143(3) of the Act in which the Assessing Officer held that deduction u/s 36(1)(viii) should have been deducted before computing deduction u/s. 36(1)(viia)(c) of the Act. Accordingly, the Assessing Officer vide order u/s 154 rws 143(3) dated 31.05.2023 reduced the claim of deduction u/s 36(1)(viia)(c) and 36(1)(viii) by Rs. 12.16 crores. 4. The assessee went in appeal before the Id. CIT(A) against the said rectification order of the Assessing Officer. After considering the facts and circumstances of the case, the ld. CIT(A) held as under: Printed from counselvise.com ITA No. 1251/DEL/2025 [A.Y. 2017-18] The JCIT V/s India Infrastructure Finance Page 3 of 6 \"7.1 The appellant has submitted that it has made claim of deduction u/s. 36(1)(viia)(c) and 36(1)(viii) as per the decision of the jurisdictional ITAT of Delhi in the case of Tourism Finance Corpn. Of India Ltd. 2. ITR (TRIB.) 1 (Delhi). The appellant has submitted the computation of deductions made by it which is already reproduced in the submission of the appellant and the same is again reproduced as under:- \"However your honour, vide the abovementioned Notice, it has been alleged that the deduction u/s 36(1)(viia)(c) of the Act to the tune of Rs. 43,08,54,038/- has been computed on the total income before making deduction u/s 36(1)(viii) of the Act, the same being against the provisions of section 36(1)(viia)(c) of the Act which stipulates calculation of total income for the purpose of the said section before making any deduction under the said clause and chapter VI-A only. Therefore, as a natural corollary, the total income so computed must be done so after taking into account the deduction claimed u/s 36(1)(viii) of the Act, if any. Pursuantly, your honour proposes to subtract the said deduction claimed u/s 36(1) (viii) of the Act and recompute the total income on which deduction u/s 36(1)(viia) (c) of the Act may be claimed, the same coming out to be Rs. 4298.81 lakhs. In this regards, it is submitted before your honour that the said allegation is factually incorrect and invalid on account of the fact that the amount claimed under the said section has been computed @ 5% of the total income arrived at after taking into account, the deduction u/s 36(1(viii) of the Act claimed during Printed from counselvise.com ITA No. 1251/DEL/2025 [A.Y. 2017-18] The JCIT V/s India Infrastructure Finance Page 4 of 6 the year. In this regards, the computation of deduction u/s 36(1) (viia) (c) of the Act is as under: Particulars Amount (Rs.) Total Income as per ITR (A) 1033,28,69,925/- Less: Deduction claimed u/s 36(1) (viii) of the Act (B) 171,57,89,165/- Total Income before allowing deduction under section 36(1)(viia) (c) of the Act (C) = (A) (B) 861,70,80,760/- Allowable deduction u/s 36(1) (viia) (c) of the Act (5% of income before allowing deduction under section 36(1)(viia) (c) of the Act) i.e. 5% of (C) 43,08,54,038/- Accordingly, your honour will acknowledge and appreciate the fact that the deduction claimed by the assesse u/s 36(1)(viia) (c) of the Act has been computed @ 5% of the Total income and such total income has been arrived after making the due deduction u/s 36(1) (viii) of the Act.\" 7.2 Hence, it is seen that deduction u/s. 36(1)(viia)(c) and 36(1) (viii) have been claimed by the appellant as per the decision of the Hon'ble ITAT, Delhi in the case of Tourism Finance Corpn. Of India Ltd. …… 5. Aggrieved, the Revenue is in appeal before us. The ld DR placed his reliance on the decision of ITAT Delhi in the case of Rural Electrification Corpn Ltd (2009) 34 SOT 159(Delhi). 6. Per contra, the ld AR relied on the CIT(A) order. The ld AR further argued that the issue of deduction u/s 36(1)(viii) and u/s. 36(1)(viia)(c) Printed from counselvise.com ITA No. 1251/DEL/2025 [A.Y. 2017-18] The JCIT V/s India Infrastructure Finance Page 5 of 6 of the Act is highly debatable and beyond the scope of section 154 of the Act as the same is not mistake apparent from record. 7. We have heard the rival submissions and have perused the relevant material on record. We find that on the issue of deduction u/s 36(1) (viia)(c) and 36(1)(viii) of the Act, the Revenue has placed reliance on the decision of the co-ordinate bench in the case of Rural Electrification Corpn. Ltd. V. Additional Commissioner of Income- tax (supra) whereas the CIT(A) has followed Delhi ITAT in the case of Tourism Finance Corpn. Of India Ltd (supra). We are therefore of the considered view that the calculation of deduction u/s 36(1)(viia)(c) and 36(1)(viii) of the Act is an issue which is highly debatable and therefore the same cannot be categorized as a mistake apparent from record. We, therefore, hold that the calculation for disallowance of the deduction u/s 36(1)(viia)(c) and 36(1)(viii) of the Act, can not be resorted under the provision of section 154 of the Act. We accordingly direct the AO to delete the addition made on re-computation of allowable deduction u/s 36(1)(viia)(c) and 36(1)(viii) of the Act. Ground is dismissed. 8. In the result, the appeal of the Revenue is dismissed. Printed from counselvise.com ITA No. 1251/DEL/2025 [A.Y. 2017-18] The JCIT V/s India Infrastructure Finance Page 6 of 6 The order is pronounced in the open court on 04.02.2026. Sd/- Sd/- [CHALLA NAGENDRA PRASAD] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 4th February, 2026 VL/ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) Asst. Registrar, 5. DR ITAT, New Delhi Sn No. PARTICULARS DATES 1. Date of dictation of Tribunal Order 2. Date on which the typed draft order is placed before the Dictating Member 3. Date on which the typed draft order is placed before the other Member [in case of DB] 4. Date on which the approved draft order comes to the Sr. P.S./P.S. 5. Date on which the fair Order is placed before the Dictating Member for sign 6. Date on which the fair order is placed before the other Member for sign [in case of DB] 7. Date on which the Order comes back to the Sr. P.S./P.S for uploading on ITAT website 8. Date of uploading, inf not, reason for not uploading 9. Date on which the file goes to the Bench Clerk 10. Date on which the file goes for Xerox 11. Date on which the file goes for endorsement 12. The date on which the file goes to the Superintendent for checking 13. Date on which the file goes to the Assistant Registrar for signature on the order 14. Date on which the file goes to the dispatch section for dispatch the Tribunal order 15. Date of Dispatch of the Order 16. Date on which the file goes to the Record Room after dispatch the order Printed from counselvise.com "