Where it is inferred that there is a mistake apparent from the record, it means record must show that there has been an error and that error needed to be recitified. The reference to documents outside the records and the law is not permissible while applying section 154.

"MEANING OF ASSESSMENT YEAR" FOR CARRY FORWARD OF DEVELOPMENT REBATE AND DEDUCTION UNDER SECTION 80J".
Assessment year is a standard period of 12 months commencing on April 1 every year. It does not depend upon whether any assessee was assessed in a particular Assessment year or did not have any Assessment Year.
Where unabsorbed development Rebate under section 33 is required to be carried forward for eight assessment years that follow the Assessment year relevant to previous year in which development rebate was first granted, and the assessee did not have one assessment year in between because it changed accounting period in such a manner that there could not be carried forward to another year. In counting eight assessment year so lost would also be counted.
[Followed in - 252 ITR 697 (Guj)]

For claiming weighted deduction under section 35 (1)(b)(iv), the assessee should have (i) maintained a branch office, or agency outside India (ii) for promotion of sales outside India, of assessee's goods, services or facilities. When commission is paid outside India to the agents for procuring orders, then conditions laid down in the section satisfied. [Followed / relied in - 247 ITR 247 (Bom); 248 ITR 316 (J & K); 251 ITR 187 (Cal); 253 ITR 549 (SC)]

The assessee is engaged in the processing and export of seafoods. It earned import entitlement from Central Govt. under Export Promotion Scheme. It sold these import entitlements instead of using it for some imports. It earned income from such sale and claimed deduction under section 80HH in respect of sale proceeds of import entitlements. Hon'ble Supreme Court held that for getting relief u/s. 80HH income should be "derived from export". The word derive is followed by word 'from' and it means to "get, to trace from a source, arise from, originate in". the source of income in import entitlement and whose source is not the industrial undertaking but the Export promotion Scheme of Central Govt. There is no direct nexus between income and Industrial Undertaking. The enquiry for finding the source should stop the moment it is found. The source of income is import entitlement and not the Industial Undertaking.
[Relied/applied in 242 ITR 204 (Cal); 245 ITR 849 (Bom);]

Deduction under section 35C is available to any company engaged in the manufacture or processing of any article or thing which is made from or used as raw material any product of agriculture. This phrase "produce of agriculture" means not only the primary product grown in the field but also product obtained, by simple processing such as rice husk which is obtaining by processing of paddy. Thus, where a company manufactures animal feed by using rice husk, it satisfies section 35C. Rice husk or rice retain natural form as a result of dehusking of paddy and are covered by the term "Agriculture produce".

Under section 10(29) entire income of warehousing corporations are not exempt. Only those incomes which were derived from letting out of godowns or warehouses for storage, processing or facilitating the marketing of the commodities are exempt. If godowns or warehouses are let out for any other purpose or income is derived from any other source, then income is not exempt. Therefore, interest on FDRs earned by Warehouses are not exempt.

Factories of the assessee in Pakistan was agreed to be sold to one 'M'. Later agreement was modified in November 1962 intending that profit and loss arising from the operation of factories during the period subsequent to 30.9.62 shall in the event of completion of sale in accordance with the agreement would be to the account of 'M'. Sale was finally completed on 30.9.64. It was held that profit arising from the operation of the factories during the period from 1.10.62 to 30.9.63 and 1.10.63 to 30.9.64 would go to 'M' and can't be assessed in the hands of assessee, who though continued to be the owner and in possession og the factory. The income was transferred to 'M' by an overriding title, as per subsequent agreement in November 1962 to the purchaser.

As per Section 115J, where income computed in accordance with Income tax Act is less than 30% of book profit computed as per Part-II and Part-III of Schedule VI of Companies Act, then such book profit after suitably adjusting as per explanation to section 115J would be the income. As per section 205 of companies Act part losses or depreciation whichever is less are set off to arrive at book profit. Here loss would include depreciation also (i.e. loss does not mean pre-depreciation loss, but would mean business loss plus loss of the year not set off) Hence same set off, allowable under section 205 of companies Act would be allowed in computing book profit under section 115J . Thereafter, 30% of such book profit would be compared with income computed under Income tax Act.
[Followed in 239 ITR 862 (Gau); 243 ITR 519(Kar); 245 ITR 60 (Gau); 247 ITR 95 (Ker); 252 ITR 295 (MP)]

Assessee's father had pledged shares with the bank to take overdraft facilities. On his death the assessee inherited both the shares and liability (O.D) on which he was paying interest. He received dividend on those shares and claimed deduction of interest on O.D. from dividend income. It was finally held that asset (i.e the shares) was charged with the obligation to discharge the liability to pay interest on O.D. There was no transfer of dividend income by overriding title.

(i) There is no provision in the Income Tax Act that a compromise assessment could have been arrived at between the assessee and the CIT
(ii) One cannot infer from section 229(2), which provides for compounding of once offence, that a show cause notice is to be given or an opportunity be offered to compound the offence, before launching prosecution