Dipak Kumar Sen, J.
1. M/s. Russel Properties Pvt. Ltd., the assessee, sold a building and land together with lifts, transformers, tubewells and other assets therein in the assessment year 1973-74. The original cost of the said assets was Rs. 16,13,596 for the land and building and that of lifts, transformers and tube-wells was Rs. 2,15,763.
2. The consideration for the sale was Rs. 18,00,000.
3. At the time of assessment, the Income-tax Officer found that the written down value of the lifts, transformers and tubewells in the relevant assessment year was Rs. 1,09,555.
4. The net gain in the transaction, Rs. 18,00,000 minus Rs. 17,23,151, i.e., Rs. 76,849, was allocated by the Income-tax Officer on a pro rata basis as partly related to land and building and partly related to the other assets. On that basis, capital gains relating to land and building was computed at Rs. 71,919 and business profits under Section 41(2) of the Income-tax Act, 1961, relating to depreciable assets were calculated at Rs. 4,930.
5. After the original assessment was completed, the Income-tax Officer later took a view that the allocation of the total gain had not been made correctly. He, therefore, rectified what he thought to be a mistake under Section 154 of the Income-tax Act, 1961. Deducting the original cost of land and building including the depreciable assets from the sale consideration received, he computed that there was a profit of Rs. 29,359. He held that as the original cost of the depreciable assets was Rs. 2,15,963 and the written down value was Rs. 1,09,555, there was a profit under Section 41(2) which was computed at Rs. 1,06,208.
6. On appeal, it was held by the Commissioner of Income-tax (Appeals) that the rectification was without jurisdiction and the same was cancelled. The order of the Commissioner of Income-tax (Appeals) was upheld by the Income-tax Appellate Tribunal.
7. The Revenue now seeks a direction from this court that the following question be referred for the opinion of this court as a question of law arising out of the order of the Tribunal :
'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that there was no mistake apparent from the record within the meaning of Section 154 of the Income-tax Act in the original assessment order passed by the Income-tax Officer and in that view in cancelling the order under Section 154 of the Income-tax Act passed by the Income-tax Officer rectifying such mistake ?'
8. It appears that following the decision of the Supreme Court in CIT v. Mugneeram Bangur & Co., : 57ITR299(SC) , the Commissioner of Income-tax (Appeals) proceeded on the basis that where the business is sold as a whole as a going concern, the question of separate computation of the value of vario us assets and stocks in trade does not arise at all but only capital gain or loss has to be computed. Instructions on the above lines had also been issued by the Central Board of Direct Taxes in its circular.
9. The Tribunal has found that the original calculation by the Income-tax Officer in its assessment order was correct.
10. It appears to us that the so-called mistake which has been sought to be corrected by the Income-tax Officer is not one apparent from records. The subsequent computation was made on the basis of a different view taken by the Income-tax Officer on the same facts.
11. We also note that in the light of the decision of the Supreme Court in CIT v. Mugneeram Bangur & Co. : 57ITR299(SC) and the circulars issued by the Board of Direct Taxes following the said decision, the rectification itself has resulted in further error. It is not the object of Section 154 to perpetrate errors in this manner, vide ITO v. Arvind N. Mafatlal, : 45ITR271(SC) .
12. For the reasons as aforesaid, we agree with the order of the Tribunal rejecting the application of the Revenue under Section 256(1) of the Income-tax Act, 1961.
13. The rule nisi is discharged and the application is dismissed.
14. There will be no order as to costs.
Mukul Gopal Mukherji, J.
15. I agree.