TMI Blog1996 (8) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in law in holding that the action of the Assessing Officer in making various adjustments under section 143(1)(a) is patently erroneous and thereby deleting these additions made as a result of the adjustments ? (2) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that section 143(1A)(a) will not apply to cases where loss declared by the assessee is merely reduced as a result of adjustment under section 143(1)(a) but does not result in income and thereby cancelling the order levying additional tax ? " The brief facts of the case are that the non-applicant/assessee is a public ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 30,590 paid as self-assessment tax and Rs. 97,950 as tax deducted at source. Thus, out of the claim of Rs. 1,28,505 an amount of Rs. 30,588 was not allowed. The assessee filed an application under section 154 of the Act for rectification before the Assessing Officer. It was pointed out that the amount of cash compensatory support was, though treated by the assessee as capital receipt, credited to the sales account and therefore, was already included in the net profit shown in the profit and loss account. The Assessing Officer accepted this stand of the assessee and deleted the addition of the said amount and accepted the returned income at Rs. 2,73,051 under section 115J of the Act being 30 per cent. of Rs. 9,10,173. He was, however, of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exure "C" is the copy of the order. Aggrieved by the order of the Tribunal, on an application by the Department under section 256(1) of the Act, the case was referred for the opinion of this court with regard to the questions as indicated above. We have heard Shri Vivek Saran, learned counsel for the applicant, and Shri Saboo, learned counsel for the non-applicant. Shri Vivek Saran, learned counsel for the applicant, contended that the Tribunal has committed an error in deleting all the adjustments considered by the Assessing Officer and the Commissioner of Income-tax (Appeals) under section 143(1)(a) of the Act and also committed error in holding that the case of the assessee falls within clause (i) of the Explanation to section 143(1A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsibility on the authority to act in a most reasonable manner. Performance of an authority in such a situation should not be arbitrary or capricious. " On the aforesaid reasons, the Tribunal also held that the case of the assessee falls within clause (i) of the Explanation to section 143(1A)(a) of the Act. Adjustments made by the Assessing Officer do not exceed the total income since it is a return of loss far exceeding the adjustments made. No adjustments and no additional income-tax, therefore, can be levied. In our considered opinion, the order of the Tribunal is based on proper appreciation of the facts and law applicable to the case on hand. The order of the Tribunal in holding that the action of the Assessing Officer in making va ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
