TMI Blog1994 (6) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... was worked out and claimed at Rs. 1,30,09,312 by multiplying the figure of Rs. 4,19,80,359 by Rs. 29,80,37,117 and dividing the same by Rs. 96,17,49,925. This was done on the basis of tax audit report. 4. The Assessing Officer in his intimation under section 143(1)(a) of the Act, however, calculated deduction under section 80HHC at Rs. 57,69,914. This was done by making primarily two adjustments. In the first instance, the total turnover was computed at Rs. 1,00,31,70,771 as against the assessee's figure of Rs. 96,17,49,925. The main reason for the difference in the figure of total turnover was that the Assessing Officer as per Annexure-A to the intimation, included items like steel subsidy, rubber subsidy, sale of scrap, miscellaneous income, grant in export marketing fund, rent received and trade discount as part of the total turnover. 5. The other ground for the difference in the deduction under section 80HHC was that the Assessing Officer arrived at a negative figure of Rs. 67,00,710 by multiplying the profit of business on total export turnover and dividing it by total turnover. The other figure worked out by the Assessing Officer was 90% of the export incentive multiplied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es should be rectified by way of adjustments and not those which could be established by a long-drawn out process of reasoning on points on which there could conceivably be two opinions. 11. Reliance was also placed on the ratio of the Tribunal's decision in the case of New United Motors v. Asstt. CIT [1993] 45 ITD 302 (Delhi) for the proposition that the prima facie disallowance could not be made simply because there was no evidence of a particular claim. Reliance was also placed on the Rajasthan High Court decision in the case of JKS Employees' Welfare Fund v. ITO [1993] 199 ITR 765 at 769 for the proposition that the object of summary assessment proceedings as contemplated under section 143(1)(a) is not only to reduce the work of the Department but is also to minimise the litigation and create confidence in taxpayers for submitting true and correct returns. In the said judgment, it was held that if it appears that the return submitted by the assessee cannot be accepted for purposes of taking action under section 143(1)(a), then the powers of the Income-tax Officer are not fettered and he can proceed to finalise the assessment after giving an opportunity to the assessee in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 205(1) of the Companies Act. Reliance was also placed on the decision of the Jaipur Bench of the Tribunal in the case of Vijay Tiles (P.) Ltd. v. ITO [1993] 114 Taxation 81 for the proposition that the Assessing Officer was not justifled in making adjustments to the returned loss of the assessee as they were of debatable or controversial nature. Reliance was also placed on the decision of the Ahmedabad Bench of the Tribunal in the case of Fag Precision Bearing Ltd. v. Dy. CIT [1993] 115 CTR (Trib.) (Ahd.) 501 for the proposition that provisions of section 115J being capable of more than one interpretation as regards treatment of unabsorbed investment allowance etc., primafacie adjustment in regard to unabsorbed investment allowance by recourse to proviso to section 143(1)(a) cannot be made. 15. Reliance was also placed on the decision of the Indore Bench of the Tribunal in the case of Etcher Motors Ltd. v. Dy. CIT [1992] 40 ITD 595 for the proposition that the adjustments to be made under section 143(1)(a) should be made only when the error in the returned income is apparent on the face of record and if the allowability or disallowability of any item of claim is debatable, no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed counsel for the assessee, the Central Board of Direct Taxes and Chief Commissioners of Income-tax in various instructions have laid down that only those adjustments can be made under section 143(1)(a) which are self-evident, glaring and apparent from record. In other words, any issue which is of a debatable nature and about which there can conceivably be more than one opinion, cannot be made a subject-matter of prima facie adjustments under section 143(1)(a) of the Act. The various authorities cited by the learned counsel for the assessee also go to show that a debatable issue cannot form the basis of adjustments under section 143(1)(a) of the Act. 19. As regards the total turnover, the first appellate authority has already held that rubber subsidy and steel subsidy and grant under the export marketing fund cannot be a part of the total turnover. The term 'turnover' has not been defined in section 80HHC. In our opinion, miscellaneous income, rent received and trading discount received may also not be part of the total turnover of the assessee. At any rate, this issue is debatable. We, therefore, hold that the total turnover shown by the assessee is by and large correct and tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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