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2021 (7) TMI 54 - AT - Income TaxIntimation passed u/s 143 (1) - adjustment made in intimation u/s 143 (1)(a) - Disallowance made on account of payment of employees contribution to PF - HELD THAT:- On careful reading of the communication of proposed adjustment made u/s 143 (1) (a) which states that the return of income filed by the assessee contains the errors, incorrect claims, inconsistency which attracts adjustment as specified u/s 143 (1) (a) - On careful reading of the provisions of Section 143 (1) of the act we find that it describes a manner of computation of the total income or loss as per the return of income filed by the assessee. Both the adjustment made by the centralised processing centre, it is stated that assessee has made an incorrect claim. Therefore, centralized processing centre has invoked clause 143 (1) (a) (ii) of the act. Thus according to the centralized processing centre the claim of the assessee of deduction of deposit of employees provident fund contribution to the credit of the employees’ account though beyond the due date described under the respective provident fund act but before the due date of the filing of the return of income is an incorrect claim. We find that the claim of the assessee is supported by the decision of the Honourable jurisdictional High Court and hence it cannot be said to be an incorrect claim. With respect to the second adjustments was merely an error of grouping of an adjustment of income shown in the annual accounts of the assessee for arriving at correct taxable income. It is not the case of the centralized processing centre that income has been incorrectly computed by assessee. Therefore, both the adjustment made by the centralized processing centre for which assessee disagreed and with respect to the disallowance u/s 36 (1) (va) supported it with several judicial precedents of the jurisdictional honourable High Court as well as the honourable Supreme Court making it clearly beyond the purview of an incorrect claim. Profit on sale of assets as per books of accounts - Adjustment proposed is merely an error of grouping which does not make any impact on the total income. The adjustment made by the centralized processing centre has been incorrectly made resulting in double addition - Thus, both the adjustment proposed by the centralized processing centre are not sustainable. The order of the learned CIT – A is also not sustainable as he directed learned assessing officer to examine the claim of the assessee. The mandate before the CIT – A was only to see whether the above adjustment is in accordance with the law or not. Had it been the issue of examination, the case of the assessee would have been picked up for scrutiny. In view of this, we direct the learned assessing officer to delete both the above adjustment made in intimation u/s 143 (1)(a) of the Act. - Decided in favour of assessee.
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