TMI Blog2005 (9) TMI 257X X X X Extracts X X X X X X X X Extracts X X X X ..... the so-called provisional return, the assessee was not in a position to remove the defect within the time provided under s. 139(9). Apparently, the assessee has also not taken any positive step by bringing the deficiency in the return to the notice by moving an application seeking time to file the audited accounts so as to avail the benefit provided under the Act." 3. The original assessment in this case was completed under s. 144 on 7th Oct., 1991 which was set aside by the learned CIT(A) on 24th Jan., 1994 on the ground that no opportunity of being heard was given to the assessee. The brief facts of this ground are that the assessee furnished a provisional return of income on 29th Dec., 1989 at a loss of Rs. 3,34,87,490. The assessee did not submit audited accounts along with the return of income but the assessee submitted the tax audit report in Form 3CD marked as "provisional". This was done to make a compliance under s. 80 and under s. 44AB of the Act. Under s. 80, there is no such concept as provisional return. A return if is not in accordance in the prescribed manner then it is not (to) be treated as return and the assessee cannot (take) benefit of carry forward (of) loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the return filed by the assessee shall not be deemed to be invalid merely by reason of the provisional accounts and audit report, attached with the return of income when such return of income is in substance and in conformity with and according to the intent and purpose of this Act. Sec. 139(9) provides that AO when considers that return of income furnished by the assessee is defective, he may intimate the defects to the assessee and give an opportunity to rectify the defect within a period of 15 days from the date of such intimation or within such further period. No such defect was intimated by the AO to the assessee. Reliance is placed in the case of CIT vs. Garia Industries (P) Ltd. (1982) 31 CTR (Cal) 177: (1983) 140 ITR 636 (Cal), where return of loss filed in time without auditor's report and statement of accounts was treated as a valid return. Therefore, the return filed by the assessee on 29th Dec., 1989 is a valid return filed under s. 139(3) r/w s. 139(1). Once a return is filed under s. 139(3), return is deemed to have been filed under s. 139(1) and the assessee gets a benefit of filing the revised return under s. 139(5) of the Act. This view finds support from the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nace which was commenced in the year 1986. Since the furnace was creating trouble, the matter was taken upto the suppliers who had offered to supply extra equipment free of charge. Thereafter, the estimated cost of extra equipment was worked (out) to Rs. 13,91,500 and was treated as compensation. It is further stated that the supplier did not pay the compensation but opted to replace the defective equipment which they did. Hence, the company had to give up the claim of compensation subsequently and had to delete the aforesaid income of compensation. The AO did not accept the contention of the assessee and was of the view that it is an afterthought story and the assessee has not filed any letter of correspondence with the company. Therefore, the claim of the assessee was not accepted by the AO and deletion of Rs. 13,91,500 in the return filed on 15th Jan., 1991 was not allowed by the AO and accordingly treated the same as income of the assessee. 8. The learned CIT(A) deleted the said addition made by the AO with the reason that the AO has not been able to establish that the amount has arisen as income to the assessee and the submissions made by the assessee before the AO have not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount be decisive or conclusive in the matter. 11. The entry made by the assessee by crediting compensation account represents hypothetical income which did not materialize and was reversed by the assessee. Such entries cannot be brought to tax and only real income can be brought to tax. This view finds support in the case of CIT vs. Bokaro Steel Ltd. (1999) 151 CTR (SC) 276 : (1999) 236 ITR 315-323-324 (SC). In the circumstances, the addition made by the AO of Rs. 13,91.500 has rightly been deleted by the learned CIT(A) and we find no infirmity in the order of the learned CIT(A). Thus, this ground of the Revenue is dismissed. 12. The Department has raised the next issue in its ground No. (III) which reads asunder: "On the facts and in the circumstances of the case and in the absence of any positive evidence to substantiate assessee's claim, the learned CIT(A) erred in holding that 'it is also an admitted fact that the amount has not been received by the appellant during the year' and thereby deleting the addition of Rs. 38,67,117 which represented the export incentive added by the AO on the basis of assessee's own return." 13. The brief facts of this ground are that the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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