TMI Blog2002 (2) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... ment for the claim made in IT return. The CIT(A) upheld the order of the AO and held that the AO was entitled to make adjustment/disallowance under s. 143(1)(a) for inadmissible claim in the absence of evidence. 2. The learned authorised representative submitted that the learned CIT(A) erred in holding that the provision of s. 143(1)(a) permits the AO to make adjustment in respect of assessee s claim regarding sales-tax, gratuity and depreciation. He explained the extent and ambit of the prima facie adjustments to be made under the first proviso to s. 143(1)(a) and empowers for the following adjustments: (i) only apparent arithmetical errors in the return, accounts or documents, accompanying the return, (ii) loss carried forward, dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 (Del). If proof in support of the claim was not furnished by the assessee, then for the lack of proof, no disallowance or an adjustment could be made. The only option which was open to the AO, in such a case, was that he could require the assessee to furnish proof in which case he would presumably have to issue notice under s. 143(2). The learned authorised representative also explained the merits of the case as under: (a) Disallowance of sales-tax Rs. 2,097: The AO erred in disalowing the sales-tax demand of Rs. 2,097, though the necessary details had already been submitted along with rectification application. The addition on sales-tax a/c, cannot be made for the reasons that it was outstanding and proof of payment was not attached al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee would not be able to produce documents even in a rectification application under s. 154. Thus, it could not be said that disallowance could be made under the first proviso to s. 143(1)(a) for lack of proof or inadequacy of evidence. One could not read into s. 143(1)(a) more than what was provided, which would result in the section becoming arbitrary or unreasonable. Similarly while making prima facie adjustments under s. 143(1)(a) depreciation cannot be disallowed for lack of particulars of assets. We agree with the reasons given by the learned authorised representative. Therefore, the disallowance of sales-tax, and disallowance of depreciation made by the AO and sustained by the CIT(A) are hereby deleted. The AO is directed to al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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