TMI Blog2011 (6) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... f law : A. Whether on the facts and in the circumstances of the case, the ITAT was justified in deleting the prima facie adjustment of Rs.9,00,000/- on account of provision for doubtful debt carried out by the Assessing Officer in the light of the explanation added to Section 36(1)(vii) by Finance Act, 2001 with retrospective effect from 1.4.1989 ? 2. Mr. Sonak, learned Counsel for the respondent no.1, submitted that the substantial question of law was framed at the time of admission without hearing the respondents and does not address the main issue involved in the case. According to learned Counsel, the substantial question of law may said to arise in the matter ought to have the following : Whether on the facts and in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ie adjustment is correct. 6. In appeal, the Income Tax Appellate Tribunal ( ITAT ) took a view that the findings of the Assessing Officer that the assessee's claim for provision of bad and doubtful debts is clearly outside the ambit of prima facie adjustment envisaged in Section 143(1)(a) of the Income Tax Act, 1961 and that the Assessing Officer did not have sufficient material to hold that the said claim was inadmissible. The ITAT held that under the provisions of Section 143(1)(a), the Assessing Officer is not entitled to allow or disallow the claim but can only make adjustment on a prima facie scrutiny of the return and the accompanying documents filed by the assessee. Section 143(1)(a) if read for the assessment year 1993-1994 whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that where adjustments are made under the first proviso, an intimation shall be sent to the assessee, notwithstanding that no tax or interest is found due from him after making the said adjustments . 7. Mr. Sonak, learned Counsel for respondent no.1, relied on the interpretation of the provision by the Division Bench of this Court in the case of Khatau Junkar Limited and another V/s K. S. Pathania and another, reported in 1992 (1) Bom. C.R. 550 wherein at para 7, this Court observed as follows : 7. On a plain reading of Section 143(1)(a) of the Act, therefore, it is clear that if on the basis of the return which is filed by the assessee, any tax or interest is found due after adjustments, as set out in the section, an intimation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an proceed to make a regular assessment. The other relevant provision of section 143 is sub-section (1-a) under which, where, after making the adjustments under section 143(1)(a), it is found that the total income exceeds the income declared in the return by any amount, the Assessing Officer shall further increase the amount of tax payable by an additional income tax calculated at the rate of twenty percent of the tax payable on such excess amount. This additional income tax shall be specified in the intimation which is to be sent under section 143(1)(a). 8. We find that applying the ratio of the said decision, the order of the ITAT in appeal must be upheld. Indeed, the Assessing Officer has disallowed the claim for deduction made by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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