9911796707
TMI Blog2006 (6) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... orate guarantee obligation' amounting to Rs. 18,67,21,730 does not come within the purview of 'prima facie adjustment' as laid down under section 143(1)(a) of the Income-tax Act?" The assessee is a company. The assessment year involved is 1994-95. While processing the return of income under section 143(1)(a), the Assessing Officer found from the return and the accompanying documents that a sum of Rs. 18,67,21,730 representing "corporate guarantee obligation" had not been debited to the profit and loss account. It was claimed as a revenue deduction in the statement of consolidation of return of income. According to the Assessing Officer, the above was not a prima facie admissible deduction. He disallowed the same. An appeal was filed. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computation of income." Aggrieved by the disallowance of this item, an unsuccessful appeal was filed to the appellate authority. Thereafter, the matter was taken to the Tribunal and the Tribunal has chosen to accept the case of the assessee in the impugned order. A reading of section 143 would show that the adjustment is permissible under three circumstances: "(i) any arithmetical errors in the return, accounts or documents accompanying it shall be rectified; (ii) any loss carried forward, deduction, allowance or relief, which, on the basis of the information available in such return, accounts or documents, is prima facie admissible but which is not claimed in the return, shall be allowed; (iii) any loss carried forward, deduction, all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the appellate officer, rightly, in our view, has chosen to say that a debatable issue cannot be decided under section 143(1)(a) of the Act. What is required to be seen is a prima facie consideration for the purpose of allowance or disallowance depending upon the material placed on record. Admittedly, in the case on hand, an agreement is available and so also guarantee obligation as to whether the guarantee can be enforced, etc., is at the stage of final hearing and it cannot be decided at the first sight or at the first appearance as has been done in the case on hand. We are satisfied that on the facts of this case, a prima facie case as such was made out as rightly ruled by the Tribunal. The Tribunal's findings in the given circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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