TMI Blog2004 (7) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... The judgment of the court was delivered by N.K. Sud J. - The assessee has filed this appeal under section 260A of the Income-tax Act, 1961 (for short the "Act") against the order of the Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh, (for short the "Tribunal") dated April 29, 1999 dismissing his appeal and upholding the action of the Assessing Officer adding a sum of Rs. 1,06,240 to the total income of the assessee as capital gain by way of an adjustment under section 143(1)(a) of the Act. The brief facts of the case are that the assessee filed his return for assessment year 1989-90 on June 29, 1989 showing an income of Rs. 26,450. Along with the return, the statement of capital gain was attached showing net realisation on sale of a plot at Anand Vihar, New Delhi, at Rs. 4,95,000 and after deducting an initial cost of Rs. 23,000, capital gain was shown at Rs. 4,72,000. The assessee had further claimed the benefit under section 54F of the Act showing investment in purchase of property No. 84, Sector 9, Faridabad, on December 6,1988 for Rs. 1,43,607. It was further explained that the balance amount of Rs. 3,28,400 (Rs. 4,72,000-1,43,600) had been deposited in the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch head of income should be made separately. 2. Give brief reasons for adjustments made wherever necessary. Rs. Net consideration of plot 4,75,000 Less : Cost of acquisition 23,000 4,72,000 Less : Amount utilised in new asset (cost of plot and part construction thereon before date of filing return, i.e., 29-6-1989) 2,49,520 ------------- 2,22,480 Capital gain Deduction under section 48(9) (i) Basic 10,000 (ii) 50% of the balance amount of Rs. 2,22,480 1,06,240 --------- ------------- 1,16,240 1,16,240 Net capital gain to be included in total income 1,06,240 M.L. Sabharwal, Income-tax Officer, Jind. The assessee filed an application under section 154 of the Act objecting to the adjustment made by the Assessing Officer. It was claimed that the addition of Rs. 1,06,240 could not be made as a prima facie adjustment under section 143(1)(a). The Assessing Officer vide his order dated January 29, 1990 rejected the assessee's application holding that the law clearly stipulated that for claiming the benefit under section 54F, the amount of consideration had to be deposited in the Capital Gains Account Scheme which had not been done by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that disallowance of relief claimed in the return is only permissible, if on the basis of information available in such return, it is found to be prima facie inadmissible. In support of his contention, he placed heavy reliance on Khatau Junkar Ltd. v. K.S. Pathania [1992] 196 ITR 55 (Bom); S.R.F. Charitable Trust v. Union of India [1992] 193 ITR 95 (Delhi); Samtel Colour Ltd. v. Union of India [2002] 258 ITR 1 (Delhi) and R.K. Gyankishore Singh v. Asst. CIT [2003] 261 ITR 107 (Gauhati). Learned counsel pointed out that from the facts as noticed by the Tribunal, it is evident that from the documents filed with the return, it was not clear as to what was the nature of account No. 9248 in which the unutilised amount of sale price of the plot had been deposited. This is also evident from the fact that the Assessing Officer needed to verify it by issuing a letter dated September 20, 1989 subsequent to the filing of the return. He further pointed out that although this letter has been labelled as deficiency letter under section 139(9) of the Act, but it was, in fact, not so as it does not fall within the parameters of the said provision. It was simply a letter seeking certain furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sum so payable, and such intimation shall be deemed to be a notice of demand issued under section 156 and all the provisions of this Act shall apply accordingly; and (ii) if any refund is due on the basis of such return, it shall be granted to the assessee: Provided that in computing the tax or interest payable by, or refundable to the assessee, the following adjustments shall be made in the income or loss declared in the return, namely: - (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 return, shall be allowed; (iii) any loss carried forward, deduction, allowance or relief claimed in the return, which, on the basis of the information available in such return, accounts or documents is prima facie inadmissible, shall be disallowed." In the instant case, it is clause (iii) of the proviso which was sought to be applied by the Income-tax Officer. The said clause clearly provides that the Income-tax Officer can make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he balance amount of Rs. 3,28,400 in account No. 9248 in the Punjab National Bank, Faridabad. However, while making the adjustment, the amount utilised in new assets on account of cost of the plot and part construction thereon before the date of filing of the return, has been deducted at Rs. 2,42,520. We are also in agreement with counsel for the appellant that the information sought by the Assessing Officer vide letter dated September 20, 1989 about the nature of account No. 9248 with the Punjab National Bank at Faridabad, did not fall within the parameters of section 139(9) of the Act. Sub-section (9) of section 139, as it existed on April 1, 1989, reads as under: "Where the Assessing Officer considers that the return of income furnished by the assessee is defective, he may intimate the defect to the assessee and give him an opportunity to rectify the defect within a period of fifteen days from the date of such intimation or within such further period which, on an application made in this behalf, the Assessing Officer may, in his discretion, allow and if the defect is not rectified within the said period of fifteen days or, as the case may be, the further period so allowed, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6) also the report under that section; (f) where regular books of account are not maintained by the assessee, the return is accompanied by a statement indicating the amounts of turnover or, as the case may be, gross receipts, gross profits, expenses and net profit of the business or profession and the basis on which such amounts have been computed, and also disclosing the amounts of total sundry debtors, sundry creditors, stock-in-trade and cash balance as at the end of the previous year." A perusal of the above clearly shows that a notice under this section can only be issued if the Income-tax Officer considers the return of income furnished by the assessee as defective. The Explanation to this sub-section lists the circumstances under which a return can be treated as defective. In other words, a return can be treated as defective only if it falls in one or more of clauses (a) to (f) of the Explanation. Thus it is clear that failure to give particulars of the bank account for the purposes of making a claim under section 54F is not a case for regarding a return as defective. Consequently, the Assessing Officer could not have issued any deficiency letter under section 139(9). Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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