TMI Blog2003 (4) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... in I.T.A. No. 75/Coch. of 1993. The assessment year is 1991-92, the relevant accounting period ended March 31, 1991. For the assessment year 1991-92, the assessee filed a return on December 27, 1991, disclosing a total income/loss of Rs. 2,74,33,870. The Assessing Officer processed the same under section 143(1)(a) of the Act and sent an intimation dated January 17, 1992 (annexure A). In the said intimation, the Assessing Officer had made a prima facie adjustment and brought down the loss to Rs. 2,48,40,672. The Assessing Officer also levied additional tax of Rs. 2,38,574 under section 143(1A) of the Act. The details of the adjustment are given in the explanatory sheet. The enclosed statement shows that the assessee had claimed depreciation on block assets of Rs. 1,35,95,225 whereas the admissible deduction was only 75 per cent. of the normal depreciation of Rs.1,10,02,023 for the year 1991-92. Thus the excess claim of depreciation came to Rs. 25,93,202. It is in view of the above that additional tax is levied under section 143(1A). The fact that by virtue of the amendment made to the provisions regarding depreciation the assessee is entitled to get a deduction of only 75 per cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerned with the validity of the amended provisions of section 143(1A) made by the Finance Act, 1993, with retrospective effect from April 1, 1989. The senior counsel submitted that it is in the above context this court held that the provision for levy of additional tax even where the net result is a loss after carrying out adjustment is intended to prevent evasion of tax and the amendment of section 143(1A) levying additional tax with retrospective effect from April 1, 1989, does not violate articles 14 and 265 of the Constitution. The senior counsel, however, submits that those two decisions have no application to the facts of the present case where the levy of additional tax under section 143(1A) was not on account of any reduction in the loss as a result of the prima facie adjustment made under section 143(1)(a) of the Act. The senior counsel submitted that, as already observed by this court in the abovementioned two cases, section 143(1A) was inserted only to prevent evasion of tax and therefore the additional tax under the said section can be levied only where as a result of the prima facie adjustment the tax liability has been increased. The senior counsel submits that unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount claimed in the return. As such there is no illegality in the adjustment. The contention of the appellant is that section 143(1A) is not attracted in this case and to that extent the intimation demanding additional tax is bad. Let us examine the correctness of the said contention. Section 143(1A) of the Act as it originally stood, the relevant portion reads: "(1A)(a) Where, in the case of any person, the total income, as a result of the adjustments made under the first proviso to clause (a) of sub-section (1), exceeds the total income declared in the return by any amount, the Assessing Officer shall,- (i) further increase the amount of tax payable under sub-section (1) by an additional income-tax calculated at the rate of twenty per cent. of the tax payable on such excess amount and specify the additional income-tax in the intimation to be sent under sub-clause (i) of clause (a) of sub-section (1)." Section 143(1A) as amended by the Finance Act, 1993, with effect from April 1, 1989, i.e., the date of insertion of section 143(1A) relevant portion reads: "(1A)(a) Where as a result of the adjustments made under the first proviso to clause (a) of sub-section (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reduced attracting the sub-clause (ii) of section 143(1A)(a). In that case the amended provisions will apply. To that effect is the decision of this court in the two decisions mentioned earlier. However, it must be noted that the adjustment made is only in respect of depreciation and not loss. Senior counsel submits that the loss and depreciation are different concepts and the provisions regarding deduction of depreciation and loss are also different. The senior counsel also relied on the provisions of section 32(2) of the Act and submitted that the deduction of depreciation in the computation of total income arises only in a case where there is income by way of profit and since there is no positive income during the previous year relevant to the assessment year there is no question of depreciation entering in the computation of total income and consequently there is no question of evasion of tax which is the very basis for introduction of section 143(1A). The. senior counsel also brought to our notice that in the assessment order (annexure B) passed under section 143 of the Act the Assessing Officer has treated loss and depreciation separately. As already noted the appellant ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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