TMI Blog1999 (2) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 115J is a debatable one, though the issue was settled by the Andhra Pradesh High Court's decision in the case of V. V. Trans-Investments (P.) Ltd. [1994] 207 ITR 508 ? (2) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that the decision of the Andhra Pradesh High Court referred to above is not applicable to the assessee's case, since the decision was rendered subsequent to processing the return under section 143(1)(a) ?" However, in I. T. C. No. 94 of 1998, the following question was framed : "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in holding that the adjustment made by the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the order rejecting the application under section 154, the Appellate Commissioner or Tribunal can declare that the adjustments made under section 143(1)(a) vis-a-vis section 115J are unsustainable and thereby delete the addition/adjustment ?" It is in the light of these questions debated before us, we proceed to consider these applications. In the proceedings under section 143(1)(a) of the Income-tax Act for the years 1988 to 1990, the Assessing Officer computed the loss excluding unabsorbed depreciation of earlier years, while arriving at the book profit under section 115J, whereas according to the assessee's return, loss is calculated including unabsorbed depreciation thereon. Thereafter, the assessee filed a petition for rectificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was no unanimity of view. It was only in March, 1992, that the Hyderabad Bench of the Income-tax Appellate Tribunal resolved the issue in favour of the Revenue and against the assessee. This view of the Tribunal was confirmed much later by the High Court in V. V. Trans-Investments (P.) Ltd. v. CIT [1994] 207 ITR 508 (AP). By the time the Assessing Officer completed the assessment under section 143(1)(a) of the Act by impliedly rejecting the assessee's claim and making necessary adjustments on the view taken by him, the legal position was in a state of flux. Learned senior standing counsel however points out that by the date, the Central Board of Direct Taxes by Circular No. 495 dated September 22, 1987, clarified the legal position and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) the question as to how the loss has to be computed under section 115J remained a debatable issue at the relevant point of time, it would be equally so for the purpose of section 154. In the case of the rectification petition disposed of after the Tribunal's decision (for e.g., in the case of ITC No. 122 of 1998), it would be an "a fortiori" case in as much as by that date, the legal position was settled by the Tribunal leaving no scope to invoke section 154. The argument, though plausible, does not commend to our acceptance. By resorting to adjustments of controversial nature in purported exercise of power under section 143(1)(a), the Assessing Officer, in view of what is stated above, out stepped his jurisdiction thereby determining the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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