TMI Blog1994 (9) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... claiming a sum of Rs. 5,76,165 on account of loss on fluctuation of exchange. On March 31, 1992, an intimation was issued to the petitioner under section 143(1)(a) of the Act by the Deputy Commissioner of Income-tax accepting the petitioner's return in toto without making any adjustment. According to the petitioner, the Deputy Commissioner erred in certain other respects which are not material for the purpose of this application. On May 13, 1992, and May 3, 1993, the Deputy Commissioner issued two notices on the petitioner under section 143(2) of the Act calling upon the petitioner to produce books of account, documents and evidence in support of its return. A notice under section 142(1) of the Act was also issued. The petitioner complie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. Where, however, the order under section 143(1)(a) is followed by a regular assessment under section 143(3), the order under section 143(1)(a) in so far as it is contrary to the regular assessment under section 143(3), ceases to be executable and becomes ineffective. The respondent authorities termed the intimation under section 143(1)(a) as a provisional assessment. But, according to the respondents, this provisional assessment did not merge with the final assessment and that the order under section 143(1)(a) continues to exist justifying the issuance of a notice under section 154 of the Act. The respondents have relied upon the provisions of section 143(1)(b), section 154(1) and section 154(1A) in this connection. Section 143(1)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia Ltd. v. Dy. CIT (since reported in [1995] 212 ITR 496)]. Now, the question whether the loss on fluctuation of exchange should be allowed under section 43A when the fluctuation takes place or when payment of the foreign exchange takes place is not a matter which can be said to be free from debate or dispute. The question arose in the context of the petitioner entering into agreements with a foreign concern. In consideration for certain benefits the petitioner was to pay the foreign concern in pound sterling. Subsequent to the agreement, the rupee was devalued. Consequently, the liability of the petitioner to pay in Indian rupees increased. The petitioner filed its return claiming loss by reason of its higher liability because of the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of fact. The dispute may exist with regard to a legal point as well. The respondents' submission that the court should not interfere with the mere issuance of notice under section 154 of the Act under article 226 of the Constitution is contrary to law as established by judicial precedent. The Supreme Court in T. S. Balaram, ITO v. Volkart Brothers [1971] 82 ITR 50 has in no uncertain terms held that a decision on a debatable point of law is not a mistake apparent from the record which could be rectified under section 154 of the Act. This view has also been held by the Calcutta High Court. In Harbans Lal Malhotra and Sons Pvt. Ltd. v. ITO [1972] 83 ITR 848, S. Mukharji J. (as his Lordship then was) also held that the assessee did not hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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