TMI Blog1991 (10) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... f loss declaring a loss of Rs. 1,36,83,23,142 and claimed refund of Rs. 1,64,013 which was tax deducted at source. This return was filed on December 28, 1989, and, according to the petitioner, the same was accompanied by all the necessary annexures, documents, statements, annual reports, etc. The Deputy Commissioner of Income-tax (Assessment), on August 30, 1990, intimated to the petitioner that this return of loss, subject to adjustments, had been accepted. The Deputy Commissioner disallowed expenses to the tune of Rs. 3,86,00,759 and the reason for this disallowance was contained in the adjustment explanatory sheet annexed to the said intimation sent under section 143(1)(a) of the Income-tax Act. The said sheet disclosed three items of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusion that the additional tax of Rs. 38,60,075 was payable by the petitioner. It is this demand which has been challenged before us. On a return being filed under section 139 or in response to a notice under sub-section (1) of section 142, the Assessing Officer has an option to frame an assessment under sub-section (1) of section 143 on the basis of the return filed. The Assessing Officer is entitled to make adjustments in the income or loss declared. The adjustments which can be made are referred to in the first proviso to section 143(1). Sub-section (1A) was inserted with effect from April 1, 1989. Subclause (a) of the said provision reads as follows : " 143. ( 1 A) (a) Where, in the case of any person, the total income, as a resu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and not loss is returned and the income declared is increased as a result of adjustment or if a loss is returned but adjustments are carried out in accordance with the first proviso which result in an income, then, in our opinion, on a correct interpretation of sub-section (1A), the said provision would be applicable. This is for the reason that sub-clause (i) of section 143(1A (a) uses the expression "further increases the amount of tax payable". This clearly indicates that, as a result of the adjustments made, there should be demand of tax and it is in addition to this tax that 20% of the tax payable on the excess amount is also chargeable. The said provision clearly stipulate that, after an adjustment under sub-section (1) is made, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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