TMI Blog2002 (2) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. At the time of hearing, Shri P.C. Chadaga, DR and Shri S. Parthasarathi, Advocate represented the Revenue and the assessee respectively. Their submissions have been heard and the same have been considered in disposing of the present appeal. 3. The facts giving rise to the disputes before us are in a narrow compass. The assessee-company had filed its return of income for the assessment year 1994-95 at an income of Rs. 15,07,70,963 on 8-6-1995. The said return was processed by the Assessing Officer and an intimation under section 143(1)(a) was issued on 30-10-1995, wherein the income was adjusted to Rs. 39,14,72,260 after making certain adjustments in pursuance to the first proviso to section 143(1)(a). The adjustments carried out were o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in a short and cryptic order accepted the plea of the assessee that this is not a case for prima facie disallowance and, therefore, set aside the adjustment. 5. At the time of hearing before us, the learned DR by and large reiterated the arguments taken by the Assessing Officer in the adjustment explanatory sheet annexed to the intimation under section 143(1)(a), dated 30-10-1995. According to the DR, the assessee in its books of account had only claimed Rs. 20 lakhs only in the profit and loss account and but the claim under the Income Tax law should also be viewed in the same manner. Therefore, according to him, the impugned adjustment does fall under the provisions of section 143(1)(a). 6. On the other hand, the learned counsel fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was precluded from doing the same and was bound to follow the procedure under section 143(2) of the Act requiring giving of a notice to the assessee. It is further held by the Hon'ble jurisdictional High Court that no substantial adjustments which inter alia require examination of evidence or a hearing were envisaged under section 143(1)(a). Even on this count, we have no hesitation in concluding that the prima facie adjustment carried out in the impugned intimation is clearly outside the scope and ambit of section 143(1)(a) and is, therefore, liable to be quashed. This ground is decided in favour of the assessee. 8. The second issue is in relation to the adjustment carried out with respect to the excess depreciation claimed. Briefly the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the earlier years of Bangalore Hospitals Ltd., to the Written Down Value (WDV). In other words, the depreciation in the consolidated return of income was claimed at a figure higher than the WDV in the hands of the erstwhile Bangalore Hospitals. The Assessing Officer found this inconsistent with the provisions of Explanation 2 to clause (c) of sub-section (6) of section 43. Therefore, the excess depreciation amounting to Rs. 1,24,27,933 was disallowed by making an adjustment to the returned income while framing the intimation under section 143(1)(a) by the Assessing Officer. The first appellate authority allowed the appeal of the assessee by holding that the issue was debatable and, therefore, outside the purview of section 143(1)(a). 9. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom perusal of the return and accompanying records of the assessee that the claim of the assessee was patently inadmissible. 10. On the other hand, Shri Parthasarathi, the learned counsel appearing on behalf of the assessee reiterated similar arguments as in relation to the first ground. It is also pointed out by the learned counsel for the assessee that the assessee relied upon the decision of the Bombay High Court in Hindustan Petroleum Corpn. Ltd.'s case on a bona fide belief that the decision was applicable to the year under appeal. Of course, the amendment to law negated the stand of the assessee, but according to him, two views were possible on this issue and, therefore, was of debatable nature and, therefore, outside the scope of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e return, accounts or documents accompanying it; ii. any loss carried forward, deduction, allowance or relief which on the basis of the information available in such return, accounts or documents, was prima facie admissible but which was not claimed in the return; and 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, was prima facie inadmissible. In our view, the ingredients that are necessary for the Assessing Officer to invoke the power of carrying out the prima facie adjustments as envisaged herein above were evidently present in the instant case. The Assessing Officer on the basis of the information and the do ..... X X X X Extracts X X X X X X X X Extracts X X X X
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