Wealth Tax-Prima facie adjustments by A.O. to net wealth u/s 16(1)(a). - Income Tax - 1869/1990

INSTRUCTION NO. 1869/1990 Dated: December 5, 1990 Under the provisions of section 16(1)(a) of the Wealth-tax Act, the Assessing Officer have been with effect from 1.4.1989, empowered to make prima facie adjustments, besides correcting arithmetical errors. The following are the adjustments that shall be made by the Assessing Officer to the net wealth declared in the return: (i) any arithmetical errors in the return, accounts or documents accompanying it, shall be rectified; (ii) any exemption or deduction, which, on the basis of the information available in such return, accounts or documents, is prima facie admissible but which is not claimed or made in the return, shall be allowed; (iii) any exemption or dedection claimed or made in the return, which, on the basis of the information available in such return, accounts or documents is prima facie inadmissible, shall be disallowed. 2. There is already a handbook issued on the prima facie adjustments under section 143(1)(a) of the Income-tax Act, 1961. The principles behind the concept of making prima facie adjustments are dealt with therein. It would be enough to state that the decision to grant or not to grant exemption, deduction, allowance or relief that are obvious, patent, and do not require detailed enquiries, will be covered under the principle of prima facie adjustments. 3. The enclosed list of prima facie adjustments, which is not exhaustive, deals particularly with the exemptions available under section 5 of the Wealth-tax Act read with sections 5(1), 5(1A),5(2) and 5(3) and the definition of properties situated outside India under section 6 may be used by the Assessing Officers for ready reference. This would be useful not only for making adjustments, but also to identify cases which warrant enquiries. The cases thus identified can be taken up for scrutiny. Separate instructions already exist (Instructions No.1851) on the modalities of selecting cases for scrutiny under wealth-tax Act. 4. There may also be other cases which warrant prima facie adjustments, particularly involving valuation of assets under Schedule-III to the Wealth-tax Act. Such cases may also be decided in accordance with the principles mentioned in paragraph 2 above. 5. The above instruction may be brought to the notice of all the officers working in your charge. 6. The Hindi version will follow.