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TMI Blog2005 (9) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer in Delhi was concerned, he was bound by the decision of this court in the case of CIT v. Marketing Research Corporation and as such, there was no scope for any debate. Therefore, the adjustments could be made by the Assessing Officer under section 143(1)(a). Accordingly, we feel that no substantial question of law arises for our consideration and the appeal is dismissed - - - - - Dated:- 12-9-2005 - Judge(s) : T. S. THAKUR., BADAR DURREZ AHMED. JUDGMENT The judgment of the court was delivered by Badar Durrez Ahmed J.-The assessee, a lawyer by profession, filed his return of income on October 31,1995, in respect of the assessment year 1995-96. He declared a total income of Rs. 2,05,326 after claiming a deduction of Rs. 17,05,760 under section 80-O being 50 per cent, of the gross professional fees received in foreign exchange to the extent of Rs. 34,11,529. In the profit and loss account, the assessee had shown gross professional fees amounting to Rs. 41,46,203 (including the said gross professional fees received in foreign exchange) and gross interest receipt of Rs. 42,804. The assessee claimed various expenses like salary, traveling expenditure, conveya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earch Corporation [1987] 61 CTR 204 (Delhi) was fully approved and endorsed by a Full Bench of this court in the case of CIT v. Chemical and Metallurgical Design Co. Ltd. [2001] 247 ITR 749. On the other hand, it was argued on behalf of the assessee that when the assessee filed the return on October 31,1995, the question of deduction being claimed on the basis of gross receipts of foreign exchange or on a net basis was still in the realm of uncertainty and, therefore, no adjustment could be done under section 143(1)(a) of the said Act. It was argued that in a decision of the Calcutta Bench of the Tribunal in the case of M. N. Dastur and Co. Ltd. v. Deputy CIT [1992] 40 ITD 521, it had been held that deduction under section 80-O was to be computed on gross receipts of foreign exchange. Though this decision had been subsequently reversed by the Calcutta High Court, yet, the issue, according to the assessee, was debatable in the year 1995 when the assessee had filed his return. The Tribunal considered these rival submissions and held that since this court in the case of CIT v. Marketing Research Corporation [1987] 61 CTR 204 had held that deduction under section 80-O was to be com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titled to relief under section 80-O of the Income-tax Act on the gross receipt of Rs. 57,320?" A Division Bench of this court following the decision of the Supreme Court in the case of Distributors (Baroda) Pvt. Ltd. [1985] 155 ITR 120 held as under: "The Supreme Court has held that for the purposes of section 80-O, the deduction has to be computed not on the basis of gross income but on the basis of net income. In view of the Supreme Court decision the question referred to us is answered in favour of the applicant and against the assessee. The question is answered accordingly." While this was the position in law as prevailing in Delhi, the assessee filed his return for the assessment year 1995-96 on October 31, 1995, claiming deduction under section 80-O on the basis of gross income and not net income. This was clearly contrary to the decision of this court in CIT v. Marketing Research Corporation [1987] 61 CTR 204. On January 27, 1997, when the Assessing Officer processed the return under section 143(1) (a) and issued the intimation, the position was not debatable and it was quite well-settled and, therefore, he could make the adjustment. It is another matter that subsequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim is inadmissible on the face of it and there is no possibility of any debate thereon on such claim, etc. If anything more is read into the power of the Assessing Officer to make unilateral adjustments, it would render the provision wholly arbitrary and unreasonable because: (a) a disallowance is made without giving an opportunity to the assessee to explain his view point in support of the deduction or allowance, and (b) additional tax on the increased amount is charged from him arbitrarily. This would not only be in total violation of the principles of natural justice, it will also be not in consonance with the spirit of the provision to cause minimum inconvenience to the assessee and at the same time put the assessee on guard against claiming inadmissible deductions and allowances. On the contrary, the above interpretation of section 143(1)(a) of the Act will not cause any prejudice to the Revenue. In a given case where the Assessing Officer has any doubt about the allowability of deduction or claim made by the assessee, it is open to him to issue a notice under sub-section (2) of section 143 and have the evidence in support thereof. Similar view have been expressed on the subj ..... X X X X Extracts X X X X X X X X Extracts X X X X
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