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TMI Blog2004 (7) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. The assessee had further claimed the benefit under section 54F of the Act showing investment in purchase of property No. 84, Sector 9, Faridabad, on December 6,1988 for Rs. 1,43,607. It was further explained that the balance amount of Rs. 3,28,400 (Rs. 4,72,000-1,43,600) had been deposited in the Punjab National Bank, Faridabad, in account No. 9248 to be utilised for construction of a house within the permissible period. Hence the taxable capital gain was shown as "nil". On receipt of the return, the Assessing Officer issued a deficiency letter on September 20, 1989 under section 139(9) of the Act asking the assessee to specify the nature of account No. 9248 with the Punjab National Bank, Faridabad, along with the proof of money deposited in the Capital Gains Account Scheme, 1988. Vide letter dated October 4, 1989, the assessee explained that the aforesaid account was opened in the Punjab National Bank, Sector 15 at Faridabad, on October 15, 1988, wherein the sale consideration of Rs. 5 lakhs received on the sale of plot in Anand Vihar was deposited. It was further explained that the assessee had also purchased a plot for constructing a residential house for a sum of Rs. 1,43,6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 154 of the Act objecting to the adjustment made by the Assessing Officer. It was claimed that the addition of Rs. 1,06,240 could not be made as a prima facie adjustment under section 143(1)(a). The Assessing Officer vide his order dated January 29, 1990 rejected the assessee's application holding that the law clearly stipulated that for claiming the benefit under section 54F, the amount of consideration had to be deposited in the Capital Gains Account Scheme which had not been done by the assessee. Aggrieved by the said order, the assessee filed an appeal before the Commissioner of Income-tax, Rohtak, who, vide his order dated December 16, 1991, affirmed the findings of the Assessing Officer and dismissed the same. Still aggrieved, the assessee preferred an appeal before the Tribunal which has also been dismissed vide the impugned order dated April 29, 1999. The Tribunal has accepted the contention of the assessee that an adjustment under section 143(1)(a) could be made only if it was found that a deduction, allowance or relief claimed in the return, which, on the basis of the information available in the return, accounts or documents, was, prima facie inadmissible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in which the unutilised amount of sale price of the plot had been deposited. This is also evident from the fact that the Assessing Officer needed to verify it by issuing a letter dated September 20, 1989 subsequent to the filing of the return. He further pointed out that although this letter has been labelled as deficiency letter under section 139(9) of the Act, but it was, in fact, not so as it does not fall within the parameters of the said provision. It was simply a letter seeking certain further information in respect of the return filed by the assessee, which was not permissible for sending an intimation under section 143(1)(a) of the Act. Learned counsel also contended that even otherwise, there was substantial compliance with the provisions of section 54F of the Act by the assessee as the entire sale proceeds had been deposited in a nationalised bank and money was withdrawn from time to time for construction of the new house within the period stipulated in the said provision. The only difference was that the savings bank account was not named as capital gains account as the bank was not aware of any such scheme by its head office as the scheme had been announced only a few ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is prima facie admissible but which is not claimed in return, shall be allowed; (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 is prima facie inadmissible, shall be disallowed." In the instant case, it is clause (iii) of the proviso which was sought to be applied by the Income-tax Officer. The said clause clearly provides that the Income-tax Officer can make an adjustment to the income or loss declared in the return only if, on the basis of the information available in such return, accounts or documents, the deduction, allowance or relief claimed is prima facie inadmissible. The conclusion that the claim of the assessee is inadmissible must, in other words, flow from the return as filed. No power is given to the Income-tax Officer to disallow a claim for the reason that there is no proof in support of the claim made by the assessee. In other words, if the claim for deduction or exemption is not supported by requisite documents or information filed with the return, it cannot be said that the said deduction or allowance is prima facie inadmissible. The auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siders that the return of income furnished by the assessee is defective, he may intimate the defect to the assessee and give him an opportunity to rectify the defect within a period of fifteen days from the date of such intimation or within such further period which, on an application made in this behalf, the Assessing Officer may, in his discretion, allow and if the defect is not rectified within the said period of fifteen days or, as the case may be, the further period so allowed, then notwithstanding anything contained in any other provision of this Act, the return shall be treated as an invalid return and the provisions of this Act shall apply as if the assessee had failed to furnish the return: Provided that where the assessee rectified the defect after the expiry of the said period of fifteen days or the further period allowed, but before the assessment is made, the Assessing Officer may condone the delay and treat the return as a valid return. Explanation. - For the purposes of this sub-section, a return of income shall be regarded as defective unless all the following conditions are fulfilled, namely: - (a) the annexures, statements and columns in the return of income re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the circumstances under which a return can be treated as defective. In other words, a return can be treated as defective only if it falls in one or more of clauses (a) to (f) of the Explanation. Thus it is clear that failure to give particulars of the bank account for the purposes of making a claim under section 54F is not a case for regarding a return as defective. Consequently, the Assessing Officer could not have issued any deficiency letter under section 139(9). Thus, we are satisfied that the letter dated September 20, 1989, was not a notice under section 139(9) of the Act, but was simply a letter seeking further information from the assessee. In view of the above, it is clear that the addition of Rs. 1,06,240 made to the returned income by way of an adjustment under section 143(1)(a) is based on the information which had been obtained after the filing of return, whereas such an adjustment could have been made only on the basis of the information available in the return or accounts or documents filed with the return. A deduction claimed in the return cannot be treated as prima facie inadmissible for want of proof or necessary particulars. Thus, the assessee is bound to succe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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