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TMI Blog1997 (12) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... nal was right in law in holding that prima facie adjustment made under section 143(1)(a) is not permitted by law, when on the face of the statement of accounts, it was clearly a wrong claim of the assessee ? (2) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that income from non-trade investment forms part of profit from business or profession for the purpose of deduction under section 80HHC ?" The assessee-company filed a return of income on December 51, 1992, for the assessment year 1992-93 (accounting year ending on March 31, 1992) declaring income of Rs. 4,55,80,306. A revised return was filed thereafter, declaring income at Rs. 5,67,65,120. The Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... precluded from processing the return. It has been explained by Shri Sawhney that the assessee had shown in the balance-sheet certain income (from non-trade investments) under the head "Other income". He has argued that this is an area which is not free from controversy or doubt and, therefore, the question of law should be sought from the Tribunal for the purpose of giving opinion. The question to be decided is as to what is the scope and ambit of adjustment to be made under section 143(1)(a) of the Act. Shri B. S. Gupta, learned senior counsel for the assessee, has opposed this application with the plea that the action of the Assessing Officer was not in the nature of prima facie adjustment and, therefore, the Tribunal rightly accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , learned senior counsel for the assessee, has also argued that one of the reasons for quashing the intimation under section 143(1)(a), before the Tribunal, was that the Assessing Officer had no jurisdiction to make any adjustment and issue intimation after he had already issued a notice to the assessee under section 143(2) of the Act. The Department has not sought a question of law on that finding. Therefore, the question arising from the order of the Tribunal on that aspect of the subject has neither been sought for reference nor can be examined by this court. Shri Sawhney at that point requested for the reframing of the question, which was vehemently opposed by Shri Gupta. Shri Sawhney has argued that in the light of the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be said that the questions sought to be referred now do not arise from the Tribunal's order. Income from non-trade investment was treated by the Assessing Officer as income from business and in that view of the matter, the Assessing Officer proceeded to make prima facie adjustment. It is correct that, on account of the adjustment made by the Assessing Officer, a demand of Rs. 16,09,466 by way of additional tax under section 143(1A) was created. The question which needs consideration is whether the Assessing Officer exceeded his jurisdiction while making prima facie adjustment to the disclosed income of the assessee. It appears that the assessee had shown in the printed form of the balance-sheet income of Rs. 2,04,27,492 from investm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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