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TMI Blog2022 (12) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... sible and on such a highly debatable issue, prima facie adjustment ought not to have been carried out by the assessing officer. Taking the view that interest payments sought to be set off against interest receipts having the same origin namely borrowed funds, CIT(A) set aside the prima facie adjustment made by the assessing officer. Tribunal held that order passed by the CIT(A) was a well reasoned one which did not warrant interference in further appeal. Tribunal further noted that decision of the Supreme Court in CIT v. Tuticorn Alkaline Chemicals and Fertilisers Ltd. [ 1997 (7) TMI 4 - SUPREME COURT] was not available at the time of making prima facie adjustment by the assessing officer. Supreme Court had pronounced the decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax may be below the limit of one crore. She therefore, prayed for time to obtain instructions. 4. On instructions received, today learned counsel for the appellant submits that disputed tax would be above one crore outer limit. Therefore, the appeal would have to be heard on merits. 5. Though this appeal was admitted for hearing on 24.02.2003, no substantial question of law was framed. However, from the memo of appeal we find that appellant/revenue has proposed the following question as a substantial question of law: Whether on the facts and in the circumstances of the case, Tribunal was justified in upholding the order of the first appellate authority setting aside the intimation of the assessing officer under Section 143(1)(a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n under Section 143(1)(a) of the Act. 10. Revenue carried the matter in further appeal before the Tribunal. By the order dated 21.08.2001, Tribunal dismissed the appeal of the revenue. Hence, this appeal. 11. Learned Senior Standing Counsel for the appellant submits that set-off of adjustment of interest earned by the respondent against interest paid for borrowed funds was no longer a debatable issue inasmuch as the said issue was conclusively determined by this Court in the three decisions referred to and relied upon by the assessing officer which was also urged before the Tribunal. The same no longer being a debatable issue could be disallowed by the assessing officer as a prima facie adjustment under Section 143(1)(a) of the Act. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d have made prima facie adjustment by disallowing the claim of adjustment of interest on deposits by the respondent/assessee at the stage of issuance of intimation under Section 143(1)(a) of the Act ? 15. To appreciate the rival contentions, we may advert to the order passed by the CIT(A). CIT(A) held that in the guise of prima facie adjustment, assessing officer cannot adjudicate upon debatable issues. Reliance was placed on the decision of the Madhya Pradesh High Court in Kamal Textiles v. ITO 189 ITR 339 as well as on the decision of the Calcutta High Court in Modern Fibotex India Ltd. v. DCIT 212 ITR 496 . Thereafter, CIT(A) held as follows: In the present case the decision rendered by the jurisdictional High Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the issue was highly debatable on which two opinions were clearly possible and on such a highly debatable issue, prima facie adjustment ought not to have been carried out by the assessing officer. Taking the view that interest payments sought to be set off against interest receipts having the same origin namely borrowed funds, CIT(A) set aside the prima facie adjustment made by the assessing officer. 17. In further appeal before the Tribunal, Tribunal held that order passed by the CIT(A) was a well reasoned one which did not warrant interference in further appeal. Tribunal further noted that decision of the Supreme Court in CIT v. Tuticorn Alkaline Chemicals and Fertilisers Ltd. (supra) was not available at the time of mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) of section 139; or (vi) addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return; Provided that no such adjustments shall be made unless an intimation is given to the assessee of such adjustments either in writing or in electronic mode. 20. We are of the view that the above provision clearly mentions the circumstances in which prima facie adjustment can be carried out under Section 143(1)(a) of the Act. The prima facie adjustment sought to be carried out by the assessing officer in the instant case does not fall within any of the illustrations mentioned above. 21. In the circumstances, we do not find any error or infirmity in the view taken ..... X X X X Extracts X X X X X X X X Extracts X X X X
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