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TMI Blog2009 (1) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the net result of the computation of income or loss for the relevant year by the Assessing Officer in exercise of the powers conferred under section 143(1)(a) of the Act. In other words, if the adjustment made by the Assessing Officer results in reduction of loss on account of disallowance of part or full depreciation claimed by the assessee, the same will justify levy of additional tax under section 143 of the Act. - we answer the question referred against the assessee and in favour of the Department and dismiss the assessee’s appeal - 61 of 2008 - - - Dated:- 5-1-2009 - C. N. RAMACHANDRAN NAIR and P. N. RAVINDRAN JJ. Sarangan and K. Vinod Chandran, for the appellant. P. K P. Menon, George K. George and Jose Joseph for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct introduced by the Finance Act, 1993, with retrospective effect from April 1,1989. It is against the demand of additional tax the assessee filed appeal. In fact the assessee first applied for rectification of the proceedings issued by the Assessing Officer for withdrawing the levy and demand of additional tax on differential loss. When this was turned down, the assessee filed appeal. Even though the order of appeal was in favour of the assessee, on second appeal by the Department, the Tribunal reversed it, against which the assessee filed this appeal before this court. Before this court, the contention raised by the assessee is that the reduction of loss and depreciation is not covered by section 143(1A) of the Act. According to the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of levy of additional tax, all what is required to be seen is whether in the intimation issued under section 143(1) (a) of the Act the income returned is increased or the loss returned is reduced by the assessing authority. If the loss is reduced on account of reduction in the claim of depreciation in proceedings issued by the Assessing Officer under section 143(1) (a) of the Act, then additional tax is payable on the differential amount is his contention. 4. In order to consider the claim, we have to refer to the relevant provisions, that is, section 143(1A) of the Act, which is extracted below: "(lA) (a) Where as a result of the adjustments made under the first proviso to cause (a) of sub section (1),— (i) the income declared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 143(1A) of the Act. Admittedly, the assessee filed its return declaring loss and that there is no dispute that disallowance of depreciation made by the Assessing Officer by way of prima facie adjustment is correctly done as the assessee's claim was contrary to the statutory provisions, inasmuch as when the assessee eligibility is 70 per cent. of the depreciation, the assessee claimed 100 per cent. However, the assessee's contention is that loss and depreciation are distinct and separate and, therefore, reduction of business loss for the purpose of additional tax does not take in loss attributable to reduction in depreciation. We are unable to accept this contention because all what is stated in section 143(1A) is that if the res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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