9911796707
TMI Blog2002 (8) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... d 1991-92) in the order of CIT(A) are will outside the purview of prima facie adjustment permissible under the first proviso to section 143(1)(a) and not sustainable." 2. The facts of the case are as follows:--The assessee filed the return of income for the assessment year 1994-95. The assessee claimed deduction for carry forward loss of Rs. 41,75,074. The Assessing Officer, however, allowed deduction for carry forward loss of earlier years at Rs. 38,53,011 and therefore, made adjustment of Rs. 3,22,063 being the difference between the assessee's claim for loss of Rs. 41,75,074 and actual carry forward loss as per earlier year's record of the Department at Rs. 38,53,011. The Assessing Officer also demanded additional tax. 3. In first ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all be disallowed." The Central Board of Direct Taxes has issued Circular No. 549 dated 31st October, 1989 explaining the relevant provisions. In para 54 of this circular, it has been clarified by the Board that prima facie adjustment can be made only on the basis of information available in the return or accompanying accounts or documents and not on the basis of the past records of the assessee. Some examples of prima facie adjustment or inadmissible in respect of which adjustment can be made to the return of income or loss are mentioned in para 5.4. Adjustment of loss can be done only in the following three type of cases as mentioned in para 5.4(vi), (vii) and (viii):-- "5.4. (vi). Loss under any head, other than under the head "Profi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower to go beyond the return of income insofar as the prima facie adjustment are concerned. Since in this case of the assessee prima facie adjustment of loss has been made on the basis of assessment records of earlier years, the, same was not permissible according to the provisions of law and Board's Circular No. 549 dated 31st October, 1989. Therefore, the Assessing Officer was not justified in making prima facie adjustment in respect of loss of Rs. 41,75,074 claimed by the assessee and the Assessing Officer is directed to allow deduction of loss of Rs. 41,75,074, because no information has been pointed out by the Assessing Officer which was available in the return of income for the assessment year 1994-95 on the basis of which prima facie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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