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TMI Blog1993 (3) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... sold certain shares at a profit and others at a loss. The gain was of Rs. 3,18,074 on the sale of shares of Vindhya Telelinks, Hind Aluminium, TISCO, Kirloskar Commines, G. E. Shipping etc. The loss was of Rs. 99,959 and on the sale of the shares of Mather Platt, Hind D'Oliver, Tata Unisys, etc. the net gain was thus of Rs. 2,18,115 (Rs. 3,18,074 - Rs. 99,959). These figures underwent a change because the gain on certain shares like S. E. E. Ltd. and Bajaj Auto of Rs. 31,600 was considered by the ITO to be short-term capital gain as against long-term capital gain, claimed by the assessee. The assessee computed the deduction under section 48(2) of the Act on the net capital gain - the first on Rs. 12,500 @ 100 per cent (Rs. 10,000 as incr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, without prejudice to the provisions of sub-section (2), an intimation shall be sent to the assessee, specifying the sum so payable, and such intimation shall be deemed to be a notice of demand issued under section 156 and all the provisions of this Act shall apply accordingly, and (ii) if any refund is due on the basis of such return, it shall be granted to the assessee : Provided that in computing the tax or interest payable by, or refundable to, the assessee, the following adjustments shall be made in the income or loss declared in the return, namely : (i) any arithmetical errors in the return, accounts or documents accompanying it shall be rectified ; (ii) any loss carried forward, deduction, allowance or relief, which, on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stake nor it relates to carry forward of any deduction, allowance, or relief, which could be said to be prima facie inadmissible. It is a matter of debatable issue and not a prima facie case that when there is an overall net gain, whether it is section 48(2) which is applicable and the provisions of section 48(3) comes into picture only when there is an overall loss under the head capital gains. Furthermore, scaling down of the deduction under section 48(3), even according to the DCIT(Appeals), is a debatable issue. In my opinion, therefore, the ITO has no jurisdiction to scale down the deduction of Rs. 12,500 from the loss while proceeding under section 143(1)(a) of the Act. If he does so, the Intimation issued thereunder would not be in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) and the consequential charge of additional income-tax under section 143(1A), because the adjustments are to be made only in respect of arithmetical errors and prima facie admissibles or inadmissibles. Any action of the Assessing Officer in contravention of these provisions will be clearly a mistake. Therefore, section 154 relating to rectification of mistakes has been amended to bring an intimation/refund issued under section 143(1) within the purview of that section (refer para 9.1 of these Explanatory Notes). Therefore, if an assessee is aggrieved by an adjustment made to the returned income/loss and also the consequential charge of additional Income-tax, he can move an application under section 154 before the Assessing Officer for re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowed under the proviso to section 143(1)(a). If any further enquiry is necessary, or if the Income-tax Officer feels that further proof is required in connection with the claim for deduction, he will have to issue a notice under sub-section (2) of section 143. " 7. The submission of the learned Departmental Representative that an appeal lay against the Intimation, as has been held by the Tribunal in many cases, the assessee could have filed an appeal against the Intimation under section 143(1)(a) and having missed that opportunity, he cannot invoke the provisions of section 154 of the Act and seek rectification on a debatable issue has no force - firstly, because as per the above circulars, of the Board, no appeal is provided against ..... X X X X Extracts X X X X X X X X Extracts X X X X
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