Law:

Section:

Section 143, read with section 154, of the Income-tax Act, 1961 - Assessment - Additional tax - Assessment year 1993-94 - Whether Assessing Officer can levy additional income-tax only when if pursuant to adjustments made to return, income is found to have increased or loss declared in return is reduced or is converted into income - Held, yes - Whether for computation of additional income-tax Assessing Officer has to give due credence to any order already passed under section 154 - Held, yes Interpretation of statutes - Rule of strict construction FACTS The Assessing Officer after scrutiny of return under section 143(1A), sent an intimation to the assessee-company intimating levy of additional tax on account of disallowance of deduction under the head 'Interest-tax'. The assessee filed an application under section 154 claiming 100 per cent depreciation in respect of air-conditioner, which had not been granted by the Assessing Officer while making adjustment under section 143(1A). On appeal, the Commissioner (Appeals) held that the assessee was entitled to 100 per cent depreciation and directed the Assessing Officer to allow the same while making adjustments under section 143(1A). However, the Assessing Officer without giving effect to the appellate order included the said additional tax in the demand notice. On appeal, the Commissioner (Appeals) held that the inclusion of additional tax was impermissible in law since adjustment of depreciation on air-conditioner against addition on account of interest tax did not result in any increase in income. However, the Tribunal restored the levy of additional income-tax. On appeal under section 260A : HELD From the reading of section 143(1A)(a ), it is clear that the Assessing Officer can levy additional income-tax only if pursuant to adjustments made to the return, the income is found to have increased or the loss declared in the return is reduced or is converted into income. This section does not provide that even in a case where after adjustments, the income gets reduced then also the Assessing Officer can levy additional income-tax. Further, as provided under section 143(1A)(b), for computation of additional…

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