Law: Income Tax Act, 1961

Section: 80HHC,143,256(2)

(a) Income-tax----Reference---Assessment---Prima facie adjustment, under S.143(1)(a)--¬Interest from short-term deposits shown as business income and deduction under S.80HHC claimed---Assessing Officer whether justified in treating it as income from other sources---Question of law---Indian Income Tax Act,.1961, Ss.80HHC, 143 & 256(2). (b) Income-tax--- ----Reference---Question not raised before Tribunal cannot be referred--- Indian Income Tax Act, 1961, 5.256. The assessee-company filed its return for the assessment year 1992-93. It had shown in the printed form of the balance-sheet, income of Rs.2,04,27,492 from investment of surplus funds in short-term deposits or Government securities. This was claimed to be business income, and deduction under section 80HHC the Income Tax Act, 1961, was claimed on that basis. The Assessing Officer treated the said income as "income from other sources" and excluded it from business income. Deduction under section 80H HC was restricted to Rs.14,02,93,479. The Assessing Officer passed an order (intimation) under section 143(1)(a) of the Act. The assessee went in appeal before the Commissioner but the appeal was dismissed. The assessee, however, succeeded in its appeal filed before the Tribunal and the claim as made under section 80HHC was allowed. On an application to direct reference: Held (i) that the question whether an intimation under section 143(1)(a) of the Act could or could not be issued by the Assessing Officer after he had sent a notice to the assessee under section 143(2) was not raised before the Tribunal. This question was not also raised in the application under section 256(2) of the Act. it could not be referred, (ii) that on, account of the adjustment made by the Assessing Officer demand of Rs.16,09,466 by way of the additional tax was crest-questions, (i) whether, on the facts and m the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that prima facie adjustment made under section 143(1)(a) is not permitted by law, when on the face of the statement of accounts, it was clearly a wrong claim of the assessee, and (ii) whether, on the facts and in the circumstances of…

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