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2008] 305 ITR 103 [2008] 170 TAXMAN 304 (SC) SUPREME COURT OF INDIA Kvaverner John Brown Engg. (India)(P.) Ltd. v. Assistant Commissioner of Income-tax, Bangalore S.H. KAPADIA AND B. SUDERSHAN REDDY, JJ. CIVIL APPEAL NOS. 3073 AND 3074 OF 2008 APRIL 29, 2008 Section 143 of the Income-tax Act, 1961 - Assessment - Prima facie adjustment - Assessment years 1996-97 and 1997-98 - Assessee claimed deduction under section 80-O in respect of qualifying income brought into India in convertible foreign exchange - In its return, assessee indicated qualifying income as gross figure - However, by way of adjustment under section 143(1)(a), Assessing Officer restricted qualifying income to net figure and demanded additional tax under section 143(1A) - Whether since there were conflicting s on interpretation of section 80-O, prima facie adjustments contemplated under section 143(1)(a) were not applicable and, consequently, assessee was not liable to pay additional tax under section 143(1A) - Held, yes FACTS During the relevant assessment years, the assessee claimed deduction under section 80-O in respect of qualifying income brought into India in convertible foreign exchange. In its return, the assessee indicated the qualifying income at gross figure. By way of adjustment under section 143(1)(a), the Assessing Officer restricted the qualifying income to the net figure. Accordingly, additional tax was demanded from the assessee on account of adjustment in its return under section 143(1)(a), read with section 143(1A). On appeal to the Supreme Court : HELD One of the main conditions stipulated by way of the first proviso to section 143(1)(a), as it stood during the relevant time, referred to prima facie adjustments. The first proviso permitted the department to make adjustments in the income or loss declared in the return in cases of arithmetical errors or in cases where any loss carried forward or deduction or disallowance which on the basis of information available in such return was, prima facie admissible, but which was not claimed in the return or in cases where any loss carried forward, or deduction or allowance claimed in the return which on the basis of information…

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