Commissioner Of Income Tax v. Phil Corporation Ltd. & Anr.

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The Tax PublishersIT Appeal No. 44 of 2002 2012 TaxPub(DT) 0425 (Bom-HC) : (2012) 046 (I) ITCL 0377 : (2011) 243 CTR 0525 : (2011) 060 DTR 0199 INCOME TAX ACT, 1961 --Assessment--Prima facie adjustment under section 143(1)(a) Disallowance of claim of provision of bad and doubtful debts--The issue under consideration was whether the adjustment carried out by assessing officer regarding assessee's claim of deduction under section 36(1)(vii) in respect of provision for bad and doubtful debt was covered within the ambit of prima facie adjustment envisaged in section 143(10(a) or not. *Held:* Under the provisions of section 143(1)(a), the assessing officer is not entitled to allow or disallow the claim but can only make adjustment on a prima facie scrutiny of the return and the accompanying documents filed by the assessee. In the present case, Indeed, the assessing officer had disallowed the claim for deduction made by the assessee by going into the merits of the claim, which could have only been done by the process of assessment for which it would be necessary for the assessing officer to issue a notice and call for the particulars to enable them to assess or adjudicate the claim. That not having been done, assessing officer travelled beyond the scope of the powers conferred upon him by section 143(1)(a) of the Act and thus wrongly disallowed the claim itself. Income Tax Act, 1961 Section 143(10(a) IN THE BOMBAY HIGH COURT S.A. BOBDE & F.M. REIS, JJ. CIT v. Phil Corporation Ltd. & Anr. IT Appeal No. 44 of 2002 28 June, 2011 In favour of: Assessee Appellantby : Asha Dessal Respondentby : M.S. Sonak, JUDGMENT Sla. Bobde, J. This appeal was admitted on the following substantial question of law : 'A. Whether on the facts and in the circumstances of the case, the Tribunal was justified in deleting the prima facie adjustment of Rs. 9,00,000 on account of provision for doubtful debt carried out by the assessing officer in the light of the Explanation added to section 36(1)(vii) by Finance Act, 2001 with retrospective effect from 1-4-1989 ?' SUBSCRIBE FOR FULL CONTENT

The Tax PublishersIT Appeal No. 44 of 2002
2012 TaxPub(DT) 0425 (Bom-HC) : (2012) 046 (I) ITCL 0377 : (2011) 243 CTR 0525 : (2011) 060 DTR 0199

INCOME TAX ACT, 1961

--Assessment--Prima facie adjustment under section 143(1)(a) Disallowance of claim of provision of bad and doubtful debts--The issue under consideration was whether the adjustment carried out by assessing officer regarding assessee's claim of deduction under section 36(1)(vii) in respect of provision for bad and doubtful debt was covered within the ambit of prima facie adjustment envisaged in section 143(10(a) or not. Held: Under the provisions of section 143(1)(a), the assessing officer is not entitled to allow or disallow the claim but can only make adjustment on a prima facie scrutiny of the return and the accompanying documents filed by the assessee. In the present case, Indeed, the assessing officer had disallowed the claim for deduction made by the assessee by going into the merits of the claim, which could have only been done by the process of assessment for which it would be necessary for the assessing officer to issue a notice and call for the particulars to enable them to assess or adjudicate the claim. That not having been done, assessing officer travelled beyond the scope of the powers conferred upon him by section 143(1)(a) of the Act and thus wrongly disallowed the claim itself.

Income Tax Act, 1961 Section 143(10(a)

IN THE BOMBAY HIGH COURT

S.A. BOBDE & F.M. REIS, JJ.

CIT v. Phil Corporation Ltd. & Anr.

IT Appeal No. 44 of 2002

28 June, 2011

In favour of: Assessee

Appellantby : Asha Dessal

Respondentby : M.S. Sonak,

JUDGMENT

Sla. Bobde, J.

This appeal was admitted on the following substantial question of law :

'A. Whether on the facts and in the circumstances of the case, the Tribunal was justified in deleting the prima facie adjustment of Rs. 9,00,000 on account of provision for doubtful debt carried out by the assessing officer in the light of the Explanation added to section 36(1)(vii) by Finance Act, 2001 with retrospective effect from 1-4-1989 ?'