Debatable club membership expense cannot be disallowed through a prima facie adjustment when partial rectification relief shows the issue is not apparent.

A club membership subscription disallowance could not be sustained as a prima facie adjustment under section 143(1) where the later rectification under section 154 had already granted partial relief on the same expenditure. The partial allowance showed that the issue was debatable and not an undisputed arithmetical or apparent error capable of summary adjustment. On that basis, the disallowance was deleted.

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Issues: Whether disallowance of club membership subscription could be sustained in an intimation under section 143(1) of the Income-tax Act, 1961 when the same authority had later granted partial relief in rectification under section 154, indicating that the matter was debatable.

Analysis: The adjustment made in the intimation was based on expenditure reflected in the audit report but not considered in the returned income. However, the subsequent rectification order partly allowed the related club expenditure, showing that the issue was not amenable to a straightforward prima facie adjustment under section 143(1). The partial relief already granted demonstrated that the matter involved a debatable claim rather than an undisputed arithmetical or apparent error.

Conclusion: The disallowance of the club membership subscription was unsustainable and was deleted.

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