2011 (6) TMI 187

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....f the explanation added to Section 36(1)(vii) by Finance Act, 2001 with retrospective effect from 1.4.1989 ?"   2. Mr. Sonak, learned Counsel for the respondent no.1, submitted that the substantial question of law was framed at the time of admission without hearing the respondents and does not address the main issue involved in the case. According to learned Counsel, the substantial question of law may said to arise in the matter ought to have the following :   "Whether on the facts and in the circumstances of the case, the ITAT was right in holding that the adjustment carried out by the Assessing Officer in relation to assessee's claim for provision of bad and doubtful debt is clearly outside the ambit of prima facie adjust....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....clearly outside the ambit of prima facie adjustment envisaged in Section 143(1)(a) of the Income Tax Act, 1961 and that the Assessing Officer did not have sufficient material to hold that the said claim was inadmissible. The ITAT held that 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. Section 143(1)(a) if read for the assessment year 1993-1994 which reads as follows :   "143(1)(a) Where a return has been made under Section 139, or in response to a notice under subsection (1) of Section 142- (i) if any tax or interest is found due on the basis o....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he said adjustments".   7. Mr. Sonak, learned Counsel for respondent no.1, relied on the interpretation of the provision by the Division Bench of this Court in the case of Khatau Junkar Limited and another V/s K. S. Pathania and another, reported in 1992 (1) Bom. C.R. 550 wherein at para 7, this Court observed as follows :   "7. On a plain reading of Section 143(1)(a) of the Act, therefore, it is clear that if on the basis of the return which is filed by the assessee, any tax or interest is found due after adjustments, as set out in the section, an intimation shall be sent to the assessee specifying the sum so payable. Similarly, if any, refund is due to the assessee, on the basis of such return, it shall be granted to the a....