JOINT COMMISSIONER OF INCOME TAX Vs. KALPANA AGENCIES

JUDGEMENT

(1.) THE appeal is preferred against the order of the Income tax Appellate Tribunal Madras Bench "a" dated 19. 03. 2003 in i. T. A. No. 939/mds/2000, where the Tribunal has confirmed the order of the commissioner of Income Tax (Appeals), who found that the order of assessment passed by the assessing officer by adding 90% of the interest income received in a sum of Rs. 4,63,840/- as an excess deduction claimed under Section 80 HHC is not correct, while making prima facie adjustment under Section 143 (1) (a) of the Income Tax Act, 1961. THE assessee carried that assessment order on appeal to the Commissioner of Income Tax (Appeals), who found that the assessment has been made not in accordance with the provisions of Section 143 (1 ) (a) and while making the assessment under that provision, the assessing officer exceeded his jurisdiction. That order has been confirmed by the Tribunal, against which the present appeal is preferred raising the following substantial questions of law. "1. Whether in the facts and circumstances of the case, the Tribunal was right in holding that the addition made on account of excess deduction claimed under Section 80hhc in respect of interest included in the profit of the business is not correct" 2. Whether in the nature and circumstances, the appellate tribunal has right in holding that there was a debatable issue involved in respect of the addition made and therefore the addition was beyond the scope of section 143 (1 ) (a) of the Income Tax

(2.) LEARNED Senior Standing Counsel appearing for the department tried to persuade this Court that the issue with regard to the deduction of 90% of interest received is not a debatable issue and it is a settled issue. When the issue on the claim under Section 80hhc has already been settled, that can very well be taken into consideration by the assessing officer, while making the assessment under Section 143 (1 ) (a) of the Act. A catena of decisions of this Court as well as the Supreme Court clearly ruled that the power vested on the assessing officer under Section 143 (1 ) (a) of the Act is only making a prima facie adjustment on the basis of the returns and documents filed and he cannot import something into it on the basis of the issues that have already been settled.