Bombay High Court
Adamas Gem Industries Limited And ... vs Smt. Neela Krishnan, Assistant ... on 24 August, 1992
Equivalent citations: [1993]203ITR737(BOM)
Author: Sujata Manohar
Bench: B.N. Srikrishna, Sujata V. Manohar
JUDGMENT
Mrs. Sujata Manohar J.
1. This petition challenges the validity of an intimation dated February 20, 1991, issued under section 143(1)(a) of the Income-tax Act, 1961. The relevant assessment year is 1990-91. By this intimation, the first respondent has adjusted the total income returned by the petitioners by adding a sum of Rs. 2,25,000.
2. In January, 1989, the petitioners had entered into an agreement with one Jayantilal Mohanlal Shah for purchase of office premises at Nariman Bhavan for a consideration of Rs. 1,75,00,000. Under the terms of the agreement, the sale was to be completed, in any event, not later than April 30, 1989. The sale, however, was completed on November 15, 1989. In respect of this delay in completion of the sale, by an agreement between the parties, the petitioners were paid by the vendor a sum Rs. 2,25,000. The first respondent has sought to add the sum of Rs. 2,25,000 to the income of petitioners for the assessment Year 1990-91.
3. Under section 143(1)(a), proviso, clause (iii), in computing the tax payable by, or refundable to, the assessee, any los carried forward, deduction, allowance or relief claimed in the return which, on the basis of the information available in such return, accounts or documents, is prima facie, inadmissible, shall be disallowed. The present adjustment does not fall within the parameters of this proviso. [See in this connection a decision by a Division Bench of this court to which one of us (Mrs. Sujata Manohar J.) was a party in the case of Khatau Junkar Ltd. v. K. S. Pathania [1992] 196 ITR 55]. The first respondent, therefore, had no jurisdiction to adjust the sum of Rs. 2,25,000 at the stage of intimation under section 143(1)(a) of the Income tax Act, 1961. The intimation dated February 20, 1991, is, therefore, set aside. The claim for additional tax under section 143(1A) is also set aside and the respondents are directed to send a fresh intimation under section 143(1)(a) in accordance with law and in the light of the ratio of the above judgment.
4. Rule is made absolute accordingly.