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Facts
The assessee appealed against an order of the CIT(A) that confirmed an adjustment of Rs.5.94 Lacs to the returned income for AY 2021-22. This adjustment stemmed from an intimation by CPC u/s 143(1) proposing adjustments related to incorrect reduction from business income, specifically concerning profit on sale of investments and car, which the assessee contended were properly accounted for under other heads of income or capital gains.
Held
The Tribunal observed that CPC had largely accepted the returned income and that profit on sale of investments had been correctly offered and accepted under the head capital gains. Therefore, the adjustment of Rs.5.94 Lacs confirmed by the CIT(A) was deemed unwarranted. The tribunal deleted the adjustment sustained in the impugned order.
Key Issues
Whether the adjustments made by CPC and confirmed by CIT(A) relating to reduction of business income and profit on sale of investments were valid under the provisions of the Income Tax Act.
Sections Cited
143(1), 143(1)(a)(ii), 43B, 154, 34(4)
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Income Tax Appellate Tribunal, ‘DB’, AMRITSAR BENCH, AMRITSAR
Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI UDAYAN DAS GUPTA, JM
(िनधा�रण वष� / Assessment Year: 2021-22) The Straw Board Manufacturing ITO Company Ltd Ward 1 बनाम/ Vs. C/o Lala Shri Chunilal free hospital Hoshiarpur. Bajwara, Hoshiarpur – 146 023 �थायीलेखासं./जीआइआरसं./PAN/GIR No. AAACT-5095-K (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/Appellant by : Sh. Sandeep Vijh (CA) –Ld.AR ��थ�कीओरसे/Respondent by : Sh. Charan Dass (CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 04-08-2025 घोषणाकीतारीख /Date of Pronouncement : 21-08-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2021-22 arises out of an order of Ld. Addl. / Joint Commissioner of Income Tax (Appeals), Kolkata [CIT(A)] dated 26-03-2024 in the matter of an intimation issued by CPC u/s. 143(1) of the Act on 22-11-2022 proposing certain adjustment of Rs.6.58 Lacs to the returned income of the assessee. The Ld. CIT(A) confirmed adjustment of Rs.5.94 Lacs against which the assessee is in further appeal before us. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under.
In intimation u/s 143(1), CPC observed incorrect claim u/s 143(1)(a)(ii). The assessee computed the claim at Rs.10,35,757/- whereas CPC computed the same at Rs.3,77,305/- and thus, variation of Rs.6,58,452/-was noted. It was observed in the intimation that the assessee reduced amount of Rs.10,35,757/- from business income on the ground that the same was considered under other heads of income. However, only an amount of Rs.3,77,305/- was considered under other head of income and thus, there was incorrect reduction of business income to the extent of Rs.6,58,452/-. The CPC also proposed another adjustment u/s 43B for Rs.1,04,952/-. However, total income as computed by the assessee was accepted by CPC without making these adjustments.
Apprehending any possible rectification u/s 154, the assessee preferred first appeal against the same. It was pointed out that the figure of Rs.10,35,757/- comprised-off profit on sale of car for Rs.1,55,250/- and profit on sale of investment for Rs.8,83,237/-. The investments were considered under the head capital gains whereas the sale proceeds of car were reduced from gross block of assets as per the scheme of the Act. The assessee thus submitted that there was no error in the computation of income as pointed out by CPC. The Ld. CIT(A) partially concurred with assessee’s submissions on profit on sale of car. However, on capital gains, it was observed that out of Rs.8,83,237/-, the assessee could reconcile difference of Rs.2,88,840/-