THE STRAW BOARD MANUFACTURING COMPANY LIMITED ,BAJWARA, HOSHIARPUR vs. INCOME TAX OFFICER WARD-1,HOSHIARPUR, HOSHIARPUR

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/-