- (1.) We have heard Sri R.K. Upadhyay, learned counsel for the appellant-revenue. Sri Rupesh Jain appears for the respondent-assessee.
(2.) This Income Tax Appeal is directed against the judgement and order dated 22.06.2000, passed by the Income Tax Appellate Tribunal in ITAT No. 1378/Del/1990, relating to Assessment Year 1997-98. The department has preferred the appeal, on the following questions of law.- "1. Whether on the facts and in the circumstances of the case, the ld. ITAT is legally justified in allowing the assessee's appeal against the prima facie adjustment made by the AO in respect of various deductions/exemptions/claims made in the return in Income without furnishing requisite material along with the return "2. Whether on the facts and in the circumstances of the case, the learned ITAT is legally justified in allowing relief to the assessee holding that the ld. CIT (A) cannot call for additional details and also cannot set aside the claimed deduction to the AO for further verification in a case u/s 143 (I) (a) -
(3.) Brief facts giving rise to the appeal, are that the assessee company filed its return of income, for the assessment year 1997-98 under Section 139 of the Income Tax Act 1961, on which assessment was made under Section 148 (1) of the Act. The AO in his explanatory sheet for adjustment under Section 143 (1) (a) of the Act, adjusted deduction under Section 80-G claimed at Rs.22,25,000/- u/s 143 (1) (a); the deduction u/s 80-HH was allowed with reference to gross total income and not with reference to the income of the undertaking, as claimed. The other income of Rs.6,63,12,862/- was excluded from the gross total income while working out the deduction u/s 80-HH. The deduction u/s 10-B was not allowed on the ground that copy of approval of the Board appointed by the Central Government in exercise of the powers conferred by Section 14 of the Industries (Development and Regulation) Act 1951, was not filed along with the return of income, and further the copy of balance sheet indicated that no separate unit, which may be called as newly established 100 % export oriented undertaking had come in existence, and as such the conditions under sub-section (2) of Section 10-B are not fulfilled. So far as deduction u/s 80 HHC, the AO found that, as held by CIT (A) Meerut in Appeal No. 389/97-98/MRT dated 25.3.1998, the other income should be excluded for computing the profit u/s 80 HHC. For deduction u/s 43-B, it was observed that Section 44-AB stipulates to get the accounts of relevant previous year audited by an Accountant before the specified date (i.e. 30th September) and furnish by that date the report of such audit in the prescribed form duly signed and verified by such accountant. Since the certificate submitted by the assesseee was from the accountant, who had not audited the previous year accounts, the AO disallowed the deduction claimed u/s 43 B at Rs.55.70,649/- For royalty debited to the accounts at Rs.10.28,768/-, it was found that as per the tax audit report, the royalty paid to M/s. Rank Xerox Ltd was at Rs.6,35,74,471/-, and that as per Schedule-IX of the current liabilities and provisions of the audit report do not indicate any tax deduction at source against royalty. He found that the actual sum paid as per the tax audit report is admissible for deduction; the balance amount of Rs.3,93,18,227/- was adjusted u/s 143 (1) (a). The Income as per section 115-JA was calculated at Rs.9,15,92,162/-, and tax @ 30 % on the said amount was worked at Rs.2,74,77,648/. The AO then held that the income of Rs.10,91,500/-, worked out under Sections 28 to 43, is charged to tax, as the same is more than the income worked out u/s 115-JA. The AO directed to charge additional tax and interest u/s 234-B and 234-C, and interest u/s 201 of the Act.;