In Brief
The Rajasthan State Electricity Board filed its income tax return for 1991-92 claiming a loss, but erroneously claimed 100% depreciation instead of the lawful 75% due to a bona fide oversight. The tax authority disallowed 25% of the depreciation and demanded additional income tax under Section 143(1-A). The Supreme Court held that Section 143(1-A)—which imposes 20% additional tax when adjustments increase income or reduce loss—applies only when the assessee intentionally attempted to evade tax. Since the assessee's error was bona fide, claimed no evasion intent could be shown, and the assessee remained in loss even after the adjustment, the Court set aside the demand and allowed the appeal.
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