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The Andhra Pradesh High Court in the case of CIT v. Bakelite Hylam Ltd. (107TAX429) held that the assessing officer during the course of framing an assessment u/s 143(3) is entitled to look into claims of the assessee for deduction etc., and in the event the income is determined at a figure lower than the returned income then to so grant refund if any in favour of the assessee. In interpreting clause (b) of sub-section (4) of section 143 the Court held that we cannot borrow a different meaning than the one intended by the legislature to say that the legislature did not visualize a situation permitting the assessing authority to grant refund also under regular assessment in favour of the assessee. It further held that had it been the intention of the legislature to prevent the assessing authority from granting refund to the assessee, then the insertion of sub-section (4) to section 143 would lose its significance. Moreover the Court held that the restrictive instruction dated 31.10.89 cannot overweigh the statutory provisions of the Income-tax Act.

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