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2022 (4) TMI 1564 - AT - Income TaxAllowability of making new claim made in return filed u/s 153A - disallowance of the carry forward of business loss - assessee had not claimed loss in the return of income filed u/s 139(1) of the I.T. Act, but claimed losses when filing the return u/s 153A - HELD THAT:- Assessments were not abated, and the claim of business losses admittedly emanated from incriminating material i.e the foreign bank account of the assessee. Income from incriminating material is to be considered after defraying all expenses that are incurred for earning such income. The decision of CIT vs Piara Singh [1980 (5) TMI 2 - SUPREME COURT] is relevant for the same. The business losses therefore qualified as being in the nature of Income from incriminating material required to be assessed to tax in such cases. There is no provision of law, pointed out to us, debarring claim of expenses or losses emanating from incriminating material. To put it otherwise, there is no provision of law requiring only positive incomes emanating from incriminating material to be disclosed/added to the incomes of the assessee in assessment framed u/s 153A of the Act denying claim of expenses and losses emanating therefrom. The legislature, we are aware has debarred claim of losses/expenses against incomes assessed u/s 68/69/69A /69B/69C of the Act specifically so providing u/s 115BBE of the Act, which provides for levy of taxes at special rates on such incomes. The returns filed u/s 153A of the Act disclosing losses emanating from incriminating material is therefore as per law to be treated as filed in returns u/s 139 of the Act and entitled to be set off against profits from such incriminating material in subsequent years. And to this extent of set off, they certainly do not qualify as fresh claim made in return filed u/s 153A of the Act, since they were necessarily to be disclosed at the same time and alongwith the positive incomes arising from the incriminating material. These losses cannot be considered in isolation from the profits to qualify as” fresh claim”, not originally claimed in the return filed u/s 139 of the Act. We may clarify that set off of these business losses from any other income originally returned, other than profits from this business, would have qualified as a fresh claim and to which the assessee would not be entitled. The proceedings u/s 153A of the Act, being in consequence to search undertaken u/s 132 of the Act, cannot be utilized by the assessee to seek relief not claimed earlier. The proceedings are analogous to proceedings u/s 147 of the Act, as being for the benefit of the Revenue and not the assessee. The decision of the Hon’ble apex court in the case of CIT vs Sun Engineering Works Pvt. Ltd. [1992 (9) TMI 1 - SUPREME COURT] is relevant for the purpose. Having held so, that the claim of losses emanating from incriminating material, made in returns filed u/s 153A of the Act are to be treated as filed u/s 139 of the Act and noting that the said returns undisputedly were filed within the stipulated time, the assessee, we hold, was entitled to the benefit of carry forward and set off of the same in subsequent years, as per law. The findings of the Ld. CIT(A) in this regard are also upheld. The order of the Ld. CIT(A) deleting the disallowance of losses and their carry forward and set off, in the assessment years before us, is therefore upheld. Ground of appeal No. 1 of the Revenue is dismissed. Addition u/s 68 - Credits in the foreign bank account of the assessee unexplained - Addition deleted by the ld. CIT(A) - HELD THAT:- As noted from the order of the Ld. CIT(A), filed all explanations regarding the credits in the bank account which were noted by the CIT(A) as relating to transactions in securities, dividend income, interest, distribution etc. The assessee also filed portfolio statements and calculation of profits and reconciled the figures in the bank statement with the profits /losses computed and returned in the income filed by the assessee u/s 153A of the Act. Assessee also filed evidences showing declaration of certain credits in the bank account, under the Black Money Act as also evidences of certain credits wrongly given being reversed subsequently by the Bank. Each and every entry was so explained by the assessee as having been duly accounted for and returned as business income or disclosed under the Black Money Act or wrongly credited and thus subsequently reversed by the Bank. After thoroughly examining these evidences and reconciliations, the Ld. CIT(A) has accepted the plea of the assessee that the said entries could not be taxed as unexplained, having been returned as business income or explained otherwise. All these evidences were also filed before us in voluminous paper book. The Ld. DR was unable to point out any infirmity in the finding of the Ld.CIT(A). He was unable to point out any credit entry wrongly accepted by the Ld.CIT(A) as duly explained. Thus no merit in the ground raised by the Revenue for treating the impugned credits as unexplained and thus taxable u/s 68 - Decided against revenue.
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