TMI Blog2019 (10) TMI 728X X X X Extracts X X X X X X X X Extracts X X X X ..... business. However if one goes by the presumption under the law, then if the documents have not been found from the premises of the assessee, then presumption u/s.132(4A) r.w.s. 292C cannot be drawn against the assessee. Without going into the merits of the addition made u/s.69 and cash found with an employee of the assessee made u/s 68 of the Act, we find substance in the argument raised by the ld. counsel that said addition should be set off from the losses on account of depreciation and business loss. The said loss was claimed in the revised return and it consists of loss arising from depreciation put to use w.e.f. 01.03.2011 and business loss during the year. As per CBDT Circular No.11/2019 dated 19th June, 2019, Assessing Officer should allow the said loss against the addition made u/s.68/69 etc. and the amendment brought by the Finance Act, 2016 is w.e.f. 01.04.2017 and any denial of such set off is only applicable from the Assessment Year 2017-18; and assessment for the period prior to Assessment Year 2017-18, such set off would be allowed against income determined u/s.115BBE. Thus, in view of clear cut clarification by the CBDT, we hold that the addition made u/s. 69 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be assumed to have earned any income from any source. 2. The facts in brief are that the assessee-company is engaged in the hotel business. A search and seizure operation was carried out in the premises of the assessee in Meerut on 09.09.2010 and in Goa. During the course of search, certain documents were seized from Goa marked as Annexure A-3 and specifically pages 67 and 68, which contained details of payment received by Shri Mandeep Singh from Shri Jitendra Singh Bajwa and Shri Bhupendra Singh Bajwa, in cash during the period 26.09.2009 to 01.09.2010. A show cause notice was issued to the assessee as why the amount of ₹ 26,68,500/- given in cash to Shri Mandeep Singh which actually relates to assessee should not be added as income of the assessee for Assessment Year 2011-12. In response, assessee submitted that the hotel was at construction stage and no expenses has been claimed as deduction in the profit loss account and most importantly, the address mentioned in the seized annexure is the personal residence of Shri Mandeep Singh, who had independent construction business and the paper found from his premises relates to him. However, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not be recorded as books of accounts of the Assessee-Company as neither the name nor the stamp of the Assessee -Company is there in the said documents. 6. Further, authorities below have not brought any evidence on record to prove that the cash payment received by Shri Mandeep Singh were unaccounted investments of the assessee-company nor there was anything to prove that cash payments made by Shri Mandeep Singh to various parties were unaccounted investments of the assessee. Even during the course of post search inquiry, statement on oath of Shri Jitendra Singh Bajwa was recorded who was confronted with regard to cash payment received by Shri Mandeep Singh. He clearly submitted that he is not aware what Shri Mandeep Singh was writing in his books and denied such cash payments to Shri Mandeep Singh and no statement of Shri Bhupendra Singh Bajwa was recorded. No evidence was brought on record to prove that, either the seized material belonged to assessee-company or the receipts/expenses noted therein pertained to the assessee, therefore, no addition should be made. 7. Lastly, with regard to the addition of ₹ 26,68,500/- made u/s 69 as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We have heard the rival submissions and also perused the relevant findings given in the impugned orders as well as material referred to before us. The impugned addition relates to addition of ₹ 26,68,500/- made u/s 69 based on seized documents found from 1266/B, 2nd Floor, San Paulo, Opposite Cafe Coffee Day near football ground, Candolim, North Goa, which is a residence of Sri Mandeep Singh. These seized annexure referred to certain cash payments received by Shri Mandeep Singh which has been treated to be as unexplained payments/investments made by the assesseecompany in the construction of the hotel. From the documents placed in the paper book as well as observations noted in the impugned assessment order, it is an admitted fact that these seized documents was not found from the premises of the assessee company albeit it was from the premises of Shri Mandeep Singh in Goa, who was an employee of the assessee-company at the relevant time. The assessee had submitted that he had his own independent construction business also. However, neither the statement of Shri Mandeep Singh was recorded nor any evidence has been produced by the assessee that he carried on any independen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry of Finance Department of Revenue Central Board of Direct Taxes North-Block, New Delhi, dated the 19th of June, 2019 Subject: Clarification regarding non-allowability of set-off of losses against the deemed income under section 115BBE of the Income-tax Act, 1961 prior to assessment-year 2017-18-reg. With effect from 01.04.2017, sub-section (2) of section 115BBE of the Income-tax Act, 1961 (Act) provides that where total income of an assessee includes any income referred to in section(s) 68/69/69A/69B/69C/69D of the Act, no deduction in respect of any expenditure or allowance or set off of any loss shall be allowed to the assessee under any provisions of the Act in computing the income referred to in section 115BBE(1) of the Act. 2. In this regard, it has been brought to the notice of the Central Board of Direct Taxes (the Board) that in assessments prior to assessment year 2017-18, while some of the Assessing Officers have allowed set off of losses against the additions made by them under Section(s) 68/69/69A/698/69C/69D, in some cases, set off of losses against the additions made und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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