TMI Blog2020 (1) TMI 909X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing the income u/s 68 of the Act cannot be held to be justified Set off of loss from one head against income from another - Set off of losses against deemed income u/s 68 - As per the section 71(1) of the Income Tax Act, losses, from one head can be set off against the income from another head of income. This controversy has been settled by the CBDT Circular No. 11 of 2019 dated 19.6.2019, wherein it has been provided that even if the said income is treated as an income assessed u/s 68 of the Act, still the assessee is entitled to set off of the said income against the business loss - There is no merit in the action of the lower authorities in making the impugned additions and not allowing the set off of income from commodity transactions as business losses of the assessee. Accordingly, the impugned order of the CIT(A) is set aside and the additions made by the lower authorities is ordered to be deleted. - Decided in favour of assessee. - ITA No. 667/CHD/2017 And ITA No. 258/CHD/2018 - - - Dated:- 20-12-2019 - Shri N.K. Saini, Vice President And Shri Sanjay Garg, Judicial Member For the Assessee : Sh. Sudhir Sehgal, Advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t considering that the assessee company is a Pvt. Ltd. Company dealing in Iron Steel and the accounts of the assessee is subject to audit under the companies Act 1956 as well Tax audit u/s 44AB of the Income Tax Act. The Accounts were duly audited by the Chartered Accountant and no adverse findings has been given by the Assessing Officer during the scrutiny assessment u/s 143(3), though, the Assessing Officer called for various details of commodity profit income credited in the books of accounts of the assessee company, no defects have been pointed out in the books of accounts maintained by the appellant. 7. That the CIT(A) has failed to appreciate the fact that all the three ingredients i.e. identity, credit worthiness and genuineness of transaction has been proved by the assessee and, as such, sustaining of addition is not called for. 8. That the addition of ₹ 1,74,10,040/- as above has been upheld against the facts and circumstances of the case. 9. That the Appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 3. The sole issue raised by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany provided the following Details: 1. The firm is owned by Abhindan Sharma as proprietor 2. Broker maintaining bank account with Central bank of India, Madhok Complex, Ferozepur Road, Current Account No. 3165427289 3. Broker maintaining bank account with State bank of India, Ferozepur Gandhi market, Current Account No. 30820570962 4. The broker having office at LSE Building, Feroze Gandhi Market, Ludhiana during the year under consideration and later on shifted to office at 1172, Karnal Gurdial Singh Road, Civil Lines, Ludhiana as provided by the bankers of the brokers (copy of bank account enclosed at page 6 of the paper book) 5. Document provided by the Central bank of India, Madhok Complex, Ferozepur Road, Ludhiana:- i) Copy of PAN of the Proprietor ii) Copy of Rent deed iii) Copy of Voter's Identity Card of the Proprietor iv) Copy of Driving license of the Proprietor (all enclosed at Page 7 of the Paper Book) 6. Documents provided by the State bank of India, Stock Exchange, Feroze Gand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rokers had not appeared in response to the summons sent by the Assessing Officer that itself cannot be the sole ground to reject the entire evidence produced by the assessee. The assessee not only furnished the names and addresses of the brokers and the other concerned parties but also the other details like their PAN numbers, bank account details and even the trading license, telephone bills and other evidences as detailed above. The assessee has also produced the details of the commodity transactions carried out by the assessee alongwith purchase and sales invoices. Under the circumstances, the action of the lower authorities in assessing the income u/s 68 of the Act cannot be held to be justified. Even as per the section 71(1) of the Income Tax Act, losses, from one head can be set off against the income from another head of income. The provisions of section 71(1) are reproduced as below:- Set off of loss from one head against income from another. 71. (1) Where in respect of any assessment year the net result of the computation under any head of income, other than Capital gains , is a loss and the assessee has no income und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17-18 onwards, conflicting views have been taken by the Assessing Officers in assessments for years prior to assessment year 2017-18. The matter has been referred to the Board so that a consistent approach is adopted by the Assessing Officers while applying provision of section 115BBE in assessments for period prior to the assessment year 2017-18. 3. The Board has examined the matter. The Circular No. 3/2017 of the Board dated 20th January, 2017 which contains Explanatory notes to the provisions of the Finance Act, 2016, at para 46.2, regarding amendment made in section 115BBE(2) of the Act mentions that currently there is uncertainty on the issue of set-off of losses against income referred to in section 115BBE. It also further mentions that the pre-amended provision of section 115BBE of the Act did not convey the intention that losses shall not be allowed to be set-off against income referred to in section 115BBE of the Act and hence, the amendment was made vide the Finance Act, 2016. 4. Thus keeping the legislative intent behind amendment in section 115BBE(2) vide the Finance Act, 2016 to remove any ambiguity of interpretation, the Board is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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