TMI Blog2020 (12) TMI 662X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case and in law, the CIT(A) erred in confirming the addition of ₹ 4,54,551, made by the Assistant Commissioner of Income Tax - 12(2)(2), Mumbai ('the AO'), to the total income of the Appellant under section 69A of the Act. 1.2 He failed to appreciate and ought to have held that the account does not belong to the Appellant and that it did not have knowledge about the current account and the fixed deposit account allegedly standing in its name with Oriental Bank of Commerce, or as to who have even opened that account in its name. 1.3 The Appellant, prays that the addition of ₹ 4,54,551 made by the AO under section 69A of the Act be deleted. Without prejudice to Ground I Ground II: Total income referred to in section 115BBE(1) of the Act is the positive amount if any, arrived at after setting of income of the nature referred to in Section 69A against business loss of the current year 2.1 On the facts and circumstances of the case and in law, and without prejudice to the foregoing ground, the CIT(A) erred in holding that income-tax is to be calculated @ 30% on addition made under section 69A of the Act, though the said additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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/69B/69C/69D, in some cases, set off of losses against the additions made under section 115BBE(1) of the Act have not been allowed. As the amendment inserting the words 'or set off of any loss' is applicable with effect from 1st of April, 2017 and applies from assessment year 2017-18 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 Explanato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jasthan High Court held that amendment made by Finance bill, 2016 to provisions of section 115BBE providing that no set off of any loss be allowed to assessee against deemed income under sections 68, 69, 69A to 69D could not be applied retrospectively. 10. In the case of Vijaya Hospitality and Resorts Ltd., v. CIT [419 ITR 322] the Hon'ble Kerala High Court considered a situation where the assessee had set off the deemed income i.e. unexplained cash credits addition made u/s. 68 of the Act against carryforward losses being unabsorbed depreciation for the A.Y. 2013-14 and the Hon'ble High Court considering various decisions held as under: - 14. Based on the rival contentions, on analyzing the factual situation, it is evident that the assessment pertains to the period from 1st April 2013 to 31st March 2014. It is not in dispute that the addition of ₹ 56,24,264/- made in the assessment is undisclosed income coming within the purview of Section 68, it being a sum found credited in the books of the assessee with respect to which the explanation offered was not found to be satisfactory by the Assessing Officer. Since Section 115BBE was introduced with effect from 01 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be of receipt from business. The decisions of the High Court of Madras in Chensing Ventures (supra) as well as the decision of the High Court of Gujarat in Shilpa Dyeing Printing Mills (supra) are to the effect that income of such nature from undisclosed source need to be treated as income from other sources. Therefore, we are of the opinion that the undisclosed income assessed under Section 68 need not be treated as an income falling totally outside the ambit of the classifications contained in Section 14 of the Act. Even assuming for the sake of argument that, it will not fall within the classifications contained in Section 14, it is evident that, as on the date of the assessment such income was included under a special classification by virtue of Section 115BBE. It is pertinent to note that, 115BBE had prohibited allowance of deductions alone, as it stood unamended as on the relevant date of the assessment. The explanatory notes to the provisions of the Finance Act, 2016 enumerates the reasons for introduction of the further amendment barring the set off, with effect from 1.4.2017. It is stated that, Currently, there is uncertainty on the issue of setoff of losses agai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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