TMI Blog2021 (2) TMI 1081X X X X Extracts X X X X X X X X Extracts X X X X ..... income. As regards to applicability of section 115BBE of the Act, as clarified by the CBDT as provisions brought out by the Finance Act, 2016 in the statute book w.e.f. 01.04.2017, the same is prospective and not retrospective. Appeal of the assessee is allowed. - ITA No. 449/CHNY/2017 - - - Dated:- 16-2-2021 - Mahavir Singh , Vice President And G. Manjunatha , Member ( A ) For the Appellant : Y. Sridhar , CA For the Respondents : G. Chandrababu , Addl. CIT ORDER Per Mahavir Singh , VP This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals)-2, Chennai in ITA No. 3/CIT(A)-2/2014-15 dated 5.02.2016. The Assessment was framed by ACIT, Business Circle I, Chennai U/s. 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter 'the Act') for the A.Y. 2008-09 vide order dated 28.02.2014. The original order of the Tribunal was passed vide order dated 27.02.2018 and the same was challenged before the Hon'ble High Court of Madras. The Hon'ble High Court of Madras in TCA No. 722 of 2018, order dated 24.06.2019 directed the Tribunal vide para Nos. 6 to 10 as under:- 6. However, what weighed in the mind of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing and this appeal was called for hearing today. 2. The brief facts are that the assessee is an individual carrying on the business of bed roll suppliers to Southern Railway. The assessee filed his return of income for the relevant assessment year 2008-09 on 30.09.2008. A survey u/s. 133A of the Act, was conducted on the business premises of the assessee on 24.07.2009 and consequent to survey, assessment was framed u/s. 143(3) r.w.s. 147 of the Act. Consequent to survey, a sum of ₹ 75,00,000/- was offered as business income. A revised return was filed declaring loss of ₹ 1,78,03,450/- after adjusting the loss originally returned in the original return of income at ₹ 2,53,03,450/-. The AO during the course of assessment proceedings invoked the provisions of section 115BBE r.w.s 69C of the Act and made addition of ₹ 75,00,000/- due to non-availability of bills or evidences to support the purchases. Accordingly and practically, the expenses relating to purchase were disallowed by invoking the provisions of section 115BBE r.w.s 69C of the Act. Aggrieved, assessee preferred an appeal before CIT(A). CIT(A) also confirmed the action of the AO. It was the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 69D is taxable/at the rate of thirty per cent and further provides that no deduction in respect of any expenditure or allowances in relation to income referred to in the said sections shall be allowable 46.2 Currently, there is uncertainty on the issue of set-off of losses against income referred to in section 115BBE of the Income-tax Act. The matter has been carried to judicial forums and courts in some cases has taken a view that losses shall not be allowed to be set-off against income referred to in section 115BBE. However, the current language of section 115BBE of the Income-tax Act does not convey the desired intention and as a result the matter is litigated. In order to avoid unnecessary litigation, the provision of the sub-section (2) of section 115BBE of the Income-tax Act has been amended as to expressly provide that no set off of any loss shall be allowable in respect of income under the sections 68 or section 69 or section 69A or section 69B or section 69C or section 69D. 46.3 Applicability: This amendment takes effect from 1st of April, 2017 and will, accordingly, apply from assessment year 2017-18 and subsequent assessment years. 5. As regards to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the Assessing Officer made addition of ₹ 28,50,000/- as undisclosed income under Section 69 of the Act. Once the loss is determined, the same should be set off against the income determined under any other head of income in the assessment, no reasons were given by the Assessing Officer to deny the benefit of Section 71 of the Act. The benefit provided under Section 71 of the Act cannot be denied and the learned Standing Counsel appearing for the Revenue is also unable to explain or give reasons why the assessee is not entitled to the benefit of Section 71 of the Act. The reasons given by the Tribunal are based on valid materials and evidence and the same is in accordance with the provisions of Section 71 of the Act. We find no error or legal infirmity in the impugned order. 9. We may further notice that the decision in case of Fakir Mohmed Haji Hasan (supra) came-up for consideration in case of Radhe Developers India Ltd. (supra), it was observed as under: The decisions of this Court in the case of Fakir Mohmed Haji Hasan (supra) and Krishna Textiles (supra) are neither relevant nor germane to the issue considering the fact that in none of the decisions the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certained. The assessee is subject to income-tax on his total income though his income under each head may be well below the taxable limit. Hence the loss sustained in any year under any heads of income will have to be set off against income under any other head. In this case, the Assessing Officer made addition of ₹ 28,50,000 as undisclosed income under section 69 of the Act. Once the loss is determined, the same should be set off against the income determined under any other head of income. In the assessment, no reasons were given by the Assessing Officer to deny the benefit of section 71 of the Act. The benefit provided under section 71 of the Act cannot be denied and the learned standing counsel appearing for the revenue is also unable to explain or give reasons why the assessee is not entitled to the benefit of section 71 of the Act. The reasons given by the Tribunal are based on valid materials and evidence and the same is in accordance with the provisions of section 71 of the Act. We find no error or legal infirmity in the impugned order. 7. In view of the above, we are of the considered view that the provisions of section 69C of the Act, will apply but consequent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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