Tribunal allows appeal for 2014-15 assessment, finds PCIT's order revising assessment not sustainable.

The Tribunal allowed the appeal for the assessment year 2014-15, holding that the Principal Commissioner of Income Tax's order revising the assessment was not sustainable in law as the provisions of section 115BBE were not applicable for that year. The Tribunal determined that the assessee was entitled to claim set-off of losses against income determined under section 115BBE, as supported by a decision from the Jaipur Bench of the ITAT. Consequently, the Tribunal quashed the PCIT's order as contrary to the law and the ITAT decision.

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Issues:
1. Revision of assessment order under section 263 of the Income Tax Act, 1961.
2. Applicability of provisions of section 115BBE regarding set-off of losses against income.

Analysis:

Issue 1: Revision of assessment order under section 263 of the Income Tax Act, 1961
The appeal was filed against the order passed by the Principal Commissioner of Income Tax (PCIT) revising the assessment order passed by the Assessing Officer (AO) under section 143(3) of the Act for the assessment year 2014-15. The PCIT revised the order on the grounds that the AO allowed set off of losses against income determined under section 68 of the Act in violation of section 115BBE. The assessee challenged this revision on the basis that the provisions of section 115BBE were not applicable to their case as the amendment was effective from the assessment year 2017-18 onwards. The Circular issued by the CBDT clarified that the amendment in section 115BBE(2) was applicable from the assessment year 2017-18 onwards. The Tribunal held that since the amendment was not applicable for the assessment year 2014-15, the PCIT's order revising the assessment was not sustainable in law.

Issue 2: Applicability of provisions of section 115BBE regarding set-off of losses against income
The Tribunal analyzed the provisions of section 115BBE and the Circular issued by the CBDT to determine the applicability of the set-off of losses against income determined under section 115BBE of the Act. The Circular clarified that the term "or set off of any loss" was inserted via the Finance Act, 2016, effective from 01.04.2017, allowing an assessee to claim set off of losses against income determined under section 115BBE until the assessment year 2016-17. Since the appeal pertained to the assessment year 2014-15, the assessee was entitled to claim set off losses against income determined under section 115BBE. The Tribunal also referred to a decision by the Jaipur Bench of the ITAT, which supported the assessee's claim for set-off of current year business loss against current year income under the head "Income assessed from other sources." The Tribunal concluded that the PCIT's order was contrary to the provisions of the Act and the decision of the Jaipur Bench of the Tribunal, and therefore, allowed the appeal and quashed the order passed by the PCIT.

In conclusion, the Tribunal allowed the appeal filed by the assessee for the assessment year 2014-2015, holding the PCIT's order as not sustainable and bad in law.

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