Appeals on Business Losses, Depreciation, Interest Disallowance, and Gross Profit

The assessee's appeals for assessment years 2012-13 & 2013-14 were partly allowed, specifically regarding the set off of business losses and depreciation on machinery. The Revenue's appeal for assessment year 2013-14 was partly allowed, contesting additions made on account of disallowance of interest in jewelry investment and gross profit from unaccounted sales. The judgments were delivered by Shri Sanjay Garg, Judicial Member, and Ms. Annapurna Gupta, Accountant Member of the ITAT Chandigarh.

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Issues:
1. Assessee's appeals for assessment years 2012-13 & 2013-14
2. Revenue's appeal for assessment year 2013-14

Analysis:

Assessee's Appeals (2012-13 & 2013-14):
- The appeals raised multiple grounds, including disallowance of set off of business losses, disallowance of depreciation on machinery, addition on account of funds invested by a company, and excess raw material consumption.
- The CBDT Circular No.11 of 2019 clarified that an assessee can set off losses against income determined under section 115BBE of the Act until assessment year 2016-17.
- As the assessment years were 2012-13 & 2013-14, the assessee was entitled to set off current year losses against deemed income. Consequently, Ground No.2 in both appeals was allowed in favor of the assessee.

Revenue's Appeal (2013-14):
- The Revenue's appeal contested the deletion of additions made on account of disallowance of interest in jewelry investment and gross profit from unaccounted sales.
- The CIT(A) upheld the deletion of the additions, stating that the income was already declared by the assessee during the search proceedings.
- The CIT(A) found the AR's arguments acceptable, emphasizing that once an addition is made for unrecorded sales, further additions for stock shortages or investment in stock are not warranted.
- Ground No.1 of the Revenue's appeal was allowed, while Ground No.2 was dismissed based on the CIT(A)'s reasoning.
- Ground No.3 of the Revenue's appeal was of a general nature and did not require specific adjudication.

In conclusion, both the assessee's appeals and the Revenue's appeal were partly allowed based on the specific issues raised and the interpretations of relevant legal provisions and circulars. The judgments were delivered by Shri Sanjay Garg, Judicial Member, and Ms. Annapurna Gupta, Accountant Member of the Appellate Tribunal ITAT Chandigarh.

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