Set-off of losses allowed against deemed income under section 69C before section 115BBE introduction

ITAT Nagpur ruled in favor of the assessee regarding set-off of losses against deemed income under section 69C. The AO had denied set-off claiming deemed income doesn't fall under any category in section 14. The tribunal held that SC precedents establish all income must be classified under section 14 heads, with deemed income from undisclosed sources assessable as "income from other sources." Since section 115BBE prohibiting such set-off was introduced only from AY 2017-18, the tribunal directed AO to allow set-off of losses against deemed income under section 69C.

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Issues:
The appeals filed by the assessee against orders of ld. Commissioner of Income Tax (Appeals) for assessment years 2011-12 to 2014-15.

ITA No.85/NAG/2018, A.Y. 2011-12:
The appellant, a company engaged in land business, filed a return showing a loss. Subsequently, after search operations, a notice was issued for filing a return of income. The appellant disclosed unexplained expenditure as income under section 69C. The Assessing Officer denied set-off of loss against this income, citing it doesn't fall under any income category. The CIT(A) upheld this decision. The appellant argued that recent court decisions allowed such set-off. The Tribunal agreed, citing legal precedents and the absence of a bar pre-amendment to section 115BBE. The lower authorities were deemed to have erred, and the set-off was allowed.

ITA Nos.86, 87 & 210/NAG/2018, A.Ys. 2012-13 to 2014-15:
The facts and issues in these appeals were identical to the first appeal. The decision in the first appeal was applied to these, and the set-off of losses against deemed income under section 69C was allowed.

In conclusion, all four appeals of the assessee were allowed based on the above reasoning.

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