TaxTMI 
TaxTMI 
TaxTMI 
2019 (10) TMI 728
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....1961. 2. That the ld. CIT(A) has erred in law by confirming the addition of Rs. 85,000/- u/s. 69 being the amount of cash found with an employee of the appellant from his residence at the time of search operation. 3. That the ld. CIT (A)has erred in law by directing that the depreciation for the year under reference shall not be available for set off against addition confirmed u/s. 69 as above and directing the same to be carried forward for set off in succeeding years as the ld. CIT(A) did not have powers to issue such directions, which are against the express provisions of law. 4. That the ld. CIT(A) has erred in law as well as on the facts of the case by confirming the additions as above ignoring appellant's submissions to the effect that the appellant company was under erection and the total additions related to the period before commencement of its business w.e.f. 01.03.2011 as before that date the appellant could not be assumed to have earned any income from any source." 2. The facts in brief are that the assessee-company is engaged in the hotel business. A search and seizure operation was carried out in the premises of the assessee in Meerut on 09.09.2010 and in Goa. ....
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....efore him. 5. Before us, ld. counsel for the assessee, Mr. Sandeep Sapra, submitted that the addition was made u/s. 40A (3) and Ld. CIT(A) without giving opportunity to the assessee has confirmed the same u/s.69. Accordingly, such an addition is beyond the scope of powers of Ld. CIT (A). On merits, he submitted that the seized material/documents, on the basis of which addition has been made, was found from 1266/B, 2nd Floor, San Paulo, Opposite Cafe Coffee Day near football ground, Candolim, North Goa which happened to be the residence of Sh. Mandeep Singh and not from the premises of the Assessee-Company. During the course of assessment proceedings, it was submitted that Shri Mandeep Singh was an employee of the Assessee-Company but carried out his own independent construction business also. Therefore, the seized documents could not be recorded as books of accounts of the Assessee-Company as neither the name nor the stamp of the Assessee -Company is there in the said documents. 6. Further, authorities below have not brought any evidence on record to prove that the cash payment received by Shri Mandeep Singh were unaccounted investments of the assessee-company nor there was anyth....
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....examine said witness must follow that assessee had accepted said witness and commission payments were rightly disallowed 3. Roger Enterprises P. Ltd. v. CIT f20161 67 taxmann.com 344 (Delhi)/(2016) 238 Taxman 434 (Delhi)/(2016) 382 ITR 639 (Delhi) Delhi High Court held that where evidence of one of two witnesses was by itself sufficient to draw adverse inference against assessee that commission payments made by it were fictitious and assessee declined to cross-examine said witness on ground that it had to be preceded by cross-examination of other witness, it must follow that assessee had accepted said witness and commission payments were rightly disallowed." 9. We have heard the rival submissions and also perused the relevant findings given in the impugned orders as well as material referred to before us. The impugned addition relates to addition of Rs. 26,68,500/- made u/s 69 based on seized documents found from 1266/B, 2nd Floor, San Paulo, Opposite Cafe Coffee Day near football ground, Candolim, North Goa, which is a residence of Sri Mandeep Singh. These seized annexure referred to certain cash payments received by Shri Mandeep Singh which has been treated to be as unexplai....
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....l position, he is directed to calculate the depreciation allowance as per section 32(1) read with Explanation 5 of the Act." However, Ld. CIT (A) has held that this loss will not be available of set off against the addition confirmed u/s.69. 10. As pointed out by the Ld. Counsel CBDT Circular No.11/2019 dated 19th June, 2019, has clarified regarding non available of set off loss against the deemed income u/s.115BBE prior to the Assessment Year 2017-18. The relevant circular reads as under:- Circular No. 11 /2019 Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes North-Block, New Delhi, dated the 19th of June, 2019 Subject: Clarification regarding non-allowability of set-off of losses against the deemed income under section 115BBE of the Income-tax Act, 1961 prior to assessment-year 2017-18-reg. With effect from 01.04.2017, sub-section (2) of section 115BBE of the Income-tax Act, 1961 (Act) provides that where total income of an assessee includes any income referred to in section(s) 68/69/69A/69B/69C/69D of the Act, no deduction in respect of any expenditure or allowance or set off of any loss shall be allowed to the assessee unde....