TaxTMI 
TaxTMI 
2021 (2) TMI 1081
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....intained in the course of regular business. The assessment was reopened solely on the ground that under Section 115BBE of the Act having been brought into the statute book, the expenditure under Section 11BBE, etc. should be assessed separately. 7. At this juncture, it will be beneficial to refer to a recent circular issued by the CBDT in Circular No. 11 of 2019 dated 19.06.2019, wherein the Board has clarified on the following lines: "Thus keeping the legislative intent behind amendment in Section 11BBE(2) vide the Finance Act, 2016 to remove any ambiguity of interpretation, the Board is of the view that since the term 'or set off of any loss' was specifically inserted only vide the Finance Act 2016, w.e.f. 01.04.2017, an assessee is entitled to claim set-off of loss against income determined under Section 115BBE of the Act till the assessment year 2016-17." 8. Learned counsel appearing for the respondent/assessee referred to a decision rendered by Division Bench of this Court in Commissioner of Income Tax Vs. Chensing Ventures reported in [2007] 291 ITR 258 (Madras), wherein, the loss sustained by the assessee, in any year under, the heads of income was permitted as....
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....ce is explained, provisions of section 69C cannot be invoked. It was the claim of the assessee that the provisions of section 115BBE of the Act was brought on the statute book w.e.f. 01.04.2017 and the relevant assessment year involved is 2008-09. Hearing these arguments, the Tribunal deleted the addition and allowed the claim of the assessee. Aggrieved, Revenue preferred an appeal u/s. 216A of the Act, before the Hon'ble High Court of Madras and the Hon'ble Madras High Court has remanded the matter back to the file of the Tribunal only on the issue, whether the provisions of section 115BBE of the Act is prospective or retrospective in nature, particularly in view of the CBDT Circular No. 11 of 2019 dated 19.06.2019. 3. The ld. senior Departmental Representative only stated that the provisions of section 115BBE of the Act, as brought in statute book w.e.f. 01.04.2017 is clarificatory in nature and hence, retrospective. He stated that section 115BBE of the Act, was brought into statute book to clarify the ambiguity prevailing in respect of unexplained expenditure claimed by the assessee and being disallowed u/s. 69C of the Act. In view of these arguments, he stated that the....
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....come declared in survey is to be taxed and it has to fall under one of the head of income i.e., business income and therefore, is available for set-off against the business income. Since in the present case, during survey an income of Rs. 75,00,000/- was surrendered and added in the income of the assessee and consequent business loss was claimed, the same is available for set-off against business loss. The Hon'ble Gujarat High Court has considered this position vide para 8 & 9 as under:- "We, however, find that Section 71 of the Act permits an assessee to set off loss other than that of capital gains against income from other head. This very issue came-up for consideration before the Madras High Court in case of chensing Ventures (supra). The Division Bench of the Court considered the issue in following manner: "6. Heard counsel. The Assessing Officer has not given any reason whatsoever to deny the set off of the business loss against the income declared under the head & "other sources". Section 71 deals with set off of loss against income under any other head. After setting off losses against the income under the same head, if the net result is still a loss, the assessee c....
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....alt with this very issue while deciding the treatment to be given to a transaction of surrender of tenancy right. The earlier decisions of the Apex Court commencing from case of United commercial Bank Ltd. v. CIT [1957] 32 ITR 688 (SC) have been considered by the Apex Court and, hence, it is not necessary to repeat the same. Suffice it to state that the Act does not envisage taxing any income under any head not specified in section 14 of the Act. In the circumstances, there is no question of trying to read any conflict in the two judgments of this Court as submitted by the learned Counsel for the Revenue." 6. Even the Hon'ble High Court of Madras in the case of CIT vs. Chensing Ventures, [2007] 163 TAXMAN 175 (Mad), has considered an identical issue and held that the AO cannot deny benefit of section 71 of the Act, and the AO has to consider the undisclosed income u/s. 69 of the Act, but once the loss is determined, the same should be set-off against the income determined under any other head of income. The Hon'ble Madras High Court held in para No. 6 as under:- 6. Heard counsel. The Assessing Officer has not given any reason whatsoever to deny the set off of the busines....