AI Drafter 
TaxTMI 
TaxTMI 
2022 (7) TMI 1013
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....ase and in law, the ld. CIT (A) has erred in holding that the bogus income of Rs.9,40,17,274/- declared by the assessee cannot be added u/s 68 of the Act even if the assessee failed to prove the source and genuineness of the transactions. 2. Whether on the facts and circumstances of the case and in law, the ld. CIT (A) has erred in deleting the addition of Rs.9,40,17,274/- made by AO as unexplained cash credit u/s 68 r.w.s. 115BBE of the I T Act without appreciating the facts that the new section 115BBE of the I T Act was inserted from the Finance Act, 2012 w.e.f. AY 2013-14 instated of the Finance Bill 2016." 3. Brief facts of the case are that the assessee is engaged in the business of manufacturing industry. The assessee has ....
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....s 8,00,17,273 2 Imperial Commodities 15,00,000 3 Subh Commodities Pvt. Ltd. 1,03,00,090 4 Vinavak Commodities 21,99,910 It is seen that the Assessing Officer has computed the income at page 12 in para 7 of the order as under: Total income from business/profession Rs. (as declared by the assessee) 39,98,870 Less: Reduce the bogus income from commodity shown by the assessee (-) Rs.9,40,17,274 Total loss (-) Rs.9,00,18,404 Add: As per para 6 above u/s 68 r.w.s. 115BBE Rs..9,40,17,274/- 4.1 It will be apparent from the aforesaid that the Assessing Officer determined the loss at Rs.9,00,18,404/- but has not set off the same against income of Rs.9,40,17,274/- being income fro....
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....ere is no provision to deny the set off of loss u/s 115BBE of the Act. Further, section 115BBE of the Act has been amended by Finance Act' 2016 w.e.f. Assessment Year 2017-18.The amended section reads as under: "(1) Where the total income of an assessee,- (a) includes any income referred to in section 68, section 69, section 69A, section 698, section 69C or section 690 and reflected in the return of income furnished under section 139; or (b) determined by the Assessing Officer includes any income referred to in section 68, section 69, section 69A, section 698, section 69C or section 690, if such income is not covered under clause (a), the income-tax payable shall be the aggregate of- (i) the ....
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....(2) of the said section 11588E provides that no deduction in respect of any expenditure or allowances in relation to income referred to in the aforesaid sections shall be allowable. It is proposed to amend the said sub-section (2) of section 11588E so as to provide that the set off of any loss shall also be not allowable in respect of income under the aforesaid sections. This amendment will take effect from t" April 2017 and will, accordingly apply in relation to the assessment year 2017-18 and subsequent years." Also memorandum explaining the Finance Bill' 2016 viz-a-viz the above amendment, read as under: "Clarification regarding set off losses against deemed undisclosed income. "Section 11588E o....
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.... the current assessment year AY 2015-16. It is further seen from the pronouncement by Hon'ble Supreme Court in CIT Vs. Vatika Township (P) Ltd, reported in 367 ITR 466 where in general principles concerning retrospectivity were identified and held that unless a contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation." 6. Thereafter, ld. CIT (A) referred to other case laws in this regard and finally concluded as under :- "Therefore, considering the facts and circumstances of the case, the amended provisions of the section 115BBE for prohibition of set off of losses are not applicable to the AY under consideration and since the assessee has fully disclosed the profits earned f....