2026 (4) TMI 568

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....remises of one Periyasamy under Section 132 of the Income-Tax Act, 1961 (Act) on 27.09.2006. Simultaneous survey under Section 133A was conducted in the business premises of various entities connected to the searched person including the appellant/assessee herein. Based on the records seized and impounded as well as other information, an assessment was completed for the assessment year 2007-08 under Section 143(3) read with Section 153C of the Act on 30.12.2008. 3. In the present appeal, we are concerned solely with the additions made on account of excess stock. In the course of assessment, the authority took note of the physical stock of goods and valued the same initially at a sum of Rs. 53.83 lakhs and thereafter, correcting certain e....

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.... that the addition made in the order of assessment represented investments of the assessee that had not been recorded in the books of account. Such addition came under the ambit of deemed income under Section 69 of the Act, which did not fall under head 'Profits and Gains of Business or Profession (PGBP). As Section 32(2) provided for carry forward and set-off of unabsorbed depreciation loss only from PGBP, the claim of the assessee was rejected. In doing so, the Assessing Authority also relied upon a decision of the Gujarat High Court in Fakir Mohammed Haji Hasan V. CIT [247 ITR 290 (Guj.)]. 9. As against the order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) (CIT(A)), who confirmed the rejection of the ....

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....specially when the Assessing Officer has not invoked Section 69 of the Income Tax Act to make addition of Rs. 31,83,700/- which was admittedly assessed as unaccounted stocks in business in the hands of Sivasakthi Threads? 3. Whether the facts and circumstances of the case, the Assessee is entitled to set off of unabsorbed depreciation under the heads profit and gains of business based upon the judgment in The Commissioner of Income Tax Vs. Chensing Ventures (2007) 291 ITR 258 (Mad)? 12. The submissions of Mr.Sivaraman, learned counsel for the assessee align with the submissions put forth before the authorities at the time of assessment and appeal. His primary argument revolves around the provisions of Sections 71 and 72 of the A....

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....rejected, and we are of the considered view that the assessee's claim has not been appreciated in proper perspective by the authorities. 17. As per Section 32(2), unabsorbed depreciation loss which is carried forward, assumes the character of current year loss. The entitlement of the assessee to set-off the same as against business income or other incomes barring capital gains, is clear from a reading of Section 72 of the Act, which provides for carry forward and set-off of unabsorbed depreciation loss as against other income as well, in the absence of the assessee returning income from business. 18. This position has been omitted to be taken note by the authorities. In Fakir Mohammed Haji Hasan (Foot Note Supra (1)) as well, the prov....

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....s referred to in Sections 68, 69, 69A, 69B, 69C or 69D. The Section was substituted vide Taxation Laws (Second Amendment), Act 2016, with effect from 01.04.2017. The provision, both prior to, and post substitution, reads as follows: Prior to substitution: Tax on income referred to in section 68 or section 69 or section 69A or section 69B or section 69C or section 69D. (1) Where the total income of an assessee includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D, the income-tax payable shall be the aggregate of- (a) the amount of income-tax calculated on income referred to in section 68, section 69, section 69A, section 69B, section 69C or section ....