Section 115BBE is prospective held by the Supreme Court

[DEVKUMAR KOTHARI]

Section 115BBE is prospective  held by the  Supreme Court

Case   under study:

THE COMMISSIONER OF INCOME TAX JAIPUR VERSUS PRAKASH CHAND LUNIA (D) THR. LRS. & ANR. - 2023 (4) TMI 1057 - SUPREME COURT

The above case concerned with provisions related to business income and allowable expenses and losses. Particular issue was deduction of loss due to confiscation of goods (silver bars  in this case) by DRI officials.

The addition was made under section 69A as assessee was unable to explain the source of acquisition of silver bars. The value of such bars was not recorded in books of account. Therefore addition was made under section 69A and Section 115BBE was also applied to levy higher rate of tax.

Assessee claimed loss due to confiscation.

The above two issues are not covered in this article and the scope of this article is only about nature of provisions of S. 115BBE – whether prospective or retrospective.

On the aspect of applicability of  section 115BBE  the Supreme Court observed and  held as follows in ultimate para 27 of the reported judgment:

 “ 27. In view of the aforesaid discussion, I am inclined to hold that the appeal of the Revenue deserves to be allowed, though conscious of the fact that Section 115BBE of the Act may not have an application to the case on hand being prospective in nature. Accordingly, the judgment & order dated 22.11.2016 passed in DBITA No. 96/2003 & DBITR No. 6/1996 by the High Court of Rajasthan at Jaipur stand [PRAKASH CHANDRA LUNIA VERSUS INCOME TAX OFFICER, WARD II, AJMER - 2017 (1) TMI 173 - RAJASTHAN HIGH COURT]

Unquote:

In  view of above judgment it can be concluded that in case of addition u.s. 69A , S.115BBE can be invoked. In fact S. 115BBE can be invoked in case of additions made under sections 68, 69,  69A , 69B,  69C

Section 115BBE was inserted  vide Finance Act, 2012, w.e.f. 01-04-2013 that is assessment year 2013-14.

Therefore,  S.115BBE is not applicable in the assessment Year 1989-1990 covered in  the reported case under study.

The observations of the Supreme Court  “ , though conscious of the fact that Section 115BBE of the Act may not have an application to the case on hand being prospective in nature.”

Declare law and is binding on all courts in India.

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Author found 22 records. Including the case under study.

Now on the prospective or retrospective issue  there should not be dispute by the revenue. and provisions of S.115BBE should not be applied in earlier assessment years prior to AY 2013-14 and amendment to S.115BBE should also be considered prospective.