9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (4) TMI 298 - AT - Income TaxRevision u/s 263 - additional income surrendered during the course of survey was required to be taxed @ 30% as per the provisions of section 115BBE without allowing any deduction in respect of any expenditure or allowance under any provisions of the I.T. Act 1961 and not by adopting / calculating the normal tax rates applicable as done by AO - whether the assessee was eligible to claim set off of loss of the current year from the business as against the declared / surrendered income ? - HELD THAT - Since the assessment year involved in the present case is assessment year 2014-15 and whereas the amended provisions of section 115BBE(2) are applicable from 1.4.2017 hence the assessee as per the above reproduced Board Circular was entitled for set off of loss against surrendered income. In view of this there is no merit in the action of the Ld. PCIT in making the impugned addition and not allowing the set off of income. So far as the observation of the Ld. PCIT that the Assessing Officer has computed the income as per the normal provisions of the Act whereas as per the provisions of section 115BBE of the Act the Assessing Officer should have calculated the tax @ 30% of the declared income is concerned we find that the assessee being a company has already paid the tax @ 30%. Order of the Assessing Officer is neither erroneous nor prejudicial to the interest of Revenue therefore the PCIT has wrongly exercised the jurisdiction u/s 263 of the Act and the action of the Ld. PCIT in setting aside the assessment order cannot be held to be justified. The impugned order passed by the Ld. PCIT u/s 263 of the Act is therefore quashed. - Decided in favour of assessee.
Issues involved:
- Revision jurisdiction under section 263 of the Income Tax Act - Set off of business loss against declared income - Application of section 115BBE of the Act Analysis: Revision Jurisdiction under Section 263: The appeals were filed against the orders of the Principal Commissioner of Income Tax (PCIT) exercising revision jurisdiction under section 263 of the Income Tax Act. The PCIT set aside the Assessing Officer's orders for being erroneous and prejudicial to the interest of Revenue. The PCIT observed discrepancies in the assessment where the Assessing Officer did not tax the surrendered income at the prescribed rate of 30% under section 115BBE of the Act. The PCIT directed a fresh assessment by the Assessing Officer. Set off of Business Loss: The issue revolved around the eligibility of the assessee to set off the current year business loss against the declared/surrendered income of ?95 lakhs. The assessee claimed the set off as per section 71 of the Act, allowing inter-head set off of business loss against other income. The Tribunal referred to various decisions and a CBDT Circular, clarifying that even if the income is treated under section 68, the assessee is entitled to set off the loss against the business income. Application of Section 115BBE: The Tribunal analyzed the amended provisions of section 115BBE(2) applicable from April 1, 2017. As the assessment year in question was 2014-15, the Tribunal concluded that the assessee was entitled to claim a set off of loss against the surrendered income. The Tribunal found no merit in the PCIT's addition and non-allowance of the set off, as the company had already paid tax at the 30% rate. The Tribunal held that the Assessing Officer's order was not erroneous or prejudicial to Revenue's interest. Consequently, the PCIT's jurisdiction under section 263 was deemed improper, and the orders were quashed for both appeals. The findings and decisions made in one appeal were applied mutatis-mutandis to the other appeal due to identical facts and issues. Ultimately, both appeals of the assessees were allowed.
|
