9911796707
TMI Blog2017 (4) TMI 450X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessee in the year under consideration for the first time to reduce the taxability of the additional income offered for taxation. It is not disputed that the sum of 30 crores offered to tax in the course of search was duly credited in the profit and loss account. Thus the Assessee has complied with the surrender made at the time of surrender. There is nothing brought on record by the revenue to show that the sum of 30 crores offered in the course of search as undisclosed income was net of any other loss of the Assessee. In the circumstances, as per the provisions of section 70(1) of the Act, which provides that where the net result for any assessment year in respect of any source falling under any head of income, other than "Capital gains", is a loss, the assessee shall be entitled to have the amount of such loss set off against his income from any other source under the same head, will apply. In the case of Assessee there is no dispute that the loss of 14,90,97,080/- computed by the AO as per the assessment order is business loss and the additional income of 30 crores admitted by the Assessee in the course of search operation is the business income. Thus they are income and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roup Shri Dilip Kumar Atha in his statement recorded u/s.132(4) of the Act at the time of search, offered a sum of ₹ 30 crores in F.Y. 2011-2012 in the hands of M/s. Atha Mines Pvt. Ltd., the Assessee herein as profits earned in the relevant FY out of steel trading. In the return of income filed for assessment year 2012-13 the total income returned was ₹ 15,08,95,420/- which was contrary to the income disclosed u/s.132(4) of the Act. On being asked to explain, the assessee company vide its letter dated 27-11-2012, inter alia submitted that the Assessee after the disclosure u/s.132(4) of the Act had to incur unanticipated interest cost and other expenditure in the midst of bad phase of the industry. It was submitted that in addition to the above, there was an unexpected and unforeseen loss in foreign exchange transactions of ₹ 11,00,76,053/- in the financial year 2011-12. Such loss was on account of currency fluctuations between US Dollars and Indian Rupees. The Assessee also filed detailed chart and documents in support of claim of such foreign exchange fluctuation loss of ₹ 11,00,76,053/- in F. Y. 2011-12. The Assessee submitted that all the above factors r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal income of of the Assessee for the Assessment Year-20I2-13 was computed here as under:- Computation of Total Income Profit & Gains of Business or. Profession Net profit / Loss as per P&L A/c. Rs.15,04,24,431/- Less: Other Income {Disclosure u/s 132(4)} - considered separately Rs.30,00,00,000/- (-) Rs.14,95,75,569/- Add: Depreciation taken separately Rs.75,880/- Add: Penalty for delay in T.D.S. ₹ 3,000/- Add: Penalty for Sales Tax Rs.4,01,895/- Add;Donation considered u/s 80G Rs.15,000/- ₹ 4,95,775/- (-) ₹ 14,90,79.,794/- Less :Depreciation as per IT Rules Rs.4,19,309/- Dividend exempt u/s 10(34) Rs.1,54,723/- ₹ 5,74,032/- (-) ₹ 14,96,53,826/- Disallowed u/s 36(1)(va) Rs.5,56,746/- (-) ₹ 14,90,97,080/- Book profit Rs.,15,04,24,431/- Additional income offered for Taxation u/s 132(4) of the IT Act (Not to be adjusted against Business Loss as discussed in para 6 above) Rs.30,00,00,000/- TOTAL INCOME Rs.30,00,00,000/- Business Loss of ₹ 14,90,97,080/- is allowed to be carried forward. Assessed u/s 143(3) of the Act as above. 7. Aggrieved by the order of AO the assessee preferred a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the financial cost has to be allowed as deduction u/s 36 (l)(iii) of the Act. He also found that forex loss and financial costs were also incurred by the Assessee in the immediately preceding year and allowed by the AO as deduction. The CIT(A) therefore held that the forex loss and financial costs were not incurred by the Assessee in the year under consideration for the first time to reduce the taxability of the additional income offered for taxation. The CIT(A) held that there was no provision in the Act by the application of which the assessed income could be determined at ₹ 30 crores and carry forward of the loss of ₹ 14,90,97,080/- could be made. He held that in the light of the provisions of section 70 of the Act which provide for the set off of loss from one source against income from another source under the same head of income and in particular section 70(1) of the Act, which provides where the net result for any assessment year in respect of any source falling under any head of income, other than "Capital gains", is a loss, the assessee shall be entitled to have the amount of such loss set off against his income from any other source under the same he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee in the year under consideration for the first time to reduce the taxability of the additional income offered for taxation. 10. Once the above conclusions are not disputed than the provisions of section 70 of the Act which provide for the set off of loss from one source against income from another source under the same head of income will automatically come into operation. It is not disputed that the sum of ₹ 30 crores offered to tax in the course of search was duly credited in the profit and loss account. Thus the Assessee has complied with the surrender made at the time of surrender. There is nothing brought on record by the revenue to show that the sum of ₹ 30 crores offered in the course of search as undisclosed income was net of any other loss of the Assessee. In the circumstances, as per the provisions of section 70(1) of the Act, which provides that where the net result for any assessment year in respect of any source falling under any head of income, other than "Capital gains", is a loss, the assessee shall be entitled to have the amount of such loss set off against his income from any other source under the same head, will apply. In the case of Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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