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TMI Blog2020 (6) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... merit in the arguments of the AR that once the addition has been made on account of unrecorded sales, then no addition on account of shortage of stock or investment in stock is required to be made. Under the facts and circumstances of the case the arguments of the AR appears acceptable and the addition made by the AO is not found sustainable and hence deleted. - ITA Nos.663 And 664/CHD/2017 And ITA No.773/CHD/2017 - - - Dated:- 29-5-2020 - Shri Sanjay Garg, Judicial Member And Ms. Annapurna Gupta, Accountant Member For the Assessee : Shri Rajiv Sharma, Advocate For the Revenue : Dr. G.S. Phani Kishore, CIT DR ORDER PER SANJAY GARG, JUDICIAL MEMBER: The captioned are the cross appeals, two by the assessee bearing ITA Nos. 663 664/ Chd/2017 relating to assessment year 2012-13 and 13-14 respectively, whereas, ITA No. 773/Chd/ 2017 is an appeal preferred by the Revenue for assessment year 2013-14 against the orders of Commissioner of Income Tax (Appeals)-5, Ludhiana [hereinafter referred to as CIT (A) ]. 2. First, we take up assessee s appeals for assessment years 2012- 13 2013-14, wherein, following grounds have been raised by the assessee :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account of alleged excess raw material consumption without any basis and adding the same to the returned income of the assessee. 6. That the Ld. CIT(A)-5,Ludhiana erred in confirming addition made by the Ld. Assessing Officer of ₹ 6,73,77,284/- on account of unexplained cash credits. 7. That the surrendered / disclosed covers the entries recorded in seized annexure. A-1. A-2 and A-3 and the learned CIT(A)-5, Ludhiana failed to appreciate the facts in proper perspective. 8. The appellant craves to amend, alter, delete or supplement any ground of appeal before the appeal is finally heard and disposed off. 3. The Ld. Counsel for the assessee, at the outset, has submitted that except ground No.2 in each of the appeal, he does not press the remaining grounds of appeals. Hence, the other grounds in both the appeals stand dismissed as not pressed . 4. Vide to ground No. 2 of both the appeals, the assessee has contested the action of the lower authorities in not allowing set off of business losses against the surrendered / disclosed business income. This issue now stands clarified with the CBDT Circular No.11 of 2019 whereby the CBDT has clarified that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t convey the intention that losses shall not be allowed to be set-off against income referred to in section 115BBE of the Act and hence, the amendment was made vide the Finance Act, 2016. 4. Thus keeping the legislative intent behind amendment in section 115BBE(2) vide the Finance Act, 2016 to remove any ambiguity of interpretation, the Board is of the view that since the term 'or set off of any loss' was specifically inserted only vide the Finance Act 2016, w.e.f. 01.04.2017, an assessee is entitled to claim set-off of loss against income determined under section 115BBE of the Act till the assessment year 2016-17. 5. The contents of this Circular may be circulated widely for information of all stakeholders and departmental officers. The pending assessments and litigations on this issue may be handled accordingly. 6. Hindi version to follow. Sd/- RajarajeswawR.) Under Secretary (ITA.II), CBDT 5. The assessment years involved in these appeals being 2012-13 2013-14, therefore, the assessee is accordingly entitled to set off of current year losses against deemed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rading account of unaccounted business transactions relating to annexures A-l, A-2 and A-3. The explanation of the assessee was considered but not found acceptable by the Assessing Officer as the same could not be verified and further that the AR of the assessee failed to prove the genuineness along with independent evidence to corroborate the same with documentary evidences. Thus, the Assessing Officer made an addition of ₹ 1, 69, 36, 940 /- on account of gross profit earned by the assessee on the unaccounted sales and corresponding investment in the purchases. 9. The Ld. CIT(A), however, deleted the additions so made by the Assessing Officer, observing as under:- The AR during the course of appellate proceedings submitted that these aspects were taken into consideration while making the surrender. The assessee has accepted transactions of sale and purchase not recorded in the books of accounts. The AR argued that the difference in stock and cash is on account of these unrecorded sale purchase carried out by the assessee for which adequate amount of income has been surrendered during the search. It has also been argued that the AO has made a total addition of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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