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TMI Blog2021 (4) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... which is a genuine loss calculated. Therefore, the ld. CIT(A) cannot estimate profit on the turnover. Therefore, we are of the view that the CIT(A) was not justified to make enhancement on the income of the assessee. Thus, we uphold the action of the AO regarding carry forward set off of loss as the assessee did not file his return of income within the prescribed time. Addition on account of dividend received from M/s. Sriram Chits - The authorities below were justified in making addition on this count as the dividend received was not reflected in the return of income filed by the assessee. Addition on account of interest on OD facility and interest on mortgage loan - We are of the view that once the income has been estimated on certain percentage based on the under the head income from profit and business or profession, then, other disallowances on account of expenditure cannot be made. Therefore, the AO was not justified in making further addition after estimating the income of the assessee on the turnover. Therefore, this ground is partly allowed. - ITA No. 1122/H/2019 - - - Dated:- 26-3-2021 - Satbeer Singh Godara , Member ( J ) And Laxmi Prasad Sahu , Member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessment by discovering a new Source of Income not considered by the Assessing Officer in the Order appealed against. 6. The learned Commissioner of Income Tax (Appeals)-1, Hyderabad has acted totally against the principles of natural justice in not considering the elaborate submissions made by your Appellant during the Appellate Proceedings with regard to the fact that the CIT (Appeals) could not consider a new Source of Income while exercising the power of Enhancement. 7. The learned Commissioner of Income Tax (Appeals)-I, Hyderabad, has erred on fact at Paragraph No. 5.5 of the Appeal Order wherein it is stated that the Appellant invested ₹ 225.43 Crores in respect of transactions in Multi Commodity Exchange; this observation contradicts the earlier observation that the amount deposited of ₹ 43,08,600 had been invested in Multi Commodity Exchange and therefore the Order of the Commissioner of Income Tax (Appeals) rests on wrong foundation and non appreciation of the Commodity exchange transactions leading to an addition of ₹ 18,00,01,632, which is unsustainable on facts and in Law. 8. The learned Commissioner of Income Tax (Appeals)-I, Hydera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act was completed by the AO on 14/02/2014 determining the total income of the assessee at ₹ 17,45,288/-. While doing so, the AO estimated the income of the assessee at 8% on the turnover of ₹ 1,01,32,284/-. Further, ₹ 5,65,498/- claimed towards interest paid on mortgage loan and OD facility was disallowed, ₹ 1,62,203/- being the dividend received on chit was added back to the income returned and ₹ 14,230/- claimed towards income tax paid was also disallowed. 3. When the assessee preferred an appeal before the CIT(A), the CIT(A) directed the AO to reduce ₹ 43,08,600/- from the total turnover of ₹ 225.43 crores (total of the transactions through multi commodity exchange) and to estimate the balance sales at the rate of 8% and treat ₹ 43,08,600/- as unexplained cash deposits. Further, the CIT(A) sustained the disallowance of ₹ 5,65,498/- made in respect of payment of interest on OD facility and mortgage loan and addition of ₹ 1,62,203/- made in respect of dividend income received by the assessee. 4. Accordingly, the AO passed consequential order dated 10/01/2020 giving effect to the order of CIT(A). 5. Aggrieved b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t pay, regard being had to the charging section and his total income. In this view, it is said that the words enhance the assessments are not confined to the assessment reached through a particular process but the amount which ought to have been computed if the true total income had been found. There is no doubt that this view is also possible. On the other hand, it must not be overlooked that there are other provisions like sections 34 and 33B, which enable escaped income from new sources to be brought to tax after following a special procedure. The assessee contends that the powers of the Appellate Assistant Commissioner extend to matters considered by the Income-tax Officer, and if a new source is to be considered, then the power of remand should be exercised. By the exercise of the power to assess fresh sources of income, the assessee is deprived of a finding by two tribunals and one right of appeal. 8.1. The AO observed that the deposits of ₹ 43,08,600/- in the banks, were invested in the business of gold and silver trading during the year under consideration. The CIT(A) has considered the deposits of amount of ₹ 43,08,600/- as unexplained investment. We are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of business or profession or under head Capital Gains and claims that the loss or any part thereof should be carried forward under sub-section (1) of section 72, or sub-section (2) of section 73 or sub-section (1) [or sub-section (3)] of section 74 [or sub-section (3) of section 74A], he may furnish within the time allowed under sub-section (1.), a return of loss in the prescribed form and verified in the prescribed manner and containing such order particulars as may be prescribed, and all the provisions of this Act shall apply as if it were a return under sub- section (1). B. Section 80 of the Income-tax Act, 1961 is reproduced as under....; Notwithstanding anything contained in this Chapter, no loss which has not been determined in pursuance of a return filed [in accordance with the provisions of sub-section (3) of section 139], shall be carried forward and set off under sub-section (1) of section 72 or sub-section (2) of section 73 or sub-section (1) [or sub-section (3)] of section 74 [or sub-section (3) of Section 74AJ. 3(a). Therefore, by keeping in view the above mentioned provisions of Income-tax Act, 1961 the Loss arrived by the assessee on account of Los ..... X X X X Extracts X X X X X X X X Extracts X X X X
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