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TMI Blog2019 (3) TMI 1952X X X X Extracts X X X X X X X X Extracts X X X X ..... e u/s 14A could be made if there was no exempt income actually earned by the assessee during the relevant year. In the present case, no exempt income was earned by the company during the year under consideration and this being the undisputed position, we find no infirmity in the impugned order of the Ld. CIT(A) deleting the disallowance made by the A.O. u/s 14A - Ground No. 2 of Revenue s appeal is accordingly dismissed. Claim of the assessee for set off of loss recorded under the head profits and gains of business or profession against the addition made by the A.O. u/s 68 - HELD THAT:- the issue involved in the present case is relating to the claim of the assessee for set off of business loss of the current year against the income assessee u/s 68 in the same year. It is observed that this issue as involved in the assessee s case is squarely covered in favour of the assessee by the various judicial pronouncements cited by the learned counsel for the assessee. In one of such decisions rendered in the case of ITO vs M/s. Prism Share Trading Pvt. Ltd [ 2018 (12) TMI 212 - ITAT MUMBAI ] allowing the claim of the assessee for set off of loss under the head Profits and Gains of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee had submitted confirmation of the balance from Mahabir Trading Company as well as Dudani Fuels Pvt. Ltd. These submissions were made by the assessee before the A.O. by an undated covering letter which has also been produced before the undersigned. Under the given facts and circumstances the creditors are confirming their claim of receipt from the assessee and there is no variation of their claim from the account being shown by the assessee as payable to them, it cannot be concluded that the liability of payment in respect of these two creditors had ceased to exist. I have perused the legal authorities cited by assessee along with its argument and I am of the opinion that the onus cast upon the A.O. to bring to record circumstances under which it can be decided that there has been cessation of liability has not been discharged. Accordingly, ground no. 5, 6 and 7are being allowed. 5. We have heard the arguments of both the sides on this issue and also perused the relevant material available on record. The learned DR has relied on the order of the AO in support of the Revenue s case on this issue and submitted that the confirmations of the sundry creditors filed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue s appeal is accordingly dismissed. 7. In Ground No. 3, the Revenue has challenged the action of the Ld. CIT(A) in allowing the claim of the assessee for set off of loss recorded under the head profits and gains of business or profession against the addition made by the A.O. u/s 68. 8. In the computation of total income filed along with its return of income, the assessee-company had declared commodity profit of ₹ 10,00,33,775/- received from Subh Commodities Pvt. Ltd. under the head Profits and Gains of business or profession . The enquiry made by the A.O. revealed that the claim of the assessee of having earned the commodity profit was not genuine. He accordingly treated the amount of commodity profit credited by the company in its books of account as unexplained cash credit u/s 68. This change in the head of income by the A.O. resulted in a substantial loss under the head Profits and Gains of business or profession . The A.O. however did not allow the set off of the said loss against the income assessed u/s 68 by relying on the decision of Hon ble Kerala High Court in the case of M/s. Kerala Sponge Iron Ltd. vs CIT. 9. In the appeal filed before the Ld. CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 5650/M/17) dtd. 30.11.2018. 2. DCIT vs Atha Mines Pvt. Ltd. (ITA No. 601/Kol/14) dtd. 05.04.2017. 3. Pr. CIT vs Atha Mines Pvt. Ltd. (ITA No. 158 of 2018) (Cal HC). 4. Pitamber Commodity Futures Pvt. Ltd. vs ACIT (ITA No. 863/Jp/17) dtd. 21.03.18. 5. ACIT vs Sai Bhaskar Irons Pvt. Ltd. (ITA No. 108/Viz/16) dtd. 13.02.18. 12. We have considered the rival submissions and also perused the relevant material available on record. As rightly contended by the learned counsel for the assessee, the issue involved in the case of Kerala Sponge Iron Ltd. (supra) relied upon by the A.O. of his order and in the case of Shri Pradeep Kumar Todi (supra) cited by the learned DR at the time of hearing before the Tribunal was different in as much as claim was made in the said cases for set off of brought forward business losses of the earlier years against the income assessed u/s 68 for the current year whereas the issue involved in the present case is relating to the claim of the assessee for set off of business loss of the current year against the income assessee u/s 68 in the same year. It is observed that this issue as involved in the assessee s case is squarely covered in favo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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