THE ITO, WARD-2(4), BHAVNAGAR vs. RAGHUVIR GINNING FACTORY, BHAVNAGAR

These are appeals by the Revenue preferred against the orders of CIT(A)-6, Ahmedabad dated 30.11.2015 pertaining to Assessment Year 2012-13. The impugned appeals relate to three different assessees but since the first appellate

The common grievance in all these appeals relate to the allowance of set off of business loss and the depreciation from the undisclosed income.

The common facts in the impugned appeals relate to the disclosure made during the course of survey proceedings in the business premises of the assessee and the disclosure relate to the excess stock fond on account of physical inventory taken by the official of the survey team by comparing inventory as on date of survey as per books.

In its return of income, the assessee included the amount disclosed on account of unaccounted stock but claimed set off of losses in other heads of income from the income so disclosed. The Assessing Officer was of the firm belief that the amount disclosed by the assessee is not eligible for the set off of losses from any other source of income. Drawing support from the decision of Hon’ble Gujarat High Court in the case of Fakir Mohmed Haji Hasan vs. CIT, 247 ITR 290 (Guj), the Assessing Officer denied the set off of losses and taxed the entire income disclosed during the survey proceedings.

The assessee strongly agitated the matter before the CIT(A). After considering the facts and the submissions, the CIT(A) was convinced that the disclosed amount is assessable under one of the head of income, loss and depreciation can be set off against income disclosed during the survey. The CIT(A) accordingly directed the Assessing Officer to assess the disclosed income under one of the head and allowed the set off of business loss and depreciation.

Aggrieved by this, the Revenue is in appeal before us. Learned Departmental Representative strongly supported the findings of the Assessing Officer and once again relied upon the decision of Hon’ble High Court of Gujarat in the case of Fakir Mohmed Haji Hasan (supra). Per contra, learned counsel for the assessee reiterated what has been stated before the lower authorities.

We have given a thoughtful consideration to the orders of the authorities below. There is no dispute in so far as the disclosure made at the time of survey.

Considering the facts in totality, we do not find any error or infirmity in the findings of the CIT(A).

All the impugned appeals are accordingly dismissed.