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Facts
For Assessment Year 2013-14, the assessee's commission income was taxed under Section 68 read with Section 115BBE, leading to disallowance of depreciation and interest expenses. The assessee sought to set off brought forward business losses based on CBDT Circular No.11/2019 in the second round before the CIT(A), but the CIT(A) confirmed the assessment. This appeal challenges the CIT(A)'s order.
Held
The Tribunal held that, as per CBDT Circular No.11/2019, an assessee is entitled to claim set-off of brought forward losses against income determined under Section 115BBE for assessment years up to 2016-17. Consequently, the Assessing Officer was directed to allow the set-off of losses against the impugned additions/adjustments and recompute the assessee's correct income.
Key Issues
Whether the assessee is entitled to set off brought forward business losses against income taxed under Section 115BBE for Assessment Year 2013-14, in light of CBDT Circular No.11/2019.
Sections Cited
143(3), 68, 115BBE, 115BBE(2)
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Income Tax Appellate Tribunal, “B” BENCH, CHANDIGARH
Before: HON’BLE SHRI LALIET KUMAR, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
(िनधा�रणवष� / Assessment Year: 2013-14) M/s Dhanoa Enterprises Private Limited ITO Showroom No 7-A बनाम/ Ward Naina Commercial Complex Sirhind Vs. Chandigarh Road, Sirhind-140406 �थायीलेखासं./जीआइआरसं./PAN/GIR No.AACCD-8148-H (अपीलाथ�/Appellant) (��थ� / : Respondent) अपीलाथ�कीओरसे/ Appellant by : Shri Virender Gupta (CA) – Ld. AR ��थ�कीओरसे/Respondent by : Shri Vivek Vardhan (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 03-06-2025 घोषणाकीतारीख /Date of Pronouncement : आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2013-14 arises out of an order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Central (NFAC), Delhi [CIT(A)] dated 28-03-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 19-12-2018. The Ld. AR seeks benefit of CBDT Circular No.11/2019 dated 19-06-2019.
Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under.
In the assessment year, the commission income of Rs.11 Lacs was brought to tax u/s 68 r.w.s. 115BBE of the Act. Consequently, the depreciation and interest expenses as claimed by the assessee were disallowed and the income was determined at Rs.26.71 Lacs. The matter reached up-to Tribunal vide wherein the matter was restored back to Ld. CIT(A). The Ld. CIT(A) passed an order on 28-03-2024 which is in further appeal before us.
During second round before Ld. CIT(A), the assessee sought set- off of brought forward business losses in terms of CBDT Circular No.11/2019 dated 19-06-2019. However, Ld. CIT(A) confirmed the assessment against which the assessee is in further appeal before us.
We find that CBDT Circular No.11/2019 dated 19-06-2019 has clarified as under: - 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. Considering the same, we direct Ld. AO to allow set-off of losses against impugned additions / adjustments. It also appear that the income has not been computed correctly. The Ld. AO is directed to compute the correct income of the assessee. The assessee is directed to provide the computations. No other ground has been urged in the appeal.
The appeal stand partly allowed. Order pronounced on 09-06-2025. Sd/- Sd/- (LALIET KUMAR) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 09-06-2025. आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF ASSISTANT REGISTRAR
ITAT CHANDIGARH