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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI GEORGE MATHAN & SHRI S. JAYARAMAN
: सुनवाई क+ तार"ख/Date of Hearing 09.05.2018 घोषणा क+ तार"ख / : 09.05.2018 Date of Pronouncement आदेश / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER:
Revenue against the Order of Commissioner of Income Tax (Appeals), Salem, in dated 13.09.2017 for the AY 2013-14. 2. Shri N.Madhavan, ACIT, represented on behalf of the Revenue and Shri M.Karunakaran, Adv., represented on behalf of the assessee. :- 2 -:
In the Revenue’s appeal, the Revenue has raised the following grounds:
(i) The Learned Commissioner of Income-tax (Appeals) has erred in holding that the assessee is eligible to set off of loss from share trading u/s 115BBE of the Act, without adjudicating on the issue whether the profits declared by the assessee are genuine business, profits or unexplained cash credits u/s.68 of the Act, as has been held by the Assessing Officer. (ii) Further, the Learned Commissioner of Income-tax (Appeals) has erred to take cognizance of the fact that there are huge deposits in the bank account of the assessee and the withdrawals there from have been invested for purchase of shares in cash. (iii) The learned Commissioner of Income-tax (Appeals) ought to have first adjudicated on the disputed nature of profits declared by the assessee in the return of income and thereafter have decided the allowability of set off of loss under the Act. (iv) The Learned Commissioner of Income-tax (Appeals), having Co-terminus powers with the AO, has erred in not adjudicating on the issue of genuineness of share trading loss which has been allowed to be set off u/s.115BBE of the Act.
4. It was a submission that the assessee is an individual who is having salary income, rental income and share trading income. It was a submission that the assessee had disclosed certain loss in respect of share trading business. This loss had been set off by the assessee against another new business income disclosed being services rendered to the agricultural farmers. It was a submission that the assessee claims to have provided services to various farmers from remote areas of the Districts of Madhya Pradesh, Karnataka, Maharashtra and had claimed to have received service charges to an extent of Rs.39,000/- on an average from nearly 900 farmers totaling to Rs.3,47,60,000/-. It was a submission that the AO in the course of the assessment had treated the amount of Rs.3,57,40,000/- received by the assessee as undisclosed income of the assessee on the ground that the assessee was unable to prove the services rendered and had added the same u/s.68 of the Act. :- 3 -:
5. On appeal, Ld.CIT(A) had directed the AO to apply the provisions of Sec.115BBE. It was a submission that consequent to the application of the provisions of Sec.115BBE, the set off of loss in respect of the shares had been allowed to the assessee. It was a submission that the set off of loss was not liable to be allowed to the assessee in view of the amendment to Sec.115BBE by the Finance Act 2016, wherein the words “set off of losses” was introduced. It was a submission that the said amendment was liable to be read as retrospective in operation. It was a submission that the order of the Ld.CIT(A) was liable to be reversed.
We have considered the rival submissions.
A perusal of the order of the Ld.CIT(A) clearly shows that the Ld.CIT(A) has not given any specific relief to the assessee in respect of the addition made by the AO. Clearly, the provisions of Sec.115BBE had been introduced specifically for bring to tax any addition made by the AO by invoking the provisions of Sec.68, Sec.69, Sec.69A, Sec.69B, Sec.69C or Sec.69D. The Ld.CIT(A) has not tinkered with the findings of the AO that the addition made in respect of the service income claimed by the assessee was liable to be assessed u/s.68 of the Act as the assessee was unable to explain the same. Thus, admittedly, the provisions of Sec.115BBE does apply in the assessee’s case. The submission by the Ld.DR that the terms “set off of loss” which has been introduced by the :- 4 -:
Finance Act, 2016 w.e.f. 01.04.2017 in the amendment to Sec.115BBE(2) of the Act is to be read to be retrospective in operation, cannot be read retrospectively as the provisions of Section itself specifically provides for the same to be read as prospectively in operation. This being so, we find no error in the order of the Ld.CIT(A) which calls for any interference.
In the result, the appeal filed by the Revenue stands dismissed.
Order pronounced in the Open Court on May 09, 2018, at Chennai. (एस जयरामन) (जॉज" माथन) (S. JAYARAMAN) (GEORGE MATHAN) लेखा सद य/ACCOUNTANT MEMBER "या"यक सद य/JUDICIAL MEMBER