Loading judgment…
Facts
The assessee, a private limited company engaged in trading, filed its return declaring nil income for AY 2012-13. The assessment was reopened, and the Assessing Officer made additions under Section 68 and denied the set-off of brought forward business loss/unabsorbed depreciation.
Held
The Tribunal held that prior to the insertion of Section 115BBE, deemed income under Section 68 was allowed to be set off against business losses. Therefore, the addition made under Section 68 was not to be interfered with, but the assessee should be allowed to set off unabsorbed depreciation against this addition.
Key Issues
Whether unabsorbed depreciation can be set off against income/additions made under Section 68 before the insertion of Section 115BBE. Whether the Assessing Officer correctly denied the set-off of brought forward losses against the additions made.
Sections Cited
68, 143(3), 147, 148, 153A, 153C, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI ‘G’ BENCH,
Before: SHRI SATBEER SINGH GODARA, & SHRI NAVEEN CHANDRA
This appeal by the assessee is directed against the order of the ld. CIT(A) -30, New Delhi dated 10.06.2025 pertaining to A.Y 2012-13. Page 1 of 5
The only issue arising out of the 12 grounds of appeal raised by the assessee pertain to the addition made u/s 68 of the Income-tax Act, 1961 [the Act, for short] wherein the Assessing Officer has denied the set off of addition with loss of the assessee company.
Briefly stated, the facts of the case are that the assessee is a private limited company and engaged in the business as trader in commodities, besides earning interest income and agricultural income, as depicted in the audited accounts. The assessee filed its return for AY 2012-13 of 29.09.2012 declaring nil income. Further a further return was furnished u/s 153C on 23.09.2016 declaring nil income. Assessment u/s 153C r.w.s 153A was completed on 12.05.2017.
Thereafter, the assessment was reopened vide notice dated 30.03.2019. The assessee filed its return of income in response to notice u/s 148 of the Act on 20.07.2019 declaring income of Rs. NIL (after set off of brought forward business loss/unabsorbed depreciation of Rs.51,67,119/-). The details of the income are as under:
Income from business Rs.41,86,125 Income from Other sources Rs.9,80,994 Less brought forward Rs.51,67,119 unabsorbed depreciation Total Income NIL Page 2 of 5
The Assessing Officer completed the assessment u/s143(3)/147 of the Act after making addition of Rs.52,53,380/- received as speculative profit, as unexplained credits u/s 68 of the Act and denied the carry forward of loss.
Aggrieved, the assessee went in appeal before the ld. CIT(A) who confirmed the action of the Assessing Officer.
Aggrieved further, the assessee is in appeal before us.
Before us, the ld. counsel for the assessee vehemently stated that for the addition made u/s 68 of the Act during the year under consideration, there was no prohibition under the Statute for setting off the same from the unabsorbed depreciation incurred in the company.
Hence, the ld AR pleaded for the unabsorbed depreciation to be allowed.
On the other hand, the ld. DR relied on the orders of the Assessing Officer and the ld. CIT(A).
We have heard the rival submissions and have perused the relevant material on record. We find that prior to the insertion of section 115BBE w.e.f. AY 2013-14, the deemed income u/s 68,69,69A,69B,69C and 69D were allowed to be set off from the losses incurred in the business. We note that during the A.Y 2012-13, the statute did not prohibit the set off of the addition made u/s 68 of the Act from the income/loss of the Page 3 of 5 assessee’s business income or from other sources. We therefore, do not interfere with the addition made u/s 68 of the Act. However, the assessee may be granted set off of unabsorbed depreciation incurred by the assessee from the addition made u/s 68 of the Act. We order accordingly. Ground no 9 is allowed.
As the relief is granted the other grounds becomes academic. allowed.
Order pronounced in open court on 29.10.2025.