Pr. Commissioner Of Income Tax-Central, Jaipur v. Aacharan Enterprises Pvt. Ltd

HIGH COURT OF JUDICATURE FOR RAJASTHAN ATJODHPUR D.B. Income Tax Appeal No. 4/2018 Pr. Commissioner Of Income Tax-Central, Jaipur. ----Appellant Versus Aacharan Enterprises Pvt. Ltd having its Registered Office atN.H.8, Lal Madri, Nathdwara, Rajsamand, Rajasthan-313 301through its Authorized Representative Sanjeev Joshi s/o ShriTrilok Kumar Joshi, aged about 49 years. ----Respondent For Appellant(s) : Mr. K.K.BissaFor Respondent(s): Mr.Abhishek Mehta HON'BLE MR. JUSTICE SANGEET LODHA HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATIJudgment 21/01/2020 1.This appeal preferred under Section 260A of Income Tax Act,1961 (for short “the Act”) is directed against order dated 3.7.17 ofthe Income Tax Appellate Tribunal (ITAT), Jodhpur Bench, Jodhpur(‘ITAT’), passed in ITA No.124/Jodh./2017, whereby an appealpreferred by the Revenue against the order dated 29.12.16 passedby the Commissioner of Income Tax (Appeals) [CIT (A)] forAssessment Year 2014-15, has been dismissed. By order dated29.12.16, the CIT (A) held that the deemed income ofRs.6,50,00,000 of the respondent assessee is chargeable to taxunder the head ‘Income from Other Sources’ and allowed the intrahead adjustment/set off towards the current year business loss tothe extent of Rs.3,82,37,792/- and brought forward business lossto the extent of Rs.2,67,62,208/- out of the said income while rejecting the contention of the assessee that the said sums aretaxable as income from business or profession. The CIT (A)further held that amendment made by Finance Bill 2016 to theprovisions of Section 115BBE of the Act cannot be appliedretrospectively. 2.Learned counsel appearing for the appellant contended thatthe ITAT has seriously erred in holding that the provisions ofSection 115BBE of the Act providing that no set off of any lossshall be allowed to the assessee against the deemed income underSection 68, 69, 69A to 69(2), is not applicable to the AssessmentYear 2014-15 and thus, set off of the loss allowed to the assesseeignoring the provisions of Section 115BBE is absolutely unjustified. 3.On the other hand, the counsel appearing for the respondentcontended that provisions of Section 115BBE substituted by theTaxation Laws (Second Amendment) Act, 2016 w.e.f. 1.4.17cannot be applied to the Assessment Year 2014-15 inasmuch as,the same shall be applicable only to the Assessment Year 2017-18onwards and thus, the ITAT has committed no error in affirmingthe order passed by the CIT (A). Learned counsel submitted thatas a matter of fact, vide circular No.11/2019, the Central Board ofDirect Taxes (CBDT) has already clarified the term ‘set off anyloss’ which was specifically inserted only vide Finance Act, 2016w.e.f. 1.4.17 and an assessee is entitled to claim set off of lossagainst income determined under Section 115BBE of the Act tillthe Assessment Year 2016-17 and therefore, the contentionsought to be raised on behalf of the Revenue is absolutelyunjustified. 4.We have considered the submissions of the learned counseland perused the material on record. 4.We have considered the submissions of the learned counseland perused the material on record. 5.Indisputably, the provisions of Section 115BBE as existedprior to the amendment does not provide that the losses shall notbe allowed to be set off against the income referred in Section115BBE and it is only to dispel the uncertainty prevailing on theissue, the provision was amended. A bare perusal of theprovisions makes it abundantly clear that it cannot be appliedretrospectively. Moreover, now vide circular No.11/2019, the CBDThas clarified in unequivocal terms that the term ‘or set off of anyloss’ was inserted vide the Finance Act, 2016 w.e.f. 1.4.17 andtherefore, an assessee is entitled to claim set off of loss againstthe income determined under Section Section 115BBE of the Acttill the Assessment Year 2016-17. It is further clarified that thepending assessment and litigation on this issue shall be handledaccordingly. In this view of the matter, the contention sought to beraised by the Revenue as aforesaid, cannot be countenanced bythis Court. 6.No other ground is pressed by the appellant before thisCourt. 7.Consequently, the appeal preferred by the Revenue isdismissed. No order as to costs. (PUSHPENDRA SINGH BHATI),J 55-Aditya/- (SANGEET LODHA),J