The Tribunal While Considering The Appeal Had Reliedon Its Own Decision In M/S Beema Jewels v. The Tribunal Also Relied On A Judgment Of The Gujarat

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM & THE HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI THURSDAY, THE 07TH DAY OF MARCH 2019 / 16TH PHALGUNA, 1940 ITA.No.20 OF 2019 AGAINST THE ORDER IN ITA 92/2018 DATED 28-11-2018 OFI.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/APPELLANT/ASSESSEE: M/S. VIJAYA HOSPITALITY AND RESPORTS LTD.37/991,1ST FLOOR, EMMY SQUARE S.A.ROAD, ELAMKULAM, KOCHI-682 020 REPRESENTED BY ITS AUTHORISED SIGNATORY MR.SJI P.CHACKO 37/991,1ST FLOOR, EMMY SQUARE S.A.ROAD, ELAMKULAM, BY ADVS.SRI.A.KUMARSRI.P.J.ANILKUMARSMTG.MINI(1748)SRI.P.S.SREE PRASADSRI.AJAY V.ANANDJOB ABRAHAM RESPONDENT/RESPONDENT/REVENUE: 1COMMISSIONER OF INCOME TAXCENTRAL REVENUE BUILDING, I.S.PRESS ROAD, KOCHI-682018CENTRAL REVENUE BUILDING, I.S.PRESS ROAD, KOCHI-682018 2INCOME TAX OFFICER,I.S.PRESS ROAD, KOCHI-682 018 CORP.WARD 2(5), RANGE-2, CENTRAL REVENUE BUILDING, 3TAX RECOVERY OFFICER (CORP),5TH FLOOR, KANDAMKULATHY TOWERS, M.G.ROAD,KOCHI-682 011 4THE MANAGER, ICICI BANK, DAFFODILS, OPP.SILVERLINE HOSPITAL, K.P.VALLON ROAD, KADAVANTHRA-682 020 OTHER PRESENT: SC,(GOVERNMENT OF INDIA)TAXES- SRI JOSE JOSEPH THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON07.03.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## C.K. ABDUL REHIM & R. NARAYANA PISHARADI, JJ. ----------------------------------------------------- I.T. Appeal No. 20 OF 2019 ------------------------------------------------------- Dated this the 7[th] day of March, 2019 J U D G M E N T Abdul Rehim, J. The assessee is in appeal against an order of the Income Tax Appellate Tribunal, Cochin Bench in ITA No.92/Coch/2018,dated 28.11.2018. The assessment year concerned is 2013-2014. 2. Facts in brief are that, the assessment with respect to the year concerned was completed under Section 143(3) of theIncome Tax Act(hereinafter referred to as 'the Act', for short) on30.03.2016 by making additions to the tune of `87,25,235/-, withrespect to which set off was given against the carry forwardloss(unabsorbed portion of depreciation) claimed. The I.T.A. No.20/2019 -:3:- assessable income stood at '` Nil', after the set off. Against the order of assessment a suo motu revision proceedings wasinitiated by the Principal Commissioner of Income Tax, Kochi, inexercise of the power vested under Section 263 of the Act, onthe basis that; “Assessee's income included`56,24,264/-,deemed income being unexplained cash creditunder Section 68. Deemed income u/s. 68 to69D are not classified under any heads ofincome u/s 14 of the Act. Therefore, set off ofbrought forward loss against this deemedincome is not correct”. In the revisional order, the Commissioner of Income Tax (CIT) held that, the Assessing Officer(AO) had committed a mistake inallowing the set off, in a manner prejudicial to the interest of therevenue and therefore the assessment order was set aside andremitted to the AO to complete the assessment de-novo, afteraffording opportunity to the assessee. Aggrieved by the saidorder of the CIT the assessee had approached the Tribunal in I.T.A. No.20/2019 -:4:- the appeal. “Assessee's income included`56,24,264/-,deemed income being unexplained cash creditunder Section 68. Deemed income u/s. 68 to69D are not classified under any heads ofincome u/s 14 of the Act. Therefore, set off ofbrought forward loss against this deemedincome is not correct”. In the revisional order, the Commissioner of Income Tax (CIT) held that, the Assessing Officer(AO) had committed a mistake inallowing the set off, in a manner prejudicial to the interest of therevenue and therefore the assessment order was set aside andremitted to the AO to complete the assessment de-novo, afteraffording opportunity to the assessee. Aggrieved by the saidorder of the CIT the assessee had approached the Tribunal in I.T.A. No.20/2019 -:4:- the appeal. 3.The Tribunal while considering the appeal had reliedon its own decision in M/s Beema Jewels v. Pr.CIT(ITANo.208/COCH/2018 dated 20.08.2018). It was noticed that, thecase in M/s Beema Jewels was passed on the basis of ajudgment of this court in CIT v. Ker. Sponge Iron Ltd.(379 ITR330) in which it was held that, for the purpose of set off or for anyother purpose, the unexplained income could not be treated asbusiness income under any one of the heads provided underSection 14, in which case the question of set off did not arise.This court in the case Kerala Sponge Iron (supra)held that, theorder of the Tribunal to the extent it set aside the order of theCommissioner (Appeals) which directed the AO to allow the setoff of the current year's business loss as well as brought forwardbusiness loss and unabsorbed depreciation, against the incomeassessed under Section 68, has to be reversed. 4.The Tribunal also relied on a judgment of the Gujarat -:5:- High Court in Fakir Mohmed Haji Hasan v. CIT [(2001) 247 ITR290] in order to arrive at a finding that, the source ofunexplained cash credit is not known and hence they cannot belinked to any known source/head of income, including the'income from other sources'. In order to constitute 'income fromother sources', the source, namely the 'other sources', has to beidentified. Income from unexplained or unknown source cannottherefore be considered or taxed as 'income from other sources'.In view of the principle laid based on the decisions mentioned asabove, the appeal of the assessee was dismissed. Theassessee is approaching this court challenging the order of theTribunal. The following are the questions of law framed; “A.Whether in the facts and circumstances of thecase the Commissioner of Income Tax erred or notin exercising jurisdiction u/s 263 of the Income TaxAct? B.Whether in the facts and circumstances of thecase, whether the Commissioner of Income Taxerred or not in holding that the Assessing Officer I.T.A. No.20/2019 has erroneously allowed the set off of broughtforward losses against the deemed income? C. Whether in the facts and circumstances ofthe case, whether the Commissioner of IncomeTax could have exercised jurisdiction under Section263 in the light of the binding judgment of theJurisdictional High Court in P.D. Abraham's case?D.Whether the order of the Hon'ble Tribunalsustaining the order of Commissioner of IncomeTax is sustainable in law, despite the Tribunal beingnoticed of the judgment in P.D. Abraham's caseand has the Tribunal erred or not in sustaining theorder of the Commissioner of Income Tax withoutreturning a finding on the acceptance or otherwiseof the judgment of the Jurisdictional High Court inP.D. Abraham's case? E.Whether or not the Commissioner of IncomeTax and Hon'ble Tribunal erred in notnoticing/adverting to Section 115BBE and theamendment to sub-section (2) of Section 115BBEvide Finance Act 2016 and also the bindingdepartmental circular clarifying sub-section (2) ofSection 115BBE to be prospective in nature. I.T.A. No.20/2019 -:7:- E.Whether or not the Commissioner of IncomeTax and Hon'ble Tribunal erred in notnoticing/adverting to Section 115BBE and theamendment to sub-section (2) of Section 115BBEvide Finance Act 2016 and also the bindingdepartmental circular clarifying sub-section (2) ofSection 115BBE to be prospective in nature. I.T.A. No.20/2019 -:7:- F.Whether the Tribunal and the CIT have erredor not in disallowing the set off of the broughtforward losses against the deemed income allowedby the assessing authority in its original order andwhether or not such disallowance is contrary to lawinsofar as assessment year 2013-2014concerned?” 5.Heard Sri. A. Kumar, learned counsel appearing for the appellant and Sri. Jose Joseph, Standing Counsel forGovernment for India (Taxes) for the respondents. 6.One of the main contention raised on behalf of theappellant is that, the reliance placed by the Tribunal on thedecision of this court in Kerala Sponge Iron Ltd.(supra) and onthe decision of the High Court of Gujarat in Fakir Mohmed HajiHasan(supra) are not legal and proper in view of the subsequentdecision of the High Court of Gujarat in Dy. CIT v. RadheDevelopers India Ltd. [(2010) 329 ITR(1) and in CIT-II v.Shilpa Dyeing and Printing Mills Pvt. Ltd.[(2013) 219 Taxman279(Gu) in which the High Court of Gujarat itself had I.T.A. No.20/2019 -:8:- distinguished the decision in Fakir Mohmed Haji Hasan'scase(supra). The counsel had also placed reliance heavily onthe decision of this court in CIT v. P.D. Abraham.@Appachan[48 Taxman 352] 7.The appeal of the assessee was rejected by theTribunal on the basis that, the income under Section 68 of theAct, which arose out of unexplained source of cash credit,cannot be termed under any of the heads of the income,including 'income from other sources'. Therefore such incomecannot be classified under any of the heads contemplated underSection 14 of the Act. Any deductions or set off, whichcorresponds to such income cannot be allowed with respect tothe undisclosed income assessed under Section 68. 8.We may refer to the decisions cited above at the firstinstance. First among in point of time is the decision of the HighCourt of Gujarat in Fakkir Mohmed Haji Hasan(supra). It isheld that the provisions of Sections 69, 69A, 69B or 69C applies when no source is disclosed at all. It would not be possible toclassify the deemed income under anyone of the headsspecified under Section 14. Therefore such deemed income willnot fall even under the head of “income from other sources” andcorresponding deductions which are allowable under variousheads cannot be allowed in the case of such income. It isobserved that, if it is possible to peg the income under any oneof the heads enumerated under Section 14, by virtue ofsatisfactory explanation being given, then provisions of Sections69, 69A, 69B and 69C will not apply, in which event theprovisions regarding deductions etc., applicable to the relevanthead of income under which such income falls will automaticallybe attracted. The decisions in Fakkir Mohmed HajiHasan(supra) was rendered in August 2000. But the HighCourt of Gujarat in the decision in Radhe Developers(supra),rendered in April 2009, made reference to the decision in FakkirMohmed Haji Hasan(supra) and observed that, the decision in Fakkir Mohmed Haji Hasan(supra) are not relevant orgermane to the issue involved therein, because the schemeemanating from a conjoint reading of the provisions of Sections14 and 56 of the Act was not considered. Referring to thedecisions of the Honourable Supreme Court in CIT v. D.PSanto bros.Chembur Pvt.Ltd [(2005) 193 CTR SC 578] and inUnited Commercial Bank Ltd.v. CIT [(1957) 32 ITR 688 SC] itwas held that, the Act does not envisage taxing of any incomeunder any head not specified in Section 14 of the Act andtherefore there is no question of trying to read any conflict in thejudgments of that court. Fakkir Mohmed Haji Hasan(supra) are not relevant orgermane to the issue involved therein, because the schemeemanating from a conjoint reading of the provisions of Sections14 and 56 of the Act was not considered. Referring to thedecisions of the Honourable Supreme Court in CIT v. D.PSanto bros.Chembur Pvt.Ltd [(2005) 193 CTR SC 578] and inUnited Commercial Bank Ltd.v. CIT [(1957) 32 ITR 688 SC] itwas held that, the Act does not envisage taxing of any incomeunder any head not specified in Section 14 of the Act andtherefore there is no question of trying to read any conflict in thejudgments of that court. 9.But the High Court of Gujarat itself in a still laterdecision in Shilpa Dyeing and Printing Mills Pvt.Ltd.(supra)found that, by applying the decision in Fakkir Mohmed HajiHasan(supra), as explained in Radhe Developers(supra) thebenefit of Section 71 as applicable to the facts involved in thesaid case cannot be declined when the question of set off was considered. While deciding the issue as to whether set off can begiven with respect to income from an unlisted sources, thebenefit of Section 71 with respect to set off was denied by theAssessing Officer by relying on Fakkir Mohmed HajiHasan(supra). Relying on to the decision of the Madras HighCourt in CIT v. Chensing Ventures [(2007) 291 ITS 258(Chennai) it is held that, once a head of income is assigned tothe additional income disclosed, whether business or othersource, it become available for set off against the current yearbusiness loss, as the current year business loss is allowed to beset off against the current year income under any other head, byvirtue of Section 71. In CIT v. Chensing Ventures(supra) it washeld that, the income tax is only one tax levied on the sum totalof the income classified and chargeable under various heads.Section 14 has classified different heads of income and theincome tax under each head is separately computed. Theincome which is computed in accordance with law is one income and it is not a collection of distinct tax levied separately on each head of income and does not a category of various tax computedwith reference to each of the different sources separately. Thereis only one assessment and the same is made after the totalincome has been ascertained. The assessee is subject to theincome tax of his total income, though his income under eachhead may be well below the taxable limit. Hence, the lawsustained in any year under any heads of income will have to beset off against income under any other head. Based on theabove principal it was held that set off cannot be declined. 10.This Court while deciding the case of Kerala SpongeIron Ltd. (supra) in the year 2015 had placed reliance on FakkirMohmed Haji Hasan's case (supra) and considered thequestion as to whether income determined under Section 68 willfall under any head of Section 14 and is not such income beyondSection 17 which deals with set off and held that when theincome cannot be classified under any one of the heads under I.T.A. No.20/2019 10.This Court while deciding the case of Kerala SpongeIron Ltd. (supra) in the year 2015 had placed reliance on FakkirMohmed Haji Hasan's case (supra) and considered thequestion as to whether income determined under Section 68 willfall under any head of Section 14 and is not such income beyondSection 17 which deals with set off and held that when theincome cannot be classified under any one of the heads under I.T.A. No.20/2019 this Section, it follows that giving any deductions underprovisions which correspond to such heads of income will notarise. Once the income is treated as unexplained cash creditunder Section 68 of the Act, for the purpose of set off or anyother purpose, the said unexplained income cannot be treated asbusiness income under any one of the heads provided underSection 14, in which the question of set off does not arise.11.Contention raised by Sri. A.Kumar, learned counsel forthe appellant is that, while deciding the case in Kerala SpongeIron Ltd.(supra), this court had failed to take note of the principlesettled in the decisions of the High Court of Gujarat in RadheDevelopers(supra) and Shilpa Dyeing & Printing Mills (P) Ltd.(supra) and also the decision of the High Court of Madras inChensing Ventures (supra) as well as the decisions of theHonourable Supreme Court relied upon in those cases. It isfurther pointed out that this court while deciding Kerala SpongeIron Ltd. (supra) had also omitted notice of an earlier decision of -:14:- this court in P.D Abraham(supra), which was decided in March2014. One of the issues considered in P.D Abraham(supra) wasthat, whether in the absence of any satisfactory explanationregarding source of the creditor, can it be said that the credit isnot a business income. Referring to the decisions of theHonourable Supreme Court in Lakhmichand Baijnath v.Commissioner of Income Tax [(1959) 35 ITR 416 (SC)], inwhich it was found that it is not unreasonable to infer that theaddition made under Section 68 is receipt from the business ofthe assessee; and also relying on the decision of this Court inAnnamalai Reddiar v. Commissioner of Income Tax [53 ITR601 (Ker). the tribunal in the said case had formed an opinionthat exercise of Section 263 was not warranted. But this Court inthe said case found that the finding of the Assessing Officerbased on the above said proposition cannot be treated aserroneous. In Lakhmi Chand Baijnath(supra) the apex courtfound that, even if the explanation given by the assessee as to how the amount came to be received is rejected as untenable, the credits were treated as business receipt which arechargeable. It was found that, in view of such a proposition heldby the Honourbale Supreme Court, the exercise made underSection 263 by the Commissioner was unsustainable.12.On the basis of the contentions as mentioned above,it was argued on behalf of the appellant that, the incomeassessed, with respect to which it was found that there is noproper explanation forthcoming and which was found credited inthe books of accounts, need to be treated as 'income from othersources' with respect to which set off can be permitted underSection 72 of the Act against the unabsorbed portion ofdepreciation, which will fall within the category of Section 32(2)of the Act. It is further contended that the carry forwardunabsorbed portion of depreciation can be allowed set offagainst the profit and gains of any business and going by subsection (2) of Section 72, such carry forward amounts coming within the purview of Section 32(2) shall be adjusted. In thisregard, the learned counsel had placed reliance on a decision ofthe High Court of Madras in Commissioner of Income Tax v.Spell Semiconductor Ltd. [(2013) 212 Taxman 506]. It is heldtherein that, if the assessee had income under other heads,Section 32(2) provides relief and Section 72(2) does not preventset off of the carried forward depreciation being given underhead of income from business or income from other sources. Itwas explained that, as far as the income from other sources areconcerned, there is provisions for set off of the unabsorbeddepreciation allowance as against the income from other sourcesas contemplated under Section 32(2). Therefore, it is notnecessary that one should wait for the assessee to earn incomefrom business so as to exhaust the carry forward loss to be setoff against the business income and then apply the unabsorbeddepreciation. A reading of Section 32(2) thus makes it clear thatif the unabsorbed depreciation allowance would not be wholly set I.T.A. No.20/2019 off under clause (i) and clause (ii), the amount of depreciation not set off can be set off from income from other head, if any,available for the assessment year. It was observed that thelanguage of Section 32(2) is very clear and there is hardlyanything contained in Section 32(2) to prevent such set off ofcarried forward depreciation being given to the assessee underthe head of income from business or income from other sources.13.Controverting the arguments on behalf of theappellant, learned Standing Counsel for Government of India(Taxes) made an elaborate scanning of the various provisionsunder which the scheme of the Act is framed. Referring to thecharging provision in Section 4, it is pointed out that the incometax shall be charged with respect to the total income of everyperson for the previous year. Section 5 provides that the totalincome includes all income from whatever sources derived. Suchincome takes in the income which is deemed to have accrued,going by sub-section (1)(b) of Section 5. The method of computation of tax is governed under the provisions of Section14 to Section 59. Section 14 would provide that, whilecomputing the total income for the purpose of charging of incometax, the income shall be classified under different heads,provided therein. Therefore, for the purpose of computation ofincome tax the income need to be classified under any one ofthe heads contained in Section 14. But, apart from theclassifications contained in Section 14, there are other groups orclass of income for which separate method of computation isprovided under different provisions of the Act. For example, it ispointed out that, Section 158(b) provides special procedure forassessment of undisclosed income unearthed through search orseizure conducted under Section 32 of the Act. It is pointed outthat Section 115BBE is a similar special provisions introducedwith respect to any undisclosed income coming within thepurview of Sections 68, 69, 69A, 69B, 69C and 69D. It is pointedout that Section 115BBE was introduced in the statute book -:19:- -:19:- through Finance Act, 2012, with effect from 1.4.2013. Sub-section (2) of Section 115 BBE as it stood with effect from1.4.2013 provides that, notwithstanding anything contained in theAct, no deduction in respect of any expenditure or allowanceshall be allowed to the assessee under any provisions of this Actin computing his income referred to in clause (a) of sub-section(1). Therefore it is clear that, with respect to any sum for whichproper explanation is not forthcoming and which is credited in thebooks, which is liable to be assessed under Section 68, nodeduction in respect of any expenditure or allowance can bepermitted. It is pertinent to note that, by virtue of a furtheramendment introduced to Section 115BBE through the FinanceAct, 2016, which was brought with effect from 01.04.2017, set offof any loss was also excluded with respect to the incomereferred to under Section 68 of the Act. Contention of theStanding Counsel is that, the method of computation withrespect to profits and gains of business, the provision enumerated under Section 28 and 29 of the Act provides that ithas to be computed in accordance with the methods providedunder Sections 30 to 43(d). The depreciation, which remainsunabsorbed, need to be treated as carried forward loss inaccordance with provisions contained under Section 32. Sincethe undisclosed income cannot be treated as an income fromprofits and gains of the business, no set off can be allowedagainst the unabsorbed portion of depreciation carried forward,is the contention. 14.Based on the rival contentions, on analyzing thefactual situation, it is evident that the assessment pertains to theperiod from 1[st] April 2013 to 31[st] March 2014. It is not in disputethat the addition of Rs.56,24,264/- made in the assessment isundisclosed income coming within the purview of Section 68, itbeing a sum found credited in the books of the assessee withrespect to which the explanation offered was not found to besatisfactory by the Assessing Officer. Since Section 115BBE was introduced with effect from 01.04.2013, it cannot be disputed thatno deduction in respect of any expenditure or allowance can beallowed with respect to the said amount. But question is whetherset off of any loss shall be allowed against the said undisclosedincome. In order to decide the question it is crucial to decide thenature of such income. Contention for the revenue is that, it willnot fall within any of the category of income under theclassifications contained in Section 14. In other words, suchincome cannot be treated as “profits and gains of business” or itcannot be considered as “income from other sources”. As theprovisions of law which stood applicable for the relevant year ofassessment, there is a specific bar with respect to allowing anydeductions from such income, by virtue of Section 115BBE, as itstood unamended. The amendment declining set off wasintroduced only with effect from 1.4.2017. Therefore, questionwhether set off permissible under Section 72(2) read withSection 32(2) of the Act would apply with respect to the said -:22:- -:22:- income, assumes importance. There again, the crucial aspectrelevant for consideration is the nature of the said income. In oneof the oldest cases decided by the Honourable Supreme Court,Govindarajulu Mudaliar v. Commissioner of Income Tax[(1958) 34 ITR 307] it is held that, “there is ample authority forthe position that where an assessee fails to prove satisfactorilythe source and nature of certain amounts of cash receivedduring the accounting year, the Income Tax Officer is entitled todraw an inference that the receipts are of an assessable nature”.Following the said observations in Lakhmi Chand Baijnath(supra) the Honourable Supreme Court observes that, “when anamount is credited in the business books, it is not anunreasonable inference to draw that it is a receipt frombusiness”. Even though Standing Counsel contended that thesaid observations of the apex court cannot be treated as aprecedent of binding nature, mainly because it is made withrespect to the provisions contained in the erstwhile Income Tax Act of 1922, we are not persuaded to accept the same. It is basically on an identical circumstance that the apex court hadfound that the income credited in the business book with respectto which the assessee fails to prove satisfactorily the source andthe nature of receipt of the amount, it shall be deemed to be ofreceipt from business. The decisions of the High Court ofMadras in Chensing Ventures (supra) as well as the decision ofthe High Court of Gujarat in Shilpa Dyeing & Printing Mills(supra) are to the effect that income of such nature fromundisclosed source need to be treated as income from othersources. Therefore, we are of the opinion that the undisclosedincome assessed under Section 68 need not be treated as anincome falling totally outside the ambit of the classificationscontained in Section 14 of the Act. Even assuming for the sakeof argument that, it will not fall within the classifications containedin Section 14, it is evident that, as on the date of the assessmentsuch income was included under a special classification by virtue I.T.A. No.20/2019 -:24:- of Section 115BBE. It is pertinent to note that, 115BBE hadprohibited allowance of deductions alone, as it stood unamendedas on the relevant date of the assessment. The explanatorynotes to the provisions of the Finance Act, 2016 enumerates thereasons for introduction of the further amendment barring the setoff, with effect from 1.4.2017. It is stated that, “Currently, there is uncertainty on the issue of set-off of losses against income referred to in Section115BBE of the Income Tax Act. The matter hasbeen carried to judicial forums and courts in somecases has taken a view that losses shall not beallowed to be set-off against income referred to inSection 115BBE. However, the current languageof Section 115BBE of the Income-Tax Act does notconvey the desired intention and as a result thematter is litigated. In order to avoid unnecessarylitigation, the provision of the sub-section (2) ofSection 115BBE of the Income Tax Act has beenamended as to expressly provide that no set offany loss shall be allowable in respect of incomeunder the Section 68 or Section 69 or Section 69Aor Section 69C or Section 69D.” “Currently, there is uncertainty on the issue of set-off of losses against income referred to in Section115BBE of the Income Tax Act. The matter hasbeen carried to judicial forums and courts in somecases has taken a view that losses shall not beallowed to be set-off against income referred to inSection 115BBE. However, the current languageof Section 115BBE of the Income-Tax Act does notconvey the desired intention and as a result thematter is litigated. In order to avoid unnecessarylitigation, the provision of the sub-section (2) ofSection 115BBE of the Income Tax Act has beenamended as to expressly provide that no set offany loss shall be allowable in respect of incomeunder the Section 68 or Section 69 or Section 69Aor Section 69C or Section 69D.” The intention of the legislature in introducing the amendment, asstated in the explanatory note, is to avoid unnecessary litigationand to expressly provide that no set off of any loss shall beallowable in respect of income under Section 68. Therefore, ithas to be held that, as on the relevant date of the assessment,there was no bar existed with respect to allowing set off againstthe carried forward unabsorbed depreciation on fixed assets,with respect to income under Section 68. Therefore, we are ofthe view that, Tribunal had committed an illegality in coming tothe conclusion that the deemed income will not fall even underthe head of income from other sources and therefore thedeductions and set off applicable to income under other headswill not be attracted in the case of deemed income coveredunder the provisions of Section 68. Accordingly we answer thequestion of law under clause (F) in favour of the Assessee andas against the Revenue. In view of the decision of the saidquestion of law, other questions framed are not of consequence I.T.A. No.20/2019 -:26:- and become irrelevant. 15.Hence, the above appeal is hereby allowed and theimpugned order of the tribunal is set aside. The original order of assessment passed by the Assessing Officer on 30.03.2016 willstand sustained. Needless to observe that, any coercive stepsfor recovery initiated based on the revised assessment cannotbe allowed to continue. Sd/- C.K. ABDUL REHIM, JUDGE. Sd/- R. NARAYANA PISHARADI, JUDGE. ul/lsn/- // True copy // P.S. to Judge. APPENDIX PETITIONER'S/S EXHIBITS:ANNEXURE-ATRUE COPY OF THE ASSESSMENT ORDER DATED30/3/2016 ANNEXURE-BTRUE COPY OF THE SUO MOTTU REVISION ORDER OF THE CIT DATED 16/01/2018ANNEXURE-CTRUE COPY OF THE ORDER OF THE HON'BLE TRIBUNAL DATED 28/11/2018 ANNEXURE-DTRUE COPY OF THE ASSESSMENT ORDER DATED17/04/2018ANNEXURE-ETRUE COPY OF THE NOTICE DATED 04/02/2019