ACIT, Jaipur V. SANJAY BAIRATHI GEMS LIMITED, Jaipur

ITA 157/JPR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2138 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 21-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S KOTHARI CIT DH LS
• Assessee Lawyers: P C PARWAL CA DHK
• Keywords: Unexplained investment; Unexplained expenditure; Business income; Salary income; Deemed to accrue or arise in india; Retrospective amendment; Question of law; Surrender of tenancy right
• Section: 69C; 143(3); 133A; 68; 69; 56; 132

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO.157/JP/17 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14 THE ASST. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, JAIPUR. CUKE VS. M/S SANJAY BAIRATHI GEMS LTD., 4/193, JAWAHAR NAGAR, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. : AAJCS9355G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI D.S. KOTHARI ( CIT) FU/KZKFJRHDH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 09.05.2017 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT: 08/08/2017. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-4, JAIPUR DATED 20.12.2016 FOR A.Y. 2013-14. THE GROUN DS OF APPEAL TAKEN BY THE REVENUE ARE AS UNDER:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS JUSTIFIED IN TREATING THE UNDISCLOSED IN VESTMENT IN STOCK AS BUSINESS INCOME OF THE ASSESSEE WITHOUT APPRECIATIN G THE FACT THAT EXCESS STOCK SURRENDERED DURING THE COURSE OF SEARC H PROCEEDINGS WAS NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNTS OF TH E ASSESSEE AND IT WAS CLEARLY UNDISCLOSED INVESTMENT AS PER THE PROVI SIONS OF SECTION 69B. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS JUSTIFIED IN ALLOWING THE SET OFF THE LOSS OF R S. 86,96,733/- AGAINST ITA NO.157/JP/17 ACIT, CC-2 VS M/S SANJAY BAIRATHI GEMS LTD., JAIPUR 2 THE EXCESS STOCK OFFERED FOR TAX DURING THE SEARCH PROCEEDINGS WITHOUT APPRECIATING THE FACT THAT NO LOSS CAN BE SET OFF I N CONTRAVENTION TO THE PROVISION OF SECTION 70 OR 71 AGAINST THE SURRENDER ED INCOME ASSESSED AS DEEMED INCOME U/S 69B. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS JUSTIFIED IN DIRECTING TO CHANGE TAX AT NORMAL RATE ON SURRENDER INCOME ON ACCOUNT OF UNDISCLOSED INVESTMENT IN STOC K ASSESSED AS DEEMED INCOME U/S 69B AGAINST TAX CHARGED AT SPECIA L RATE U/S 115BBE. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE COMPANY IS ENGAGED IN THE BUSINESS OF EXPORT, IMPORT AND MANUFACTURE O F PRECIOUS & SEMI PRECIOUS STONES AND JEWELLERY. A SURVEY U/S 133A WAS CONDUCT ED ON 31.10.2012 AT THE BUSINESS PREMISES OF THE ASSESSEE WHICH WAS CONVERT ED INTO SEARCH. 2.1 DURING THE SURVEY, THE ASSESSEES MANAGER, SHRI RAKESH SHARMA, IN REPLY TO QUESTION NO. 21 ADMITTED TO EXCESS STOCK O F RS. 2,43,77,004/-. THIS WAS CONFIRMED BY SHRI SANJAY BAIRATHI, DIRECTOR OF THE ASSESSEE COMPANY IN REPLY TO QUESTION NO. 17. THEREAFTER ON VERIFICATIO N, SHRI SANJAY BAIRATHI VIDE LETTER DATED 04.02.2013 (REPRODUCED AT PAGES 4 & 5 OF AO ORDER) EXPLAINED THAT THE CORRECT EXCESS STOCK FOUND IN SURVEY WORKS OUT TO RS. 231.41 LAKHS AS AGAINST THE AMOUNT OF RS. 243.77 LAKHS WORKED OUT A T THE TIME OF SURVEY DUE TO THE VALUATION OF THE STOCK AT MARKET PRICE INSTE AD OF THE PURCHASE PRICE. 2.2 IN THE RETURN OF INCOME FILED FOR THE YEAR UNDE R CONSIDERATION, THE ASSESSEE CREDITED THE AMOUNT OF EXCESS STOCK OF RS. 2,31,41,217/- IN THE TRADING ACCOUNT AND DECLARED AN INCOME OF RS. 1,44, 61,040/- (AFTER CONSIDERING THE LOSS IN BUSINESS). 2.3 THE AO ACCEPTED THE VALUE OF EXCESS STOCK SURRE NDERED IN SEARCH AT RS. 2,31,41,217/-. HOWEVER, HE ASSESSED THE INCOME ON A CCOUNT EXCESS STOCK U/S ITA NO.157/JP/17 ACIT, CC-2 VS M/S SANJAY BAIRATHI GEMS LTD., JAIPUR 3 69B. HE FURTHER DID NOT ALLOW THE SET OFF BUSINESS LOSS AGAINST THE EXCESS STOCK BY APPLYING THE PROVISIONS OF SECTION 115BBE AND RELIED ON THE DECISION OF HONBLE PUNJAB AND HARYANA HIGH COURT IN CASE OF M/S KIM PHARMA PRIVATE LIMITED VS. CIT (ITA NO. 106 OF 2011 DATED 27.04.20 11) AND LIBERTY INDIA VS. ACIT AMBALA. 2.4 THE LD. CIT(A) HELD THAT SINCE THE EXCESS STOCK IS A RESULT OF SUPPRESSION OF PROFIT FROM THE BUSINESS OVER THE YE ARS AND HAS NOT BEEN KEPT IDENTIFIABLE SEPARATELY BUT IS A PART OF OVERALL PH YSICAL STOCK FOUND, THE INVESTMENT IN EXCESS STOCK HAS TO BE TREATED AS BUS INESS INCOME. BY RELYING ON THE DECISION OF HONBLE ITAT, JAIPUR BENCH IN CA SE OF RAMNARAYAN BIRLA HE HELD THAT THE EXCESS STOCK SO FOUND IS PART OF REGU LAR BUSINESS, THE SAME IS TO BE TAXED UNDER THE BUSINESS INCOME. HE FURTHER HELD THAT THE AMENDMENT TO THE PROVISO OF SECTION 115BBE WHEREIN THE WORD OR SET OFF OF ANY LOSS IS INTRODUCED BY FINANCE ACT, 2016 W.E.F. 01.04.2017, SET OFF OF BUSINESS LOSS DURING THE YEAR AGAINST THE EXCESS STOCK FOUND IN T HE SEARCH OPERATION IS ALLOWABLE. 3. WE NOW REFER TO THE RELEVANT FINDINGS OF THE LD. CIT(A) WHICH ARE UNDER CHALLENGE BEFORE US. THE SAME ARE REPRODUCED AS UN DER:- 3.1.3 I HAVE DULY CONSIDERED ASSESSS SUBMISSION AN D CAREFULLY GONE THROUGH ASSESSMENT ORDER. I HAVE ALSO TAKEN A NOTE OF FACTUAL MATRIX OF THE CASE AS WELL AS APPLICABLE CASE LAWS RELIED UPO N. THE FACTUAL POSITION OF THE CASE IS SUMMARIZED AS UNDER: A) A SURVEY OPERATION U/S 133A OF THE ACT WAS CARRI ED OUT ON 31.10.2012 AT THE BUSINESS PREMISES OF THE ASSESSEE , WHICH WAS CONVERTED INTO SEARCH U/S 132 OF THE ACT. IN THE SW ORN STATEMENT RECORDED ON OATH U/S 132(4) OF THE ACT, ASSESSEE, I N REPLY TO QUESTION NO. 21; ADMITTED THE EXCESS STOCK OF RS. 2,43,77,00 4/-. LATER ON, AFTER VERIFICATION, THE ASSESSEE VIDE LETTER DATED 4.02.2 013 EXPLAINED THAT THE CORRECT EXCESS STOCK FOUND IN SEARCH OPERATION WORK S OUT TO RS. 231.41 ITA NO.157/JP/17 ACIT, CC-2 VS M/S SANJAY BAIRATHI GEMS LTD., JAIPUR 4 LAKH AS AGAINST THE AMOUNT OF RS. 243.77 LAKH WORKE D OUT AT THE TIME OF SEARCH OPERATION. THE ASSESSEE FURTHER EXPLAINED TH AT THE EXCESS STOCK IS DUE TO THE VALUATION OF THE STOCK AT MARKET PRIC E INSTEAD OF THE PURCHASE PRICE. B) SWORN STATEMENT RECORDED U/S 132(4) OF LKTHE ACT ON 31.10.2012 OF SH SANJAY BAIRATHI IN ANSWER TO Q NO 16,17,18 & 19 AND ANSWER TO Q NO 21 OF STATEMENT RECORDED U/S 133A OF SH RAKESH KUMA R SHARMA, MANAGER OF M/S SANJAY BAIRATHI GEMS LD ARE REPRODUC ED HERE AS UNDER:- C) AO HAS MADE THE ADDITION OF RS. 2,31,41,217/= U/ S 69B OF THE ACT AND THEREAFTER INVOKED THE PROVISIONS OF SEC 115BBE OF THE ACT AND NOT ALLOWED SET OFF OF BUSINESS LOSS AGAINST THE ADDITI ON MADE. THE ASSESSEE VIDE LETTER DT 09.03.2015 HAS MADE SUBMISS ION BEFORE THE AO. FORM THE ABOVE, IT IS SEEN THAT ASSESSEE HAS SHOWN NET BUSINESS INCOME RS. 1,44,44,484/= IN ITR FILED ON 28/9/2013 VIDE ACKNOWLEDGMENT NO 799563911280913 FOR THE AY 2013-1 4. D) IT IS PERTINENT TO MENTION HERE THAT APPLICABILI TY OF SET OFF PROVISION AS CONTAINED IN SEC. 115BBE OF THE ACT IS EFFECTIVE FROM 1.4.2017. E) AO HAS RELIED ON THE DECISION OF CASES DECIDED B Y HONBLE PUNJAB & HARYANA HIGH COURT IN KIM PHARMA PVT. LTD. (CITED S UPRA) AND LIBERTY INDIA (CITED SUPRA). IT IS SUBMITTED THAT IN CASE O F KIM PHARMA (P.) LIMITED REPORT IN 258 CTR 454 AMOUNTS SURRENDERED I N COURSE OF SURVEY WAS NOT REFLECTED IN BOOKS OF ACCOUNTS AND NO SOURC E FROM WHERE IT WAS DERIVED WAS DECLARED BY THE ASSESSEE AND THEREFORE IT WAS HELD THAT THE SAME CANNOT BE ASSESSED AS BUSINESS INCOME. IN THIS CASE THE DECISION OF KARNATAKA HIGH COURT IN CASE OF CIT V. S.K. SRIG IRI AND BROS 298 ITR 13 RELIED BY THE ASSESSEE WAS DISTINGUISHED BY HOLD ING THAT IN THIS CASE ASSESSEE RECEIVED ADDITIONAL INCOME FROM BUSINESS O NLY. BUT IN THE PRESENT CASE ALSO THE EXCESS STOCK OFFERED IN SURVE Y IS PART OF THE BUSINESS INCOME. THE EXCESS STOCK IS DETERMINED BY VALUING THE BUSINESS STOCK AT CURRENT PRICE INSTEAD OF THE PURC HASE PRICE. NOTHING WAS BROUGHT TO SUGGEST THAT THIS WAS NOT A REGULAR ITEM OF THE STOCK DEALT BY THE ASSESSEE. IN VIEW OF THIS, IT IS SUBMI TTED THAT THE CASE LAW RELIED BY THE AO IS NOT APPLICABLE. ITA NO.157/JP/17 ACIT, CC-2 VS M/S SANJAY BAIRATHI GEMS LTD., JAIPUR 5 F) ASSESSEE HAS RELIED ON THE DECISION OF FOLLOWING FAVOURABLE CASES: (I) CHOKSI HIRALAL MAGANLAL (ITAT)(AHMADABAD) (II) FASHION WORLD (ITAT) (AHMADABAD) (III) RAMNARAYAN BIRLA (ITAT JAIPUR) IN CASE OF CHOKSI HIRALAL MAGANLAL (CITED SUPRA) HO NBLE ITAT BENCH AHMADABAD HAS HELD THAT EXCESS STOCK FOUND DURING T HE SURVEY IS NOT SEPARATELY AND CLEARLY IDENTIFIABLE BUT IS PART OF MIXED LOTS OF STOCK FOUND AT THE PREMISES WHICH INCLUDED DECLARED STOCK AS PER BOOKS AND ALSO THE EXCESS STOCK AS COMPUTED BY THE AUTHORIZED OFFICER, THE PROVISIONS OF SECTION 69B OF THE ACT CANNOT BE MADE APPLICABLE AS PRIMARY CONDITION FOR INVOKING THE PROVISIONS OF SE CTION 69A, 69B OF THE ACT IS THAT THE ASSET SHOULD BE SEPARATELY IDENTIFI ABLE AND IT SHOULD HAVE INDEPENDENT PHYSICAL EXISTENCE OF ITS OWN. SIN CE EXCESS STOCK IS A RESULT OF SUPPRESSION OF PROFIT FROM BUSINESS OVER THE YEARS AND HAS NOT BEEN KEPT IDENTIFIABLE SEPARATELY BUT IS THE PAT OF OVERALL PHYSICAL STOCK FOUND, THE INVESTMENT IN THE EXCESS STOCK HAS TO BE TREATED AS BUSINESS INCOME AS PER DETAILED REASONS GIVEN IN THE CASE OF FASHION WORLD VS. ACIT ITA NO. 1634/AHD/2006 WHEREIN, THE HONBLE TRI BUNAL HELD THAT, IF EXCESS STOCK FOUND DURING THE COURSE OF SURVEY OR S EARCH AND DOES NOT HAVE ANY INDEPENDENT IDENTITY AS AN ASSET BUT AS MI XED PART OF OVERALL STOCK FOUND IN THE SURVEY/SEARCH THEN SUCH EXCESS S TOCK WOULD REPRESENT BUSINESS INCOME ONLY. FURTHER, IN CASE OF THE HONBLE ITAT BENCH JAIPUR I N CASE OF DCIT V. RAMNARAYAN BIRLA 482/JP/2015 DATED 30.09.2016 IN TH E SIMILAR FACTS HELD THAT THE EXCESS STOCK IS TO BE ASSESSED AS PAR T OF THE NORMAL STOCK AND TO BE TAXED UNDER THE HEAD INCOME FROM BUSINESS . BY FOLLOWING THE DECISION OF COORDINATE BENCH IN THE CASE OF CHOKSHI HIRALAL MAGANLAL VS. DCIT, 141 TTJ (AHD.) 1 HAS HELD THAT IN A CASES WHE RE SOURCE OF INVESTMENT/EXPENDITURE IS CLEARLY IDENTIFIABLE AND ALLEGED UNDISCLOSED ASSET HAS NO INDEPENDENT EXISTENCE OF ITS OWN OR TH ERE IS NO SEPARATE PHYSICAL IDENTITY OF SUCH INVESTMENT/EXPENDITURE TH EN FIRST WHAT IS TO BE TAXED IS THE UNDISCLOSED BUSINESS RECEIPT INVESTED IN UNIDENTIFIABLE UNACCOUNTED ASSET AND ONLY ON FAILURE IT SHOULD BE CONSIDERED TO BE TAXED UNDER SECTION 69 ON THE PREMISES THAT SUCH EX CESS INVESTMENT IS NOT RECORDED IN THE BOOKS OF ACCOUNT AND ITS NATURE AND SOURCE IS NOT ITA NO.157/JP/17 ACIT, CC-2 VS M/S SANJAY BAIRATHI GEMS LTD., JAIPUR 6 IDENTIFIABLE. ONCE SUCH EXCESS INVESTMENT IS TAXED AS UNDECLARED BUSINESS RECEIPT THEN TAXING IT FURTHER AS DEEMED I NCOME UNDER SECTION 69 WOULD NOT BE NECESSARY. FROM THE ABOVE, IT IS SEEN THAT THE EXCESS STOCK FO UND DURING THE SEARCH OPERATION IS NOT SEPARATELY AND CLEARLY IDEN TIFIABLE BUT IS PART OF MIXED LOTS OF STOCK FOUND AT THE PREMISES WHICH INC LUDED DECLARED STOCK AS PER BOOKS AND ALSO THE EXCESS STOCK AS COMPUTED BY THE AUTHORIZED OFFICERS DURING THE SEARCH OPERATION AT THE PREMISE . SINCE EXCESS STOCK IS A RESULT OF SUPPRESSION OF PROFIT FROM BUSINESS OVER THE YEARS AND HAS NOT BEEN KEPT IDENTIFIABLE SEPARATELY BUT IS THE PA RT OF OVERALL PHYSICAL STOCK FOUND, THE INVESTMENT IN THE EXCESS STOCK HAS TO BE TREATED AS BUSINESS INCOME. FURTHER, THE EXCESS STOCK SO FOUND IS PART OF THE REGULAR BUSINESS, THEREFORE, FOLLOWING DECISION OF HONBLE ITAT BENCH JAIPUR IN CASE OF RAM NARAYAN BIRLA (CITED SUPRA), THE SAME HAS TO BE TAXED UNDER THE BUSINESS INCOME. OTHERWISE EVEN IF THE SAME IS TAXED U/S 115BBEOF THE ACT, THE PROVISIONS OF NOT ALLOWIN G THE SET OFF HAS COME INTO EFFECT FROM 1.4.2017. 4. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT THE ISSUE IN THIS GROUND IS UNDER WHICH HEAD THE UNEXPLAINED INVESTME NT SHOULD BE TAXED. IN THIS CONNECTION IT WOULD BE RELEVANT TO REFER TO TH E OVERALL SCHEME OF THE ACT WHICH IS AS UNDER:- A) SECTION 4 DEALS WITH CHARGE OF INCOME TAX. THIS SECTION PROVIDES THAT TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON SHALL BE CHARGED TO INCOME TAX AT THE RATE PROVIDED IN THE ACT. SECTION 5 PROVIDES TH AT TOTAL INCOME OF ANY PREVIOUS YEAR OF A PERSON WHO IS A RESIDENT INCLUDE S ALL INCOME FROM WHATEVER SOURCE DERIVED. B) CHAPTER IV DEALS WITH THE COMPUTATION OF THE TOT AL INCOME. SECTION 14 OF THIS CHAPTER DEALS WITH THE HEADS OF INCOME. THI S SECTION READ AS UNDER:- SAVE AS OTHERWISE PROVIDED BY THIS ACT, ALL INCOME SHALL, FOR THE PURPOSES OF CHARGE OF INCOME-TAX AND COMPUTATION OF TOTAL INCOM E, BE CLASSIFIED UNDER THE FOLLOWING HEADS OF INCOME:- A.SALARIES. ITA NO.157/JP/17 ACIT, CC-2 VS M/S SANJAY BAIRATHI GEMS LTD., JAIPUR 7 B.[***] C.INCOME FROM HOUSE PROPERTY. D.PROFITS AND GAINS OF BUSINESS OR PROFESSION. E.CAPITAL GAINS. F.INCOME FROM OTHER SOURCES. C) CHAPTER V DEALS WITH INCLUSION IN THE TOTAL INCO ME OF AN ASSESSEE, INCOME OF OTHER PERSONS AND CHAPTER VI DEALS WITH AGGREGATION OF THE TOTAL INCOME AND SET OFF OR CARRY FORWARD OF LOSSES. SECTION 69B FAL LS IN CHAPTER VI. AS PER THIS SECTION WHERE IN ANY FINANCIAL YEAR ASSESSEE HAS MA DE INVESTMENT OR IS FOUND TO BE OWNER OF ANY VALUABLE ARTICLE ETC. WHICH IS N OT RECORDED IN THE BOOKS OF ACCOUNTS OR FOR WHICH NO EXPLANATION OR SATISFACTOR ILY EXPLANATION IS GIVEN, SUCH AMOUNT MAY BE DEEMED TO BE THE INCOME OF THE A SSESSEE FOR SUCH FINANCIAL YEAR. D) FROM THE PLAIN READING OF ALL THESE PROVISIONS I T IS EVIDENT THAT WHATEVER INCOME IS INCLUDED IN THE TOTAL INCOME, THE SAME HA S TO BE CLASSIFIED UNDER THE FIVE HEADS OF INCOME AS PROVIDED IN SECTION 14. THE REFORE, ANY CREDIT IN THE BOOKS OF ACCOUNTS WHICH IS NOT SATISFACTORILY EXPLA INED OR ANY INVESTMENT WHICH IS NOT FOUND RECORDED OR OTHERWISE EXPLAINED AND TAXED U/S 68, 69, 69A, 69B OR 69C HAS TO BE TAXED UNDER ANY ONE OF TH E ABOVE FIVE HEADS. IF SUCH INCOME CANT BE LINKED TO ANY OF THE FIRST FOU R HEADS AS PROVIDED IN SECTION 14, IT HAS TO BE ASSESSED UNDER THE FIFTH H EAD I.E. INCOME FROM OTHER SOURCES. SECTION 56 (1) ALSO PROVIDES THAT INCOME OF EVERY K IND WHICH IS NOT TO BE EXCLUDED FROM THE TOTAL INCOME UNDER THIS HEAD S HALL BE CHARGEABLE TO INCOME TAX UNDER THE HEAD INCOME FROM OTHER SOURCE S, IF IT IS NOT CHARGEABLE TO INCOME TAX UNDER ANY OF THE HEADS SPE CIFIED IN SECTION 14, ITEM A TO E THUS EVEN AN INCOME ASSESSABLE UNDER SECTION 69B H AS TO BE GIVEN A SPECIFIC HEAD IN TERMS OF SECTION 14 AND IN CASE IT CANT BE GIVEN ANY SPECIFIC ITA NO.157/JP/17 ACIT, CC-2 VS M/S SANJAY BAIRATHI GEMS LTD., JAIPUR 8 HEAD AS PER ITEM A TO E OF SECTION 14, IT HAS TO BE GIVEN THE RESIDUARY HEAD I.E. ITEMS F OF SECTION 14. E) IT MAY ALSO BE NOTED THAT CHAPTER XII OF THE ACT PROVIDES FOR DETERMINATION OF THE TAX IN CERTAIN SPECIAL CASES. EVEN WHEN TAX IS TO BE CHARGED ON CERTAIN INCOME IN THIS CHAPTER AT A SPECIFIC RATE, STILL SU CH INCOME HAS TO BE CLASSIFIED UNDER ANY ONE OF THE HEADS PROVIDED IN SECTION 14. FOR EXAMPLE SHORT TERM CAPITAL GAIN U/S 111A IN CERTAIN CASES IS CHARGED @ 15%, LONG TERM CAPITAL GAIN U/S 112 IS CHARGED @20%, WINNING FROM LOTTERIE S, CROSS WORD PUZZLES ETC CHARGEABLE TO TAX @30%, STILL FOR THE PURPOSE OF IN CLUSION OF SUCH INCOME IN THE TOTAL INCOME OF SUCH ASSESSEE, A SPECIFIC HEAD IN TERMS OF SECTION 14 HAS TO BE GIVEN. F) SECTION 14 STARTS WITH THE WORDS SAVE AS OTHERWISE PROVIDED BY THIS ACT, ALL INCOME WOULD BE CLASSIFIED UNDER THE 5 HEADS OF INC OME MENTIONED THEREIN. THE ACT HAS NOT PROVIDED ANY HEAD OF INCOME OTHER T HAN THESE 5 HEADS OF INCOME. SECTION 69B FALLS IN CHAPTER VI WHICH IS TI TLED AS AGGREGATION OF INCOME. THEREFORE INCOME FALLING U/S 68, 69, 69A, 6 9B, 69C AND 69D HAVE TO BE AGGREGATED WITH ANY OF THE 5 HEADS OF INCOME MEN TIONED IN SECTION 14. 4.1 IN THIS BACKGROUND OF THE SCHEME OF THE ACT, TH E QUESTION WHICH ARISES FOR THE DETERMINATION IS THAT UNDER WHICH HEAD OF I NCOME THE EXCESS STOCK/INVESTMENT FOUND IN SEARCH AND OFFERED BY THE ASSESSEE FOR TAX IS TO BE ASSESSED. ACCORDING TO THE ASSESSEE SUCH EXCESS STO CK/INVESTMENT IS A BUSINESS STOCK/INVESTMENT WHICH HAS ARISEN OUT OF T HE UNRECORDED BUSINESS ACTIVITY OF THE ASSESSEE AND THEREFORE THE SAME NEE DS TO BE ASSESSED UNDER THE HEAD PROFIT & GAIN OF BUSINESS. FOR THIS PURPOS E RELIANCE IS PLACED ON THE DECISION OF ITAT AHMEDABAD BENCH IN CASE OF CHOKSHI HIRALAL MAGANLAL VS. DCIT 141 TTJ (AHD) 1 DT. 21/01/2011 WHEREIN THE TRIBUNAL HELD THAT EXCESS ITA NO.157/JP/17 ACIT, CC-2 VS M/S SANJAY BAIRATHI GEMS LTD., JAIPUR 9 STOCK FOUND DURING THE SURVEY IS NOT SEPARATELY AND CLEARLY IDENTIFIABLE BUT IS PART OF MIXED LOTS OF STOCK FOUND AT THE PREMISES W HICH INCLUDED DECLARED STOCK AS PER BOOKS AND ALSO THE EXCESS STOCK AS COM PUTED BY THE SURVEY OFFICERS, THE PROVISIONS OF SECTION 69B CANNOT BE M ADE APPLICABLE AS PRIMARY CONDITION FOR INVOKING THE PROVISIONS OF SECTION 69 A, 69B IS THAT THE ASSET SHOULD BE SEPARATELY IDENTIFIABLE AND IT SHOULD HAV E INDEPENDENT PHYSICAL EXISTENCE OF ITS OWN. SINCE EXCESS STOCK IS A RESUL T OF SUPPRESSION OF PROFIT FROM BUSINESS OVER THE YEARS AND HAS NOT BEEN KEPT IDENTIFIABLE SEPARATELY BUT IS THE PART OF OVERALL PHYSICAL STOCK FOUND, TH E INVESTMENT IN THE EXCESS STOCK HAS TO BE TREATED AS BUSINESS INCOME AS PER D ETAILED REASONS GIVEN IN THE CASE OF FASHION WORLD VS. ACIT ITA NO. 1634/AHD /2006 WHEREIN, THE TRIBUNAL HELD THAT, IF EXCESS STOCK FOUND DURING TH E COURSE OF SURVEY OR SEARCH AND DOES NOT HAVE ANY INDEPENDENT IDENTITY AS AN AS SET BUT AS MIXED PART OF OVERALL STOCK FOUND IN THE SURVEY/SEARCH THEN SUCH EXCESS STOCK WOULD REPRESENT BUSINESS INCOME ONLY. 4.2 RECENTLY THE HONBLE ITAT JAIPUR BENCH IN CASE OF DCIT VS. RAMNARAYAN BIRLA 482/JP/2015 DATED 30.09.2016 IN TH E SIMILAR FACTS HELD THAT THE EXCESS STOCK IS TO BE ASSESSED AS PART OF THE N ORMAL STOCK AND TO BE TAXED UNDER THE HEAD INCOME FROM BUSINESS. THE RELEVANT F INDING OF THE ITAT IS AS UNDER:- WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MA TERIAL AVAILABLE ON RECORD. UNDISPUTED FACTS EMERGED FROM THE RECORD TH AT AT THE TIME OF SURVEY EXCESS STOCK WAS FOUND. IT IS ALSO NOT DISPUTED THA T THE ASSESSEE IS ENGAGED IN THE BUSINESS OF JEWELLERY. DURING THE COURSE OF SURVEY EXCESS STOCK VALUING RS. 77,66,887/- WAS FOUND IN RESPECT OF GOLD AND SI LVER JEWELLERY. THE COORDINATE BENCH IN THE CASE OF CHOKSHI HIRALAL MAG ANLAL VS. DCIT, 131 TTJ (AHD.) 1 HAS HELD THAT IN A CASES WHERE SOURCE OF I NVESTMENT/EXPENDITURE IS CLEARLY IDENTIFIABLE AND ALLEGED UNDISCLOSED ASSET HAS NO INDEPENDENT ITA NO.157/JP/17 ACIT, CC-2 VS M/S SANJAY BAIRATHI GEMS LTD., JAIPUR 10 EXISTENCE OF ITS OWN OR THERE IS NO SEPARATE PHYSIC AL IDENTITY OF SUCH INVESTMENT/EXPENDITURE THEN FIRST WHAT IS TO BE TAX ED IS THE UNDISCLOSED BUSINESS RECEIPT INVESTED IN UNIDENTIFIABLE UNACCOU NTED ASSET AND ONLY ON FAILURE IT SHOULD BE CONSIDERED TO BE TAXED UNDER S ECTION 69 ON THE PREMISES THAT SUCH EXCESS INVESTMENT IS NOT RECORDED IN THE BOOKS OF ACCOUNT AND ITS NATURE AND SOURCE IS NOT IDENTIFIABLE. ONCE SUCH EX CESS INVESTMENT IS TAXED AS UNDECLARED BUSINESS RECEIPT THEN TAXING IT FURTHER AS DEEMED INCOME UNDER SECTION 69 WOULD NOT BE NECESSARY. THEREFORE, THE F IRST ATTEMPT OF THE ASSESSING AUTHORITY SHOULD BE TO FIND OUT LINK OF U NDECLARED INVESTMENT/EXPENDITURE WITH THE KNOWN HEAD, GIVE OP PORTUNITY TO THE ASSESSEE TO ESTABLISH NEXUS AND IF IT IS SATISFACTO RILY ESTABLISHED THEN FIRST SUCH INVESTMENT SHOULD BE CONSIDERED AS UNDECLARED RECEI PT UNDER THAT PARTICULAR HEAD. IT IS OBSERVED THAT THERE IS NO CONFLICT WITH THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF FAKIR MOHD. HAJI HASAN (SUPRA) WHERE INVESTMENT IN AN ASSET OR EXPENDITURE IS NOT IDENTI FIABLE AND NO NEXUS WAS ESTABLISHED THEN WITH ANY HEAD OF INCOME AND THUS W AS NOT AVAILABLE FOR SET OFF AGAINST ANY LOSS UNDER ANY OTHER HEAD. THEREFORE, THE HONBLE COORDINATE BENCH HELD THAT W HERE ASSET IN WHICH UNDECLARED INVESTMENT IS SOUGHT TO BE TAXED IS NOT CLEARLY IDENTIFIABLE OR DOES NOT HAVE INDEPENDENT IDENTITY BUT IS INTEGRAL AND I NSEPARABLE (MIXED) PART OF DECLARED ASSET, FALLING UNDER A PARTICULAR HEAD, TH EN THE DIFFERENCE SHOULD BE TREATED AS UNDECLARED BUSINESS INCOME EXPLAINING TH E INVESTMENT. IN THE PRESENT CASE THE EXCESS STOCK WAS PART OF THE STOCK . THE REVENUE HAS NOT POINTED OUT THAT THE EXCESS STOCK HAS ANY NEXUS WIT H ANY OTHER RECEIPTS. THEREFORE, WE DO NOT FIND ANY FAULT WITH THE DECISI ON OF THE LD. CIT (A) DIRECTING THE AO TO TREAT THE SURRENDERED AMOUNT AS EXCESS STOCK QUA THE EXCESS STOCK FOUND. ITA NO.157/JP/17 ACIT, CC-2 VS M/S SANJAY BAIRATHI GEMS LTD., JAIPUR 11 4.3 THE AO RELIED UPON THE DECISION OF HONBLE PUNJ AB AND HARYANA HIGH COURT IN CASE OF KIM PHARMA (P.) LIMITED VS. CIT 25 8 CTR 454. IN THIS CASE THE AMOUNT SURRENDERED IN COURSE OF SURVEY WAS NOT REFLECTED IN BOOKS OF ACCOUNTS AND NO SOURCE FROM WHERE IT WAS DERIVED WA S DECLARED BY THE ASSESSEE AND THEREFORE IT WAS HELD THAT THE SAME CA NT BE ASSESSED AS BUSINESS INCOME. IN THIS CASE THE DECISION OF HONB LE KARNATAKA HIGH COURT IN CASE OF CIT VS. S.K. SRIGIRI AND BROS 298 ITR 13 RE LIED BY THE ASSESSEE WAS DISTINGUISHED BY HOLDING THAT IN THIS CASE ASSESSEE RECEIVED ADDITIONAL INCOME FROM BUSINESS ONLY. IN THE PRESENT CASE ALSO THE EXCESS STOCK OFFERED I N SURVEY IS PART OF THE BUSINESS INCOME. THE EXCESS STOCK IS DETERMINED BY VALUING THE BUSINESS STOCK AT CURRENT PRICE INSTEAD OF THE PURCHASE PRIC E. NOTHING WAS BROUGHT TO SUGGEST THAT THIS WAS NOT A REGULAR ITEM OF THE STO CK DEALT BY THE ASSESSEE. HENCE THE CASE LAWS RELIED BY THE AO IS NOT APPLICA BLE. 4.4 THE AO FURTHER REFERRED TO THE PROVISIONS OF SE CTION 115BBE AND HELD THAT NO DEDUCTION OR SET OFF OF BUSINESS LOSS WILL BE ALLOWABLE. THE PROVISIONS OF SECTION 115BBE READS AS UNDER:- (1) WHERE THE TOTAL INCOME OF AN ASSESSEE INCLUDES ANY INCOME REFERRED TO IN SECTION 68, SECTION 69, SECTION 69A, SECTION 69B, S ECTION 69C OR SECTION 69D, THE INCOME-TAX PAYABLE SHALL BE THE AGGREGATE OF (A) THE AMOUNT OF INCOME-TAX CALCULATED ON INCOME R EFERRED TO IN SECTION 68, SECTION 69, SECTION 69A, SECTION 69B, SECTION 6 9C OR SECTION 69D, AT THE RATE OF THIRTY PER CENT; AND (B) THE AMOUNT OF INCOME-TAX WITH WHICH THE ASSESSE E WOULD HAVE BEEN CHARGEABLE HAD HIS TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME REFERRED TO IN CLAUSE (A). ITA NO.157/JP/17 ACIT, CC-2 VS M/S SANJAY BAIRATHI GEMS LTD., JAIPUR 12 (2) NOTWITHSTANDING ANYTHING CONTAINED IN THIS ACT, NO DEDUCTION IN RESPECT OF ANY EXPENDITURE OR ALLOWANCE SHALL BE ALLOWED TO TH E ASSESSEE UNDER ANY PROVISION OF THIS ACT IN COMPUTING HIS INCOME REFER RED TO IN CLAUSE (A) OF SUB- SECTION (1). FROM THE ABOVE PROVISIONS, IT CAN BE NOTED THAT NO DEDUCTION IN RESPECT OF ANY EXPENDITURE OR ALLOWANCE SHALL BE ALLOWED. IT NOWHE RE SAYS THAT SET OFF OF THE LOSS WITH ANY OTHER INCOME WILL NOT BE ALLOWED. 5.5 IT MAY BE NOTED THAT SUB-SECTION 2 TO SECTION 1 15BBE IS AMENDED W.E.F. 01.04.2017 TO INCLUDE THEREIN THE WORDS SET OFF OF LOSS . THE AMENDED SUB- SECTION 2 W.E.F AY 2017-18 IS AS UNDER: NOTWITHSTANDING ANYTHING CONTAINED IN THIS ACT, NO DEDUCTION IN RESPECT OF ANY EXPENDITURE OR ALLOWANCE OR SET OFF OF ANY LOSS SHALL BE ALLOWED TO THE ASSESSEE UNDER ANY PROVISION OF THIS ACT IN COMPUTI NG HIS INCOME REFERRED TO IN CLAUSE (A) OF SUB-SECTION (1). IN THE MEMORANDUM EXPLAINING THE PROVISIONS OF AMEN DMENT, THE AMENDMENT TO SECTION 115BBE IS EXPLAINED AND HAS BEEN STATED THAT THIS AMENDMENT WILL TAKE EFFECT FROM 1ST APRIL, 2017 AND WILL, ACCORDIN GLY, APPLY IN RELATION TO THE ASSESSMENT YEAR 2017-18 AND SUBSEQUENT YEARS. FROM THE ABOVE IT CAN BE NOTED THAT THIS AMENDMENT IS MADE APPLICABLE FOR AY 2017-18 AND SUBSEQUENT YEARS. IT IS A SETTLED PR OPOSITION OF LAW THAT ANY AMENDMENT WHICH INCREASES THE TAX BURDEN OF THE ASS ESSEE HAS TO BE CONSIDERED PROSPECTIVE AND NOT RETROSPECTIVE. IN TH E CASE OF CIT VS. VATIKA TOWNSHIP PVT. LTD. 367 ITR 466/ 109 DTR 33, THE SUP REME COURT AT PARA 32 & 33 HELD THAT LEGISLATIONS WHICH MODIFY ACCRUED RI GHTS OR WHICH IMPOSE ITA NO.157/JP/17 ACIT, CC-2 VS M/S SANJAY BAIRATHI GEMS LTD., JAIPUR 13 OBLIGATIONS OR IMPOSE NEW DUTIES OR ATTACH A NEW DI SABILITY HAVE TO BE TREATED AS PROSPECTIVE UNLESS THE LEGISLATIVE INTENT IS CLE ARLY TO GIVE THE ENACTMENT A RETROSPECTIVE EFFECT. IT FURTHER HELD IN PARA 39(C) THAT IF THE CONCERNED PROVISION OF THE TAXING STATUTE IS AMBIGUOUS AND VA GUE AND IS SUSCEPTIBLE TO TWO INTERPRETATIONS, THE INTERPRETATION WHICH FAVOU RS THE SUBJECTS, AS AGAINST THERE THE REVENUE, HAS TO BE PREFERRED. THEREFORE , THE AMENDMENT TO SECTION 115BBE W.E.F. 01.04.2017 IS NOT APPLICABLE TO THE YEAR UNDER CONSIDERATION AND THUS, THE LD. CIT(A) CORRECTLY DI RECTED THE AO TO ALLOW THE SET OFF OF THE BUSINESS LOSS FOR THE YEAR AGAINST T HE INCOME OFFERED ON ACCOUNT OF EXCESS BUSINESS STOCK FOUND IN SEARCH. 4.6 THE ABOVE ISSUE IS ALSO CONSIDERED BY THE HONB LE ITAT VISHAKAPATNAM BENCH IN CASE OF PILLALALA RAMAKRISHNA RAO & ANR. V S. ACIT& ANR. 2016 ITL 4940 WHERE AT PARA 11 OF ITS ORDER, IT HELD AS UNDER: 11. THE CIT, ASSUMED JURISDICTION TO REVISE THE AS SESSMENT ORDER ON THE GROUND THAT THERE IS A LACK OF ENQUIRY ON THE PART OF THE A.O., IN EXAMINING THE ISSUE OF CASH FOUND DURING THE COURSE OF SEARCH AT THE TIME OF COMPLETION OF ASSESSMENT U/S 143(3) OF THE ACT. THE CIT WAS OF THE OPINION THAT THE A.O. HAS APPLIED INCORRECT PROVISIONS OF THE ACT, TO DEA L WITH CASH FOUND DURING THE COURSE OF SEARCH, AS AGAINST SEPARATE PROVISIONS PR OVIDED BY WAY OF SECTION 115BBE OF THE ACT. THE CIT FURTHER, OBSERVED THAT A S PER THE PROVISIONS OF SECTION 115BBE OF THE ACT, WHERE THE TOTAL INCOME O F AN ASSESSEE INCLUDES ANY INCOME REFERRED TO IN SECTION 68 TO 69D OF THE ACT, THEN NOTWITHSTANDING ANYTHING CONTAINED IN THIS ACT, NO DEDUCTION IN RES PECT OF ANY EXPENDITURE OR ALLOWANCE (OR SET OFF OF ANY LOSS) SHALL BE ALLOWED TO THE ASSESSEE UNDER ANY PROVISION OF THIS ACT, IN COMPUTING HIS INCOME REFE RRED TO IN CLAUSE (A) OF SUB SECTION (1) OF SECTION 115 BBE OF THE ACT. THE CIT WAS OF THE OPINION THAT THE A.O. IGNORING THE PROVISIONS OF SECTION 115BBE OF T HE ACT, ACCEPTED INCOME ITA NO.157/JP/17 ACIT, CC-2 VS M/S SANJAY BAIRATHI GEMS LTD., JAIPUR 14 DECLARED BY THE ASSESSEE UNDER THE NORMAL PROVISION S OF INCOME FROM PROFESSION AND FURTHER ALLOWED SET OFF OF BROUGHT F ORWARD LOSS FROM EARLIER YEARS, WHICH RENDER THE ASSESSMENT ORDER ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. WE DO N OT SEE ANY MERITS IN THE FINDINGS OF THE CIT FOR THE REASON THAT THE ASSESSE E RIGHT FROM THE BEGINNING CLAIMS THAT CASH FOUND DURING THE COURSE OF SEARCH REPRESENTS HIS PROFESSIONAL INCOME EARNED IN THE INDIVIDUAL CAPACITY FOR THE FI NANCIAL YEAR 2012-13, ACCORDINGLY INCLUDED CASH FOUND DURING COURSE OF SE ARCH AS HIS PROFESSIONAL INCOME FOR THE ASSESSMENT YEAR 2013-14 AND FILED RE TURNS OF INCOME. WE FURTHER NOTICED THAT THE ASSESSEE HAS ADMITTED ENTI RE CASH SEIZED DURING THE COURSE OF SEARCH AS HIS PROFESSIONAL INCOME WITHOUT THERE BEING ANY DEDUCTIONS TOWARDS EXPENDITURE, BUT, CLAIMED SET OF F OF BROUGHT FORWARD BUSINESS LOSS OF EARLIER YEARS AGAINST SUCH ADDITIO NAL INCOME. THE ALLEGATION OF THE CIT IS THAT WHEN ANY INCOME IS ADMITTED CONSEQU ENT TO SEARCH PROCEEDINGS, NO DEDUCTIONS TOWARDS ANY EXPENDITURE OR ALLOWANCES OR SET OFF OF LOSS SHALL BE ALLOWED AGAINST SUCH INCOME. BUT, THE FACT IS THAT AS PER THE PROVISIONS OF SUB SECTION (2) OF SECTION 115BBE OF THE ACT, WHICH WAS AMENDED BY THE FINANCE ACT, 2016 W.E.F. 1.4.2017 WH ICH IS APPLICABLE FROM THE ASSESSMENT YEAR 2017-18 AND SUBSEQUENT YEARS, T HERE IS A BAR ON SET OFF OF LOSS FROM A.Y. 2017-18, HOWEVER, THERE IS NO BAR TO CLAIM SET OFF OF LOSS UP TO A.Y. 2016-17. THEREFORE, EVEN ASSUMING FOR A MOM ENT THAT THE A.O. HAS APPLIED INCORRECT PROVISIONS OF THE ACT, TO TAX CAS H FOUND DURING THE COURSE OF SEARCH, THE ASSESSEE CAN ALWAYS CLAIM SET OFF OF BR OUGHT FORWARD LOSS FROM EARLIER YEARS UP TO THE ASSESSMENT YEAR 2016-17, EV EN IF THE SAME HAS BEEN ADDED UNDER THE PROVISIONS OF SEC. 68 TO 69D OF THE ACT. THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSMENT ORDER PASSED BY THE A. O. IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE, AS THERE IS NO PREJUDICE IS CAUSED TO THE REVENUE. ITA NO.157/JP/17 ACIT, CC-2 VS M/S SANJAY BAIRATHI GEMS LTD., JAIPUR 15 5. THE LD. DR IS HEARD WHO HAS RELIED UPON THE ORD ER OF THE LOWER AUTHORITIES AND SUBMITTED THAT THE AO HAS RIGHTLY INVOKED THE P ROVISIONS OF SECTION 69B OF THE ACT. FURTHER, HE SUBMITTED THAT THE PROVISIONS OF SECTION 115BBE FORMS PART OF AND COMES UNDER CHAPTER-XII PROVIDING FOR D ETERMINATION OF RATE OF TAX IN CERTAIN SPECIAL CASES AND ACCORDINGLY, QUANT IFICATION OF THE AMOUNT OF TAX. THE PROVISION OF SECTION 115BBE DOES NOT RELAT E TO THE COMPUTATION OF TOTAL INCOME. IT WAS SUBMITTED THAT FOR QUANTIFICAT ION OF TAX, IN RESPECT OF INCOME REFERRED IN THE SAID PROVISIONS, THE AMENDME NT BY THE FINANCE ACT 2016 WOULD NOT AFFECT THE COMPUTATION OF TOTAL INCO ME. HENCE, THE BUSINESS LOSSES IN THE INSTANT CASE CANNOT BE ALLOWED SET OF F AGAINST THE AMOUNT BROUGHT TO TAX UNDER SECTION 69B IN TERMS OF INVEST MENT IN UNDISCLOSED STOCK OF STONES AND JEWELLERY. 5.1 FURTHER, IN SUPPORT OF HIS CONTENTIONS, HE RELI ED UPON THE FOLLOWING DECISIONS: DHANUSH GENERAL STORES VS CIT (2012) 20 TAXMAN.COM 853 (CHHATTISGARH) RAZAKBHAI R. ARABIANI VS ITO (2013) 40 TAXMAN.COM 2 45 (GUJARAT) VIPUL KUMAR KIRITLAL SHAH VS ITO (2013) 33 TAXMAN.C OM 370 (GUJARAT) KRISHNAMEGH YARN INDUSTRIES VS ACIT (2016) 68 TAXMA N.COM 103 (GUJARAT) CIT VS KUWER FIBERS (P) LTD (2017) 33 TAXMAN.COM 34 5 (DEL) 6. PER CONTRA, THE LD AR DRAWN OUR REFERENCE TO TH E DECISION OF THE COORDINATE BENCH IN CASE OF SATISH KUMAR GOYAL VS J CIT (2016) 70 TAXMANN.COM 382 (AGRA) WHEREIN IT WAS HELD THAT BUS INESS LOSSES OF THE ASSESSEE COULD BE SET OFF UNDER SECTION 71 AGAINST THE INCOME ASSESSABLE UNDER SECTION 68 UNDER THE HEAD INCOME FROM OTHER SOURCES TAKING INTO CONSIDERATION THE CONFLICTING DECISIONS OF VARIOUS HIGH COURTS ON THE SUBJECT AND ALSO THE AMENDMENT MADE BY THE FINANCE ACT 2012 TO SECTION 115BBE IS ITA NO.157/JP/17 ACIT, CC-2 VS M/S SANJAY BAIRATHI GEMS LTD., JAIPUR 16 PROSPECTIVE IN NATURE. HE ALSO DRAWN OUR REFERENCE TO THE DECISION OF HONBLE GUJARAT HIGH COURT IN CASE OF CIT VS SHILPA DYEING & PRINTING MILLS (P) LTD (2013) 219 TAXMANN 279 (GUJARAT) FOR THE PROPOSITIO N THAT SECTION 71 PERMITS ASSESSEE TO SET OFF LOSS OTHER THAN OF CAPI TAL GAINS AGAINST INCOME FROM OTHER HEAD. IT WAS FURTHER SUBMITTED THAT IN THE SAID DECISION, THE GUJARAT HIGH COURT HAS TAKEN INTO CONSIDERATION ITS EARLIER DECISIONS RENDERED IN CASE OF FAKIR MOHMED HAJIHASAN VS CIT (247 ITR 290), THE DECISION OF DCIT VS RADHE DEVELOPERS INDIA LTD (329 ITR 1) AND DECISION OF MADRAS HIGH COURT IN CASE OF CIT VS CHENSING VENTURES (291 ITR 258). IT WAS FURTHER SUBMITTED THAT THE HONBLE PUNJAB & HARYANA HIGH CO URT IN CASE OF KIM PHARMA (P) LTD (258 CTR 454) HAS IN FACT RELIED ON THE DECISION OF GUJARAT HIGH COURT IN CASE OF FAKIR MOHMED HAJIHASAN (SUPRA ) WHICH HAS SUBSEQUENTLY BEEN EXPLAINED IN SUBSEQUENT DECISION OF RADHE DEVELOPERS INDIA LTD (SUPRA). 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD, THE FACTUAL MATRIX AND VARIOUS DECISIONS RE LIED UPON BY BOTH THE PARTIES. THE ASSESSING OFFICER HAS BROUGHT TO TAX, UNDISCLOSED INVESTMENT IN EXCESS STOCK OF STONES, GOLD & JEWELLERY FOUND AND SURRENDERED DURING THE COURSE OF SEARCH PROCEEDINGS WHICH HAS NOT BEEN REC ORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE, UNDER THE PROVISIONS OF S ECTION 69B READ WITH SECTION 115BBE OF THE ACT. FURTHER, THE ASSESSING OFFICER HAS NOT ALLOWED THE SET OFF OF BUSINESS LOSS OF RS 86,96,733 AGAINST TH E SAID INCOME OF RS 2,31,41,217 WHICH HAS BEEN BROUGHT TO TAX UNDER SEC TION 69B READ WITH SECTION 115BBE OF THE ACT. THE ASSESSING OFFICER HA S HOWEVER ALLOWED THE CARRY FORWARD OF SAID BUSINESS LOSS TO BE SET OFF I N THE SUBSEQUENT ASSESSMENT YEARS. THE FACT THAT THE BUSINESS LOSS HAS BEEN IN CURRED DURING THE YEAR IS THUS NOT IN DISPUTE. THE LIMITED DISPUTE RELATES T O SET OFF OF SAID BUSINESS LOSS ITA NO.157/JP/17 ACIT, CC-2 VS M/S SANJAY BAIRATHI GEMS LTD., JAIPUR 17 AGAINST THE INCOME WHICH HAS BEEN BROUGHT TO TAX UN DER SECTION 69B READ WITH SECTION 115BBE OF THE ACT. 8. FIRSTLY, REGARDING THE CONTENTION OF THE LD CIT DR THAT THE PROVISIONS OF SECTION 115BBE COMES UNDER CHAPTER-XII PROVIDING FO R DETERMINATION OF RATE OF TAX IN CERTAIN SPECIAL CASES AND ACCORDINGLY, IT RELATES TO QUANTIFICATION OF THE AMOUNT OF TAX AND NOT TO THE COMPUTATION OF TOT AL INCOME AND THEREFORE, THE AMENDMENT BROUGHT IN BY THE FINANCE ACT 2016 WO ULD NOT AFFECT THE COMPUTATION OF TOTAL INCOME. IT WAS ACCORDINGLY CON TENDED THAT THE BUSINESS LOSSES IN THE INSTANT CASE CANNOT THEREFORE BE ALLO WED SET OFF AGAINST THE AMOUNT BROUGHT TO TAX UNDER SECTION 69B IN TERMS OF UNDISCLOSED INVESTMENT IN STOCK OF STONES, GOLD AND JEWELLERY. 9. IT IS NOTED THAT BY THE FINANCE ACT, 2016, AN AM ENDMENT HAS BEEN BROUGHT-IN IN SECTION 115BBE(2) WHEREIN IT HAS BEEN PROVIDED THAT NOTWITHSTANDING ANYTHING CONTAINED IN THIS ACT, NO SET OFF OF ANY LOSS SHALL BE ALLOWED TO THE ASSESSEE UNDER ANY PROVISION OF THIS ACT IN COMPUTING HIS INCOME AS REFERRED TO CLAUSE (A) OF SUBSECTION (1) OF THE ACT. IF WE WERE TO ACCEPT THE CONTENTIONS OF THE LD CIT(DR), THE QUEST ION THAT ARISES IS WOULD THAT INTERPRETATION RENDER SUB-SECTION (2) OTIOSE AND WHAT WAS THE NECESSITY FOR BRINGING IN THE SUBJECT AMENDMENT. THE INTENT OF THE LEGISLATURE HAS BEEN PROVIDED IN THE MEMORANDUM EXPLAINING THE SAID AMEN DMENT WHICH READS AS UNDER: CURRENTLY, THERE IS UNCERTAINTY ON THE ISSUE OF SE T-OFF OF LOSSES AGAINST INCOME REFERRED IN SECTION 115BBE OF THE ACT. THE MATTER H AS BEEN CARRIED TO JUDICIAL FORUMS AND COURTS IN SOME CASES HAS TAKEN A VIEW TH AT LOSSES SHALL NOT BE ALLOWED TO BE SET-OFF AGAINST INCOME REFERRED TO IN SECTION 115BBE. HOWEVER, THE CURRENT LANGUAGE OF SECTION 115BBE OF THE ACT D OES NOT CONVEY THE ITA NO.157/JP/17 ACIT, CC-2 VS M/S SANJAY BAIRATHI GEMS LTD., JAIPUR 18 DESIRED INTENTION AND AS A RESULT THE MATTER IS LIT IGATED. IN ORDER TO AVOID UNNECESSARY LITIGATION, IT IS PROPOSED TO AMEND THE PROVISIONS OF THE SUB- SECTION (2) OF SECTION 115BBE TO EXPRESSLY PROVIDE THAT NO SET OFF OF ANY LOSS SHALL BE ALLOWABLE IN RESPECT OF INCOME UNDER THE S ECTIONS 68 OR SECTION 69 OR SECTION 69A OR SECTION 69B OR SECTION 69C OR SECTIO N 69D. 10. IN LIGHT OF ABOVE, GIVEN THE FACT THAT THE AO H AS INVOKED THE PROVISIONS OF SECTION 11BBE IN THE INSTANT CASE, THE PROVISIONS O F SUB-SECTION (2) TO SECTION 11BBE ARE EQUALLY APPLICABLE. THE AMENDMENT BROUGH T IN BY THE FINANCE ACT, 2016 WHEREBY SET OFF OF LOSSES AGAINST INCOME REFER RED TO IN SECTION 69B HAS BEEN DENIED IS STATED CLEARLY TO BE EFFECTIVE FROM 1 APRIL 2017 AND WILL ACCORDINGLY, APPLY TO ASSESSMENT YEAR 2017-18 ONWAR DS. ACCORDINGLY, FOR THE YEAR UNDER CONSIDERATION, THERE IS NO RESTRICTION T O SET OFF OF BUSINESS LOSSES AGAINST INCOME BROUGHT TO TAX UNDER SECTION 69B OF THE ACT. 11. FURTHER, THE MATTER COULD BE LOOKED AT FROM ANO THER PERSPECTIVE. THE PROVISIONS RELATING TO SET OFF OF LOSSES ARE CONTAI NED IN CHAPTER-VI RELATING TO AGGREGATION OF INCOME AND SET OFF OF LOSSES. WHENE VER LEGISLATURE DESIRES TO RESTRICT SET-OFF OF LOSS OR ALLOWANCE OF LOSS, IN A PARTICULAR MANNER, USUALLY, THE PROVISIONS ARE MADE IN CHAPTER-VI SUCH AS NON-ALLOW ANCE OF BUSINESS LOSS AGAINST SALARY INCOME AS PROVIDED IN SECTION 71(2A) , AND TREATMENT OF SHORT- TERM OR LONG-TERM CAPITAL LOSSES. THERE IS NO SPEC IFIC PROVISION WHICH RESTRICT SET OFF OF BUSINESS LOSSES AGAINST INCOME BROUGHT T O TAX UNDER SECTION 69B. INTERESTINGLY, BOTH SECTION 69B AND SECTION 71 FALL S UNDER THE SAME CHAPTER VI. IN THE ABSENCE OF ANY PROVISIONS IN SECTION 71 FALLING UNDER CHAPTER-VI WHICH RESTRICT SUCH SET OFF, IN THE INSTANT CASE, S ET OFF OF BUSINESS LOSSES AGAINST INCOME BROUGHT TO TAX UNDER SECTION 69B CAN NOT BE DENIED. ITA NO.157/JP/17 ACIT, CC-2 VS M/S SANJAY BAIRATHI GEMS LTD., JAIPUR 19 12. NOW, WE REFER TO VARIOUS JUDICIAL PRONOUNCEMENT S QUOTED BY BOTH THE PARTIES. WE FIND THAT THE DECISION OF HONBLE GUJAR AT HIGH IN CASE OF FAKIR MOHMED HAJIHASAN (SUPRA) AND SUBSEQUENT DECISION OF THE HONBLE MADRAS HIGH COURT IN CASE OF CHENSING VENTURES (SUPRA) ARE TWO EARLIEST DECISIONS ON THE SUBJECT WHERE THE HONBLE COURTS HAVE TAKEN A D IVERGENT VIEW IN THE MATTER. AS PER THE DECISION OF HONBLE GUJARAT HIG H COURT, THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT WOULD BE CONSIDER ED AS TOTAL INCOME OF THE PREVIOUS YEAR WITHOUT ALLOWING SET-OFF OF BUSIN ESS LOSS. AS PER MADRAS HIGH COURTS DECISION, THE ADDITION WOULD BE SET-OF F AGAINST THE BUSINESS LOSS AND THE BALANCE ADDITION, IF ANY, WOULD FORM PART O F THE TOTAL INCOME AND ATTRACT TAX. 13. IT IS NOTICED THAT THE HONBLE GUJARAT HIGH COURT IN CASE OF CIT VS SHILPA DYEING & PRINTING MILLS (P) LTD (SUPRA) HAD AN OCCASION TO CONSIDER AN IDENTICAL ISSUE WHERE THE SAID DIVERGEN T VIEW HAS BEEN RECONCILED. IN THAT DECISION, THE HONBLE HIGH COURT HAS CONSID ERED ITS EARLIER DECISION RENDERED IN CASE OF FAKIR MOHMED HAJIHASAN (SUPRA) AS EXPLAINED IN ANOTHER DECISION IN CASE OF RADHE DEVELOPERS INDIA LTD (SUP RA) AND ALSO THE DECISION OF MADRAS HIGH COURT IN CASE OF CHENSING VENTURES ( SUPRA). IT WOULD THEREFORE TO RELEVANT TO REFER TO THE FACTS AND THE LEGAL PROPOSITION LAID DOWN BY THE HONBLE GUJARAT HIGH COURT DECISION IN CASE OF SHILPA DYEING & PRINTING MILLS (P) LTD. FACTS OF THE CASE BRIEF FACTS ARE THAT, THE RESPONDENT-ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF DYING AND PRINTING. DURING THE COURSE O F SCRUTINY FOR THE ASSESSMENT YEAR 2008-09, THE ASSESSING OFFICER NOTI CED THAT IN A SURVEY ACTION CONDUCTED AT THE BUSINESS PREMISES OF THE AS SESSEE, IT HAD DECLARED A SUM OF RS. 100.98 LACS (ROUNDED OFF) ON ACCOUNT OF EXCESS STOCK. IN THE ITA NO.157/JP/17 ACIT, CC-2 VS M/S SANJAY BAIRATHI GEMS LTD., JAIPUR 20 RETURN, THE ASSESSEE HAD SUGGESTED CURRENT YEAR'S L OSS AGAINST SUCH INCOME. ASSESSING OFFICER HOLDING A BELIEF THAT INCOME FROM UNLISTED SOURCE WOULD NOT FALL UNDER ANY OF THE HEADS OF THE INCOME, THE SAME HAS TO BE TAXED SEPARATELY, THE CURRENT LOSSES CANNOT BE SET OFF AG AINST SUCH INCOME. FINDINGS AND LEGAL PROPOSITION 8. WE, HOWEVER, FIND THAT SECTION 71 OF THE ACT PERMI TS AN ASSESSEE TO SET OFF LOSS OTHER THAN THAT OF CAPITAL GAINS AGAINST I NCOME FROM OTHER HEAD. THIS VERY ISSUE CAME-UP FOR CONSIDERATION BEFORE THE MAD RAS HIGH COURT IN CASE OF CHENSING VENTURES (SUPRA). THE DIVISION BENCH OF TH E COURT CONSIDERED THE ISSUE IN FOLLOWING MANNER: '6. HEARD COUNSEL. THE ASSESSING OFFICER HAS NOT GI VEN ANY REASON WHATSOEVER TO DENY THE SET OFF OF THE BUSINESS LOSS AGAINST TH E INCOME DECLARED UNDER THE HEAD & 'OTHER SOURCES'. SECTION 71 DEALS WITH SET O FF OF LOSS AGAINST INCOME UNDER ANY OTHER HEAD. AFTER SETTING OFF LOSSES AGAI NST THE INCOME UNDER THE SAME HEAD, IF THE NET RESULT IS STILL A LOSS, THE A SSESSEE CAN SET OFF THE SAID LOSS UNDER SECTION 71 OF THE ACT AGAINST INCOME OF THE SAME YEAR UNDER ANY OTHER HEAD, EXCEPT FOR LOSSES WHICH ARISE UNDER THE HEAD 'CAPITAL GAINS'. THE INCOME TAX IS ONLY ONE TAX AND LEVIED ON THE SUM TO TAL OF THE INCOME CLASSIFIED AND CHARGEABLE UNDER THE VARIOUS HEADS. SECTION 14 HAS CLASSIFIED THE DIFFERENT HEADS OF INCOME AND INCOME UNDER EACH HEA D IS SEPARATELY COMPUTED. INCOME WHICH IS COMPUTED IN ACCORDANCE WI TH LAW IS ONE INCOME AND IT IS NOT A COLLECTION OF DISTINCT TAX LEVIED S EPARATELY ON EACH HEAD OF INCOME AND IT IS NOT AN AGGREGATE OF VARIOUS TAXES COMPUTED WITH REFERENCE TO EACH OF THE DIFFERENT SOURCES SEPARATELY. THERE IS ONLY ONE ASSESSMENT AND THE SAME IS MADE AFTER THE TOTAL INCOME HAS BEEN AS CERTAINED. THE ASSESSEE IS SUBJECT TO INCOME-TAX ON HIS TOTAL INCOME THOUGH HIS INCOME UNDER EACH HEAD MAY BE WELL BELOW THE TAXABLE LIMIT. HENCE THE LOSS SUSTAINED IN ANY ITA NO.157/JP/17 ACIT, CC-2 VS M/S SANJAY BAIRATHI GEMS LTD., JAIPUR 21 YEAR UNDER ANY HEADS OF INCOME WILL HAVE TO BE SET OFF AGAINST INCOME UNDER ANY OTHER HEAD. IN THIS CASE, THE ASSESSING OFFICER MADE ADDITION OF RS.28,50,000/- AS UNDISCLOSED INCOME UNDER SECTION 69 OF THE ACT. ONCE THE LOSS IS DETERMINED, THE SAME SHOULD BE SET OFF AGAI NST THE INCOME DETERMINED UNDER ANY OTHER HEAD OF INCOME. IN THE ASSESSMENT, NO REASONS WERE GIVEN BY THE ASSESSING OFFICER TO DENY THE BENEFIT OF SEC TION 71 OF THE ACT. THE BENEFIT PROVIDED UNDER SECTION 71 OF THE ACT CANNOT BE DENIED AND THE LEARNED STANDING COUNSEL APPEARING FOR THE REVENUE IS ALSO UNABLE TO EXPLAIN OR GIVE REASONS WHY THE ASSESSEE IS NOT ENTITLED TO THE BENEFIT OF SECTION 71 OF THE ACT. THE REASONS GIVEN BY THE TRIBUNAL ARE BASE D ON VALID MATERIALS AND EVIDENCE AND THE SAME IS IN ACCORDANCE WITH THE PRO VISIONS OF SECTION 71OF THE ACT. WE FIND NO ERROR OR LEGAL INFIRMITY IN THE IMPUGNED ORDER.' 9. WE MAY FURTHER NOTICE THAT THE DECISION IN CASE OF FAKIR MOHMED HAJI HASAN (SUPRA) CAME-UP FOR CONSIDERATION IN CASE OF RADHE DEVELOPERS INCIA LTD. (SUPRA),IT WAS OBSERVED AS UNDER: 'THE DECISIONS OF THIS COURT IN THE CASE OF FAKIR M OHMED HAJI HASAN (SUPRA) AND KRISHNA TEXTILES (SUPRA) ARE NEITHER RELEVANT N OR GERMANE TO THE ISSUE CONSIDERING THE FACT THAT IN NONE OF THE DECISIONS THE LEGISLATIVE SCHEME EMANATING FROM CONJOINT READING OF PROVISIONS OF SE CTIONS 14 & 56 OF THE ACT HAVE BEEN CONSIDERED. THE APEX COURT IN THE CASE OF D.P. SANDU BROS.CHEMBUR P. LTD.,(SUPRA) HAS DEALT WITH THIS VE RY ISSUE WHILE DECIDING THE TREATMENT TO BE GIVEN TO A TRANSACTION OF SURRENDER OF TENANCY RIGHT. THE EARLIER DECISIONS OF THE APEX COURT COMMENCING FROM CASE OF UNITED COMMERCIAL BANK LTD. V. CIT [1957] 32 ITR 688 (SC) HAVE BEEN CONSIDERED BY THE APEX COURT AND, HENCE, IT IS NOT NECESSARY TO R EPEAT THE SAME. SUFFICE IT TO STATE THAT THE ACT DOES NOT ENVISAGE TAXING ANY INCOME UNDER ANY HEAD NOT SPECIFIED IN SECTION 14 OF THE ACT. IN THE CIRCUMST ANCES, THERE IS NO QUESTION ITA NO.157/JP/17 ACIT, CC-2 VS M/S SANJAY BAIRATHI GEMS LTD., JAIPUR 22 OF TRYING TO READ ANY CONFLICT IN THE TWO JUDGMENTS OF THIS COURT AS SUBMITTED BY THE LEARNED COUNSEL FOR THE REVENUE.' 10. IN OUR OPINION, THE STATUTORY PROVISIONS CONTAINED IN SECTION 71 WAS APPLICABLE IN THE PRESENT CASE. BY APPLYING THE DEC ISION IN CASE OF FAKIR MOHMED HAJI HASAN (SUPRA) AS EXPLAINED IN CASE OF R ADHE DEVELOPERS INCIA LTD. (SUPRA), THE SAME CANNOT BE DECLINED. IN THE R ESULT, NO QUESTION OF LAW ARISES. TAX APPEAL IS, THEREFORE, DISMISSED. 14. IT IS ALSO NOTED THAT IN LATEST DECISION OF HONBLE GUJARAT HIGH COURT IN CASE OF KRISHNAMEGH YARN INDUSTRIES (SUPRA) WHICH HAS BEEN BROUGHT TO OUR ATTENTION BY THE LD CIT DR TO SUPPORT HIS CONTE NTIONS REGARDING APPLICABILITY OF SECTION 69B, THE EARLIER DECISION IN CASE OF SHILPA DYEING AND PRINTING MILLS HAS BEEN FOLLOWED FOR SETTING OFF OF LOSSES UNDER SECTION 71 AGAINST SUCH INCOME. THE RELEVANT FINDINGS OF HON BLE HIGH COURT ARE AS UNDER: 8. WE HAVE LEARNED ADVOCATES FOR THE RESPECTIVE PARTIE S. PERUSED THE ORDERS OF THE CIT (APPEALS) AS WELL AS THE ITAT. IT IS AN UNDISPUTED FACT THAT DURING SCRUTINY, THE ASSESSEE HIMSELF HAS DISCLOSED THE FA CT THAT IN HIS BOOKS OF ACCOUNT, HE HAD SHOWN LESS STOCK TO THE TUNE OF RS. 10,06,987/-. IT IS ALSO AN ADMITTED FACT THAT WHEN THE PHYSICAL STOCK WAS EXAM INED BY THE AUTHORITY, THE VALUE OF THE SAID STOCK WAS RS. 13,33,485/-, HOWEVE R, AS PER THE BOOKS OF ACCOUNT, THE VALUE OF STOCK WAS TO THE TUNE OF RS.3 ,26,498/- I.E. AMOUNT TO THE TUNE OF RS.10,06,987/- WAS NOT RECORDED IN THE BOOKS OF ACCOUNT. HOWEVER, IT IS ADMITTED BY THE ASSESSEE HIMSELF THA T HE HAS NOT COMPLETELY DISCLOSED THE STOCK IN THE BOOKS OF ACCOUNT. NOW, C ONSIDERING THE PROVISO OF SECTION 69(B) OF THE ACT, WE ARE OF THE OPINION THA T THE ASSESSEE HAD NOT FULLY DISCLOSED THE STOCKS IN THE BOOKS OF ACCOUNT AND TH EREFORE, THE ASSESSING ITA NO.157/JP/17 ACIT, CC-2 VS M/S SANJAY BAIRATHI GEMS LTD., JAIPUR 23 OFFICER AS WELL AS THE CIT (APPEALS) HAVE RIGHTLY O BSERVED THAT THE CASE OF THE ASSESSEE WOULD FALL UNDER THE PROVISO OF SECTION 69 (B) OF THE ACT. WE ARE ALSO OF THE OPINION THAT THE SUBMISSIONS MAD E BY THE LEARNED ADVOCATE IS THAT THE CASE WOULD FALL UNDER THE PROV ISO OF SECTION 69(C) OF THE ACT DOES NOT APPLY TO THE FACTS OF THE PRESENT CASE . IT IS NOT THE CASE OF THE REVENUE THAT THERE IS AN UNEXPLAINED EXPENDITURE, W HICH WOULD COVER UNDER THE PROVISO OF THIS ACT AND THEREFORE, THE ASSESSEE WOULD NOT BE ENTITLED FOR THE SET OFF UNDER THE PROVISO OF SECTION 71 OF THE ACT. AS FAR AS APPLICABILITY OF THE CASE OF SHILPA DYEING & PRINTING MILLS (P.) LTD . (SUPRA) IS CONCERNED, THE SAME WOULD BE APPLICABLE SINCE THE COURT HAD HELD T HAT THE AMOUNT OF EXCESS STOCK WOULD FALL UNDER THE DEFINITION OF INCOME AS PER SECTION 14 OF THE ACT AND THEREFORE, THE ASSESSEE WOULD BE ENTITLED FOR T HE SET OFF UNDER PROVISO OF SECTION 71 OF THE ACT. AS FAR AS THE CASE OF ATTAR SINGH GURMUKH SINGH (SUPRA) IS CONCERNED, THE SAME WOULD NOT BE APPLICABLE IN T HE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE SINCE IT IS NOT THE CASE THAT THERE WAS UNEXPLAINED EXPENDITURE MADE BY THE ASSESSEE. 9. THEREFORE, WE ARE OF THE OPINION THAT THE CIT (APPE ALS) AS WELL AS THE ITAT HAVE COMMITTED ERROR IN REFUSING GIVING SET OFF TO THE ASSESSEE UNDER SECTION 71 OF THE ACT AND ACCORDINGLY, WE ALLOW THESE APPEA LS BY SETTING ASIDE THE ORDER DATED 28.02.2005 PASSED BY THE INCOME TAX APP ELLATE TRIBUNAL (THE ITAT) AND ORDER DATED 07.07.2014 PASSED BY THE COMM ISSIONER OF INCOME TAX (APPEALS) AHMEDABAD [THE CIT (APPEALS)]. 15. IN LIGHT OF ABOVE, WE ARE OF THE VIEW THAT THE ASSESSEE DESERVE TO SUCCEED IN THE SUBJECT APPEAL AND WILL BE ELIGIBLE FOR SET OFF BUSINESS LOSS OF RS 86,96,733 AGAINST THE INCOME OF RS 2,31,41,217 WHIC H HAS BEEN BROUGHT TO TAX UNDER SECTION 69B READ WITH SECTION 115BBE OF T HE ACT. IN THE RESULT, GROUNDS TAKEN BY REVENUE ARE DISMISSED. ITA NO.157/JP/17 ACIT, CC-2 VS M/S SANJAY BAIRATHI GEMS LTD., JAIPUR 24 IN THE RESULT, IN THE APPEAL OF REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/08/2017. SD/- SD/- DQY HKKJR FOE FLAG ;KNO (KUL BHARAT) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER SANTOSH* JAIPUR DATED:- 08/08/2017 VKNS'K DH IZFRFYFI VXZSF'KR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ACIT, CENTRAL CIRCLE-2, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- M/S SANJAY BAIRATHI GEMS LTD., 4/193 , JAWAHAR NAGAR, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT , 6. XKMZ QKBZY@ GUARD FILE (ITA NO.157/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR.