M/s. Arihant Jewels, Ahmedabad V. The ITO, Ward-5(3)(3), Ahmedabad

ITA 2341/AHD/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 1588 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Appeal Filed On: 03-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L. P. JAIN
• Keywords: Business income; Income from undisclosed sources; Principle of natural justice; Deemed to accrue or arise in india
• Section: 68; 69; 28; 69C; 139; 143(3); 133A; 69B; 69A; 44AB; 43; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (VIRTUAL COURT) BEFORE: SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEM BER M/S. ARIHANT JEWELS, 111, 1 ST FLOOR, SARDAR PATEL DIAMOND MARKET, NR. SAMJUBA HOSPITAL, BAPUNAGAR, AHMEDABAD PAN: AAUFA1649M (APPELLANT) VS THE ITO, WARD-5(3)(3), AHMEDABAD (RESPONDENT) REVENUE BY: SHRI L.P. JAIN, SR. D.R. ASSESSEE BY: SHRI S.N. DIVATIA, A.R . DATE OF HEARING : 08-12-2020 DATE OF PRONOUNCEMENT : 15-02-202 1 /ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- THIS ASSESSEES APPEAL FOR A.Y. 2015-16, ARISES FRO M ORDER OF THE CIT(A), AHMEDABAD-5 DATED 07-09-2018, IN PROCEEDIN GS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE A CT. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL:- ITA NO. 2341/AHD/2018 ASSESSMENT YEAR 2015-16 I.T.A NO. 2341/AHD/2018 A.Y. 2015-16 PAGE NO M/S. ARIHANT JEWELS VS. ITO 2 1.1 THE ORDER PASSED U/S.250 ON 07.09.2018 FOR A.Y.2015 -16 BY CIT(A)-5, ABAD UPHOLDING THE ADDITION OF RS.50 LAKH AS HEADLESS DEEMED INCOME IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 1.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE SUBMISSIONS MADE AND EVIDENCE PRODUCED BY THE APPELLANT WITH REGARD TO THE IMPUGNED ADDITION. 2.1 THE LD. CITCA) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING ADDITION OF RS. 50 LAKH AS HEADLESS DEEMED INCOME, THOUGH THE APPELLAN T HAD DISCLOSED THE SAME AS UNDISCLOSED STOCK AS EVIDENT FROM PROFIT & LOSS ACCOUNT, STOCK RECORD ETC. 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT(A) OUGHT NOT TO HAVE UPHELD THE ADDITION OF RS. 50 LAKH AS HEADL ESS DEEMED INCOME, THOUGH THE APPELLANT HAD DISCLOSED THE SAME AS UNDISCLOSED STOCK AS EVIDENT FROM PROFIT & LOSS ACCOUNT, STOCK RECORD ETC. 3.1 THE LD.CIT(A) HAS ERRED IN UPHOLDING THAT THE INCOME DECLARED OF RS. 50 LAKHS WAS NOT BUSINESS INCOME BUT HEADLESS INCOME. THE OBSERVATIO NS MADE BY CIT(A) IN THIS REGARD ARE NOT ADMITTED AND CONTRARY TO THE FACTS OF THE CASE AS W ELL AS LAW. IT IS, THEREFORE, PRAYED [HAT THE ADDITION OF RS. 5 0 LAKH UPHELD BY THE CIT(A) MAY KINDLY BE DELETED. 3. ALL THE GROUNDS OF APPEAL OF THE ASSESSEE ARE IN TER-CONNECTED TO THE ISSUE OF CONFIRMING THE ADDITION OF RS. 50 LACS AS HEAD LESS DEEMED INCOME, THEREFORE, FOR THE SAKE OF CONVENIENCE, ALL THESE G ROUNDS OF APPEAL ARE ADJUDICATED TOGETHER AS FOLLOWS:- 4. THE FACT IN BRIEF IS THAT RETURN OF INCOME DECLA RING INCOME OF RS. 29,530/- WAS FILED ON 14 TH JAN, 2018. THE ASSESSEE IS ENGAGED IN THE BUSINES S OF WHOLESALE TRADING OF GOLD AND DIAMOND JEWELLERY AS A PARTNERSHIP FIRM. THE SURVEY WAS CONDUCED AT ASSESSEE PREMISES ON 18 TH DECEMBER, 2014. DURING THE COURSE OF SURVEY, PHYSICAL STOCK WAS TAK EN AND FOLLOWING DISCREPANCIES WERE NOTICED AS PER PHYSICAL STOCK FO UND DURING THE COURSE OF SURVEY AND AS PER BOOKS. STOCK AS PER BOOKS RS. PHYSICAL STOCKS FOUND DURIN G SURVEY RS. DIFFERENCE RS. CASH 3,64,306/- 39,950/- 3,24,354 STOCK 1,78,92,962/- 18,26,797/- 1,60,66,165/- TOTAL 1,75,28,656/- 17,86,847/- 1,57,41,811/- I.T.A NO. 2341/AHD/2018 A.Y. 2015-16 PAGE NO M/S. ARIHANT JEWELS VS. ITO 3 DURING THE COURSE OF SURVEY, ASSESSEE HAS ALSO DISC LOSED INCOME OF RS. 50 LACS. DURING THE COURSE OF ASSESSMENT ON VERIFICAT ION OF THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION, THE ASSESSING OFF ICER OBSERVED THAT ASSESSEE HAS NOT SHOWN THE INCOME DECLARED DURING T HE COURSE OF SURVEY ACTION. THEREFORE, SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE TO EXPLAIN WHY THE UNDISCLOSED INCOME OF RS. 50 LACS NOT BE AD DED TO THE TOTAL INCOME. THE ASSESSEE EXPLAINED THAT THE SURVEY ACTION WAS C ONDUCTED ON 18 TH DECEMBER, 2014 WHICH WAS NOT THE LAST DAY OF FINANC IAL YEAR AND ENTRY FOR STOCK LAYING WITH MARKETING TEAM WAS NOT MADE IN TH E BOOKS. THE REPLY OF THE ASSESSEE DISCUSSED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER IS REPRODUCED AS UNDER:- 2. REGARDING DISCREPANCY IN STOCK POSITION, IT IS SUBMITTED THAT THE PARTNER OF THE ASSESSEE FIRM HAD TOLD THE SURVEY TEAM THAT THE STOCK WORTH ABOUT RS. 1,60,00,000/- WAS WITH THE MARKETING TEAM OF THE ASSESSEE WHO WERE ON TOUR FOR SELLING OUT-SIDE AHMEDABAD. WHEN THEY COME BACK FROM TOUR THEY SUBMIT THE STATUS OF THE TRANSACTIONS THAT HAVE TAKEN PLACE AND ACCORDINGLY ENTRIES FOR SALES ARE PASSED IN THE BOOKS OF ACCOUNTS . SIR, THE ASSESSES FIRM HAS GOT THEIR BOOKS OF ACCOU NTS AUDITED U/S 44AB OF I.T. ACT AFTER SURVEY & AFTER FINALISATION OF BOOKS OF ACCOUNTS FOR A.Y. 20 15-16 AND NO ADVERSE REPORTING HAS BEEN MADE BY THE AUDITORS IN THEIR REPORT ON PURCHASE, SALES OR STOCK. NOW REGARDING UNDISCLOSED INCOME OF RS.50,00,000/ - ADMITTED BY THE PARTNER AND THE ASSESSEE FIRM, IT IS SUBMITTED FIRM HAS SHOWN RS. 50,00,00 0/- IN THEIR PROFIT & LOSS ACCOUNT AS ' OTHER INCOME(INCOME TAX DECLARATION) UNDER THE HEAD INCOM ES. THE PARTNER OF THE FIRM HAD ADMITTED AND DECLARED RS. 50,00,000/- AS TAXABLE INCOME BUT DUE TO BANK INTEREST/CHARGES OF RS.74,63,173/- , THE FIRM COULD NOT SHOW RS.50,00,000/- AS TAXABLE INCOME FOR A.Y.2015-16. THE FIRM HAD G.P. OF 1.28 % DURING A.Y. 2015-10 AGAINST ACCEPTED G.P. OF 1.78% DURING AY 2014-15. IN VIEW OF ABOVE, IT IS RESPECTFULLY SUBMITTED THAT THERE WERE NO EXCESS CASH OR STOCK WERE FOUND BY SURVEY TEAM PHYSICALLY THAN BOOKS RECORDS AND THERE FORE IN OUR OPINION QUESTION OF MAKING ADDITION TO TOTAL INCOME OF THE FIRM DOES NOT ARISE AS NOT JUSTIFIABLE. THE DISCREPANCIES OF LOWER AMOUNT OF CASH AND STOCK AT THE TIME OF SURVEY CANN OT BE CONSIDERED AS UNACCOUNTED INCOME AND CANNOT BE ADDED TO THE INCOME OF THE FIRM. ALSO RS. 50,00,000/- UNDISCLOSED INCOME ADMITTED BY THE PARTNER OF THE FIRM HAS BEEN DISCLOSED IN PROFI T & LOSS ACCOUNT AND HENCE AGAIN IT CANNOT BE ADDED TO THE INCOME OF THE FIRM.' HOWEVER, THE ASSESSING OFFICER HAS NOT AGREED WITH THE SUBMISSION OF THE ASSESSEE STATING THAT DURING THE COURSE OF SURVEY U /S. 133A, THE ASSESSEE HAD ADMITTED INCOME OF RS. 50 LACS, HENCE THE SAME WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. I.T.A NO. 2341/AHD/2018 A.Y. 2015-16 PAGE NO M/S. ARIHANT JEWELS VS. ITO 4 5. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE L D. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE HOL DING THAT ASSESSEE HAS FAILED TO FURNISH DOCUMENTARY EVIDENCES TO PROVE TH AT THE STOCK WORTH RS. 1.60 CRORES WAS WITH THE MARKETING TEAM OF THE ASSE SSEE FOR SELLING OUTSIDE AHMEDABAD. THE LD. CIT(A) HELD THAT THE VALUE OF E XCESS STOCK FOUND DURING SURVEY WAS NOT TO BE ASSESSED AS BUSINESS INCOME U/S. 28 OF THE ACT. THE LD. CIT(A) HAS FURTHER STATED THAT WHEN THE ASS ESSEE OFFERED NO EXPLANATION OR THE EXPLANATION OFFERED BY HIM IS NO T FOUND SATISFACTORY BY THE ASSESSING OFFICER THEN THE VALUE OF SUCH INVEST MENT UNDER SECTION 69, ASSET, (SECTION 69A), VALUE OF EXCESS INVESTMENT O R ASSET SECTION (69B) OR EXPENDITURE (SECTION 69C) MAY BE DEEMED TO BE INCOM E OF THE ASSESSEE FOR THE RELEVANT FINANCIAL YEAR AND ANY DEDUCTION RELEV ANT TO BUSINESS INCOME IS NOT AVAILABLE ON SUCH DEEMED INCOME. 6. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFO RE US, THE LD. COUNSEL SUBMITTED PAPER BOOK COMPRISING DETAIL AND SUBMISSI ON MADE BEFORE THE LOWER AUTHORITIES DURING THE COURSE OF ASSESSMENT A ND APPELLATE PROCEEDINGS. THE LD. COUNSEL SUBMITTED THAT LD. CIT(A) HAS INCOR RECTLY SUSTAINED THE ADDITION AFTER PLACING RELIANCE ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF FAKIR MOHAMMAD HAZI HASAN (204 7 ITR 290) AS IN THE CASE OF THE ASSESSEE DECLARATION WAS MADE ON ACCOUN T OF DISCREPANCIES IN STOCK WHICH WAS INCORRECTLY TAKEN AS DEEMED INCOME . THE LD. COUNSEL HAS REFERRED PAGE NO. 43 OF THE PAPER BOOK EXPLAINING T HAT INCOME DISCLOSED DURING SURVEY OF RS. 50 LACS WAS DULY SHOWN IN THE PROFIT AND LOSS ACCOUNT FOR THE PERIOD ENDING ON 31 ST MARCH, 2015 UNDER THE HEAD OTHER INCOME (INCOME TAX DECLARATION). THE LD. COUNSEL HAS ALSO SUBMITTED THAT DURING THE I.T.A NO. 2341/AHD/2018 A.Y. 2015-16 PAGE NO M/S. ARIHANT JEWELS VS. ITO 5 YEAR PROFIT TO BE TAXED ARRIVED AT RS. 29,530/- BEC AUSE OF FINANCIAL CHARGES TO THE AMOUNT OF RS. 74,63,173/- DEBITED TO THE P & L A/C AND BREAK UP GIVEN IN SCHEDULE 7 OF THE P & L A/C. IN THIS REGARD, T HE LD. COUNSEL HAS REFERRED PAGE NO. 46 OF THE PAPER BOOK SHOWING THAT DURING T HE YEAR ASSESSEE HAS INCURRED BANK INTSERST ON CASH CREDIT TO THE AMOUNT OF RS. 71,82,273/- AND PROCESSING CHARGES TO THE AMOUNT OF RS. 2,80,900/-. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE HAS PLACED RELIANCE ON THE DECISION OF LD. CIT(A). 7. HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. DURING THE YEAR UNDER CONSIDERATION SURVEY U/S. 133A OF THE AC T WAS CARRIED OUT ON 8 TH DECEMBER, 2014 AT THE BUSINESS PREMISES OF THE ASSE SSEE. ON PHYSICAL VERIFICATION OF THE STOCK, SURVEY TEAM HAS FOUND ST OCK OF JEWELERY TO THE AMOUNT OF RS. 18,26,797/- AS AGAINST STOCK SHOWN IN THE BOOKS TO THE AMOUNT OF RS. 1,78,92,962/-, THERE WAS SHORTAGE OF STOCK IN TRADE TO THE AMOUNT OF RS. 1,60,66,165/-. THE ASSESSEE HAS DECLARED INCOM E OF RS. 50 LACS. DURING THE COURSE OF ASSESSMENT, ASSESSING OFFICER OBSERVE D THAT ASSESSEE HAS NOT FULLY PAID THE ADVANCE TAX ON THE INCOME OF RS. 50 LACS DECLARED DURING THE SURVEY AS THE CHEQUES SUBMITTED DURING THE COURSE O F SURVEY WERE PARTLY PAID. CONSEQUENTLY, THE ASSESSING OFFICER HAS ADD ED THE AMOUNT OF RS. 50 LACS DECLARED DURING THE SURVEY TO THE TOTAL INCOME OF THE ASSESSEE. SUBSEQUENTLY, AT THE APPELLATE STAGE, THE LD. CIT(A ) HAS SUSTAINED THE ADDITION REITERATING THE FACTS REPORTED BY THE ASS ESSING OFFICER AND ALSO PLACED RELIANCE ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF FAKIR MHD. HAZI HASAN SUPRA STATING THAT ASSESSEE H AS NOT GIVEN SATISFACTORY EXPLANATION REGARDING THE SOURCE OF UNDISCLOSED AMO UNT AND THE SAME WAS I.T.A NO. 2341/AHD/2018 A.Y. 2015-16 PAGE NO M/S. ARIHANT JEWELS VS. ITO 6 TREATED AS HEADLESS INCOME. ON PERUSAL OF THE MATE RIAL ON RECORD, IT IS NOTICED THAT ASSESSEE HAS CATEGORICALLY BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER THAT THE ASSESSEE FIRM HAS SHOWN RS. 50 LAC S IN THE P & L A/C AS OTHER INCOME (INCOME TAX DECLARATION). IT WAS EXP LAINED THAT THE TAXABLE INCOME WAS LESS THAN RS. 50 LACS DUE TO DEDUCTION O F BANK INTEREST/BANK CHARGES TO THE AMOUNT OF RS. 74,63,173/-. IN SUPP ORT, THE ASSESSEE HAS ALSO FURNISHED THE AUDITED COPIES OF ANNUAL ACCOUNT OF T HE ASSESSEE FIRM DURING THE COURSE OF ASSESSMENT AND AT THE APPELLATE STAGE . ON PERUSAL OF THE MATERIAL ON RECORD, IT IS NOTICED THAT THE LOWER AU THORITIES HAS NOT DISPROVED THE GENUINENESS OF THE CLAIM OF INCURRING BANK INTE REST/BANK CHARGES EXPENDITURE DURING THE YEAR BY THE ASSESSEE FIRM TO THE AMOUNT OF RS. 74,63,173/-. DURING THE COURSE OF APPELLATE PROCEE DINGS, THE ASSESSEE HAS ALSO PLACED RELIANCE ON THE DECISION OF FOLLOWING J UDICIAL PRONOUNCEMENTS M/S. FASHION WORLD VS. ACIT VIDE ITA 1634/AHD/2016 DATED 12.02.2010 , DCIT VS. M/S. SHAH KHODI DAS VIDE ITA NO. 531/AHD/2 008 DATED 25.03.2011 AND CIT-II VS. SHILPA DYEING & PRINTING MILLS P. LTD. VIDE TAX APPEAL NO. 290 OF 2013 DATED 4 TH APRIL, 2013 (GUJARAT HIGH COURT). WE HAVE GONE THROUGH THE JUDICIAL PRONOUNCEMENTS REFER RED BY THE LD. COUNSEL AND NOTICED THAT THE CO-ORDINATE BENCHES OF THE ITA T HAS HELD THAT WHERE ASSET IN WHICH UNDECLARED INVESTMENT IS SOUGHT TO B E TAXED IS NOT CLEARLY IDENTIFIABLE OR DOES NOT HAVE INDEPENDENT IDENTITY BUT IS INTEGRAL AND INSEPARABLE PART OF DECLARED ASSET FALLING UNDER A PARTICULAR HEAD THEN THE DIFFERENCE SHOULD BE TREATED AS UNDECLARED BUSINESS INCOME EXPLAINING THE INVESTMENT. IN THE OTHER JUDICIAL PRONOUNCEMENT R EFERRED BY THE LD. COUNSEL PERTAINING CIT-II VS. SHILPA DYEING & PRINTING MIL LS P. LTD. SUPRA, THE HONBLE HIGH COURT OF GUJARAT HELD THAT THE DECISIO N IN CASE OF FAKIR MHD. I.T.A NO. 2341/AHD/2018 A.Y. 2015-16 PAGE NO M/S. ARIHANT JEWELS VS. ITO 7 HAZI HASAN SUPRA CAME UP FOR CONSIDERATION IN CASE OF RADHE DEVELOPERS INDIA LTD. (2010) 329 ITR AND IN THEIR OPINION THE STATUTORY PROVISION CONTAINED IN SECTION 71 WAS APPLICABLE AND BY APPLY ING THE DECISION IN CASE OF FAKIR MOHAMMED HAJI HASAN (SUPRA) AS EXPLAINED I N CASE OF RADHE DEVELOPERS INDIA LTD. THE SAME CANNOT BE DECLINED. THE LD. COUNSEL HAS ALSO BROUGHT TO THE NOTICE OF THE LD. CIT(A) THAT THE FI NANCE ACT, 2016 HAS BROUGHT AMENDMENT IN SECTION 115BBE AND THE AMENDME NT HAS BEEN MADE APPLICABLE W.E.F. 01.04.2017. IT IS NOTICED THAT L D. CIT(A) HAS NOT CONSIDERED THIS SPECIFIC SUBMISSION OF THE ASSESSEE. WE HAVE GONE THROUGH THE PROVISION OF SECTION 115BBE OF THE ACT SPECIFICALLY PERTAINING TO TAX OF INCOME REFERRED TO IN SECTION 68 OR 69 OR SECTION 6 9A OR SECTION 69B OR SECTION 69C OR SECTION 69D. THE RELEVANT PROVISION S ARE PRODUCED AS UNDER:- TAX ON INCOME REFERRED TO IN SECTION 68 OR SECTION 69 OR SECTION 69A OR SECTION 69B OR SECTION 69C OR SECTION 69D 115BBEE [WHERE THE TOTAL INCOME OF AN ASSESSEE- (A) INCLUDES ANY INCOME REFERRED TO IN SECTION 68, SECT ION 69, SECTION 69A, SECTION 69B, SECTION 69C,OR SECTION 69D AND REFLECTED IN THE RET URN OF INCOME FURNISHED UNDER SECTION 139 OR (B) DETERMINED BY THE ASSESSING OFFICER INCLUDES ANY I NCOME REFERRED TO IN SECTION 68, SECTION 69, SECTION 69A, SECTION 69B, SECTION 69C O R SECTION 69D, IF SUCH INCOME IS NOT COVERED UNDER CLAUSE (A) THE INCOME-TAX PAYABLE SHALL BE THE AGGREGATE OF (I) THE AMOUNT OF INCOME-TAX CALCULATED ON THE INCOME R EFERRED TO AN CLAUSE (A) AND CLAUSE(B), AT THE RATE OF SIXTY PERCENT; AND (II) THE AMOUNT OF INCOME-TAX WITH WHICH THE ASSESSEE W OULD HAVE BEEN CHARGEABLE HAD HIS TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME REFERRE D TO IN CLAUSE (I) (2) 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 COMPUTING HIS INCOME REFERRED TO IN CLAUSE (A) OF S UB-SECTION (1)] AFTER PERUSAL OF THE ABOVE STATED PROVISIONS OF SEC TION 115BBE, IT IS NOTICED PROVISION OF SECTION 115BBE(2) HAS BEEN INSERTED BY THE FINANCE ACT 2016 W.E.F. 01.04.2017 WHICH SPECIFICALLY SAY THAT NO DE DUCTION IN RESPECT OF ANY EXPENDITURE OR ALLOWANCE OR SET OFF ANY LOSS SHALL BE ALLOWED TO THE ASSESSEE I.T.A NO. 2341/AHD/2018 A.Y. 2015-16 PAGE NO M/S. ARIHANT JEWELS VS. ITO 8 UNDER ANY PROVISION OF THE ACT IN COMPUTING HIS INC OME REFERRED TO IN CLAUSE (A) OF SUB-SECTION (1). IN SUB-SECTION (2) OF SEC TION 115BBE AS INTRODUCED BY FINANCE ACT, 2012 ONLY DISALLOWANCE OF EXPENDITU RE OR OTHER ALLOWANCE WAS CONSIDERED AGAINST UNACCOUNTED INCOME U/S. 68 T O SECTION 69D BUT BUSINESS LOSS WAS NOT COVERED. IT IS ONLY BY FINAN CE ACT, 2016 W.E.F. 01.04.2017 IT IS INSERTED IN THE PROVISION TO DENY BENEFIT OF SET OFF OF ANY LOSS. THEREFORE, IN THE CASE OF THE ASSESSEE, IF WE REDUCE THE BUSINESS INCOME BY RS. 50,00,000/- (INCOME TAX DECLARATION D URING SURVEY) THEN WE SHALL ARRIVE AT LOSS OF RS. 49,70,470/-. IN THAT C ASE THE AMOUNT OF RS. 50,00,000/- WILL BECOME TAXABLE UNDER THE HEAD INC OME FROM OTHER SOURCES. BUT A SET OFF OF BUSINESS LOSS OF RS. 49 ,70,470/- SHALL BECOME ALLOWABLE SINCE THE PROVISION TO DENY SET OFF OF LO SS IS INTRODUCED W.E.F. 01.04.2017 IN SECTION 115BBE OF THE ACT. EVEN UND ER THESE CIRCUMSTANCES ALSO, THE ASSESSEE WILL DERIVE THE GROSS TOTAL INCO ME OF RS. 29,530/- . SINCE THE CASE OF THE ASSESSEE IS PERTAINED TO ASSESSMENT YEAR 2015-16, THEREFORE, IN THE LIGHT OF THE ABOVE FACTS AND FINDINGS, THE A PPEAL OF THE ASSESSEE IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15-02-2021 SD/- SD/- (MAHAVIR PRASAD) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 15/02/2021 I.T.A NO. 2341/AHD/2018 A.Y. 2015-16 PAGE NO M/S. ARIHANT JEWELS VS. ITO 9 / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,