The DCIT, Central Circle-3,, Baroda V. Shri Rakesh S. Agrawal, Baroda

ITSSA 88/AHD/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4674 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 21-04-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 21-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Gift; Business income; Revision of order; Salary income; Question of law; Cost of acquisition; Block assessment; Capital receipt; Revised return; Reassessment proceedings; Capital Gains; CHAPTER XIVB
• Section: 147; 68; 69; 148; 132; 69C; 139; 143(3); 153A; 139(5); 69A; 139(1); 64; 13; 153; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH (Conducted Through Virtual Court) Before: Ms. Annapurna Gupta, Accountant Member And TR Senthil Kumar, Judicial Member DCIT Central Circle-3, Vadodara (Appellant) Vs Shri Rakesh S Agrawal, Bayer ABS Ltd., 8 th floor, ABS Tower, O.P. Road, Vadodara PAN: AAQPA 3487P (Respondent) Appellant by : Shri Milin Mehta, A.R. Respondent by : Shri Sanjeev Jain, CIT/DR Date of hearing : 15-02-2022 Date of pronouncement : 22-04-2022 आदेश/ORDER PER : ANNAPURNA GUPTA, ACCOUNTANT MEMBER:- The present appeals relate to the same assessee and have been filed by the Revenue against common order of the Ld. Commissioner of Income Tax (Appeals)- 8, Ahmedabad, (in short referred to as CIT(A)), dated 07-06-2019, u/s. 250(6) of the Income Tax Act, 1961(hereinafter referred to as the “Act”) pertaining to Assessment Year 2009-10 to 2014-15 . 2. At the outset itself, it was pointed out that the issues involved in these appeals were common, arising in the back drop of identical set of facts. All the appeals were therefore taken up together for hearing. IT(SS)A No. 88 to 92/Ahd/2018 Assessment Year 2009-10 to 14-15 I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 2 3. Brief background leading to the present appeals before us is that search action was conducted on the asessee u/s. 132 of the Act on 12/02/2015 and it was revealed that the assessee was maintaining a bank account in Merill Lynch Bank, New York. Notices u/s. 153A of the Act were issued to the asessee in response to which returns were filed for all the impugned assessment years i.e. A.Y. 2009 10 to 2014-15, i.e six years prior to the year in which search was conducted. The assessee declared income under different heads including income from salary, house property, income from other sources, income from business and profession and capital gains. The income from business and profession disclosed related to transaction revealed in the aforesaid foreign bank account. For the first two years i.e A.Y 2009-10 and 2010- 11,the assessee returned losses from business and profession ,which since could not be set off against current years income comprising majorly of salary income, were carried forward for set off against profits of business returned in the subsequent years. Computation for A.Y 2009-10 and 2011-12 is reproduced hereunder for clarity: A.Y 2009-10 Computation of Total Income Income Heads Income Before set off Income After set off Income from salary 13425427 13425427 Income from House Property 37470 0 Income from Business of Profession -75454914 0 Income from Capital Gains -48829 0 Income from other sources 21720 0 Gross total income 13425427 Less: Deduction under Chapter VIA 100000 Total Income 13325427 Rounding off u/s. 288A 13325430 Income taxable at Normal Rate 13325430 Income Taxable at Special Rate 0 Income from Business & Profession Details Trading in foreign shares and securities 0 (Foreign Assets) I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 3 Net Loss As per P&L A/c -75454914 Total of Business & Profession 0 Loss adjusted with House Property 37470 Loss adjusted with Other Income 21720 Current Year Losses Carry Forward Nature of Loss Assessment Year Loss C/F Business income (Ordinary) Cannot C/F 2009-10 75395724 Capital Loss (ST) Cannot C/F 2009-10 48829 A.Y. 2011-12 Computation of Total Income Income Heads Income Before set off Income After set off Income from salary 20534840 20534840 Income from House Property 45097 45097 Income from Business of Profession 8547101 0 Income from Capital Gains -2089 0 Income from other sources 4286177 4286177 Gross total income 24866114 Less: Deduction under Chapter VIA 105000 Total Income 24761114 Rounding off u/s. 288A 24761110 Income taxable at Normal Rate 24761110 Income Taxable at Special Rate 0 Income from Business & Profession Details Trading in shares and securities 0 (Foreign Assets) Net Profit As per P&L A/c 8547101 Total of Business & Profession 8547101 Setoff of Business (Ordinary) Loss 2009-10 B/Fwd 8547101 I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 4 4. In the assessment framed the Assessing Officer (AO) disallowed the losses and their carry forward, as claimed in the first two years, for various reasons which shall be brought out in the later part of the order, and as a consequence their set off against business income in subsequent years also and also made addition made u/s. 68 of the Act of the credits in the foreign bank account of the assessee. Briefly summarized the assessments framed for each year is as under: Particulars Income declared in the return u/s. 153A Disallowance of loss Disallowance of set off loss Addition of Unexplained credits Total Income assessed A.Y. Amount Amount Amount Amount Amount 2009-10 1,33,25,430/- 7,54,54,914/- -------- 30,80,31,610/- 32,13,57,040/- 2010-11 2,52,16,680/- 56,61,579/- --------- 15,04,94,322/- 17,57,11,000/- 2011-12 2,47,61,110/- ----------- 85,47,101/- 27,02,68,615/- 30,35,76,830/- 2012-13 1,98,40,220/- ------------- 1,32,25,391/- 16,57,62,670/- 19,88,28,280/- 2013-14 2,27,37,640/- ------- 46,12,131/- 64,56,398/- 3,38,06,170/- 2014-15 44,26,850/- ---------- 1,40,04,621/- 66,50,702/- 2,50,82,170/- 5. All the above additions were deleted by the ld. CIT(A), against which the present appeals have been filed by the Revenue raising identical grounds in all the years involved ; i.e against deletion of disallowance of business losses/ disallowance of set off of losses and against addition u/s. 68 of the Act. For the sake of convenience we are reproducing the grounds for A.Y 2009-10 & 2011-12 , which include grounds relating to disallowance of loss and setoff of loss respectively as under; A.Y. 2009-10 1. On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the disallowance of the carry forward of business loss of Rs. 7,54,54,914/- without considering the fact that the assessee had not claimed loss I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 5 in the return of income filed u/s 139(1) of the I.T.Act, but claimed losses when filing the return u/s 153A . 2. On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs. 30,80,31,610/- made on account of unexplained credit in foreign bank account u/s 68 of the Act without considering the fact that the assessee failed to give any documentary proof to explain the source of credit entries in the said bank account. 3. It is, therefore, prayed that the order of the Ld.CIT(A)-12, Ahmedabad may be set- aside and that of the A.O. may be restored to the above extent. 4. The appellant craves leave to add, alter, amend and/or withdrawn any ground(s) of appeal either before during the course of hearing of the appeal. A.Y. 2011-12 (1) On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the disallowance of the carry forward of business loss of Rs.85,47,101/- without considering the fact that the assessee had not claimed loss in the return of income filed u/s.139(1) of the I. T. Act, but claimed losses when filing the return U/S.153A. (2) On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs.27,02,68,615/- made on account of unexplained credit in foreign bank account u/s.68 of the Act without considering the fact that the assessee failed to give any documentary proof to explain the source of credit entries in the said bank account. (3) It is, therefore, prayed that the order of the Ld.CIT(A)-12, Ahmedabad may be set-aside and that of the A.O. may be restored to the above extent. (4) The appellant craves leave to add, alter, amend and/or withdrawn any ground(s) of appeal either before or during the course of hearing of the appeal. 5.1 Since the issues involved in all the appeals are identical and interlinked, we shall be dealing with them vide a common consolidated order. I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 6 6. Coming to the specific facts of the case leading to the aforestated additions/disallowances, it transpires from the order of the lower authorities that during search action on the assessee u/s 132 of the Act on 12/02/2015 and in post search enquiry it was gathered that Shri Rakesh Agarwal, the assessee, was maintaining a bank account (ICA03C46) with Merill Lynch Bank, New York in the name of M/s Pinky Ltd. During another search on 05/01/2012 at the residence of one Shri Satish Sawhney at Sainik Farm, New Delhi it was further gathered that there were few transactions between his foreign bank account No. ICA03A13, in the name of Prime Trade Ltd., with the foreign bank account of M/s Pinky Ltd. The assessee denied the existence of any foreign account in his name or in the name of any family member or any group entity and also denied any transaction with the bank account of Shri Satish Sawhnay, but later on in the month of September 2015 he declared the foreign assets i.e. foreign bank account No. ICA03C46 prior to A.Y 2009-10 under the Black Money(Undisclosed Foreign Income and Assets)And Imposition of Tax Act,2015 (hereinafter referred to as “Black Money Act”). In the returns filed for the subsequent years u/s 153A of the Act the assessee claimed business loss of Rs.7,54,54,929/- for the A.Y. 2009-10 and Rs.56,61,568/- for the A.Y. 2010-11 in relation to various investments and trading in shares, MFs and securities through the said foreign bank account and in A.Y 2011-12 to A.Y 2014-15 he returned profits therefrom and claimed set off of earlier year losses from the same. The AO has discussed various issues related thereto at paragraphs 6 to 11.9 from pages No. 2 to 12 of the assessment order and concluded that as the assessee denied the ownership and also being beneficiary of the said foreign bank account he was not entitled to claim the losses from transactions conducted through the said account, as also their set off in subsequent years. The AO denied the loss also for the reason that it had not been claimed in his original return filed u/s 139(1),which as per the AO was a necessary prerequisite for claiming carry forward and set off of business losses. The AO accordingly held that the loss claimed by the assessee was not justified and disallowed the loss as claimed by the assessee in return filed u/s 153A for the first I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 7 two years i.e A.Y 2009-10 and 2010-11 and also its carry forward and set off from profits from business returned in later years, i.e A.Y 2011-12 to 2014-15 7. Further from the perusal of details filed by the assessee regarding the foreign bank account with Merill Lynch Bank, the AO noticed that there were credits of dividends, bank interests, distributions and other investments etc in the bank account. Also there were two credits aggregating to US $3,10,000/- in F.Y, 2010-11 and three credits aggregating to US $230,500/- in F.Y. 2011-12 from M/s Prime Trade Ltd. The assessee stated his ignorance about the said transactions from M/s Prime Trade Ltd. to M/s Pinky Ltd., that they were probably incorrect entries in the account (possibly made fraudulently) without knowledge of the assessee and also claimed that the sum of US $525,094/- had been subsequently removed from the account by the Bank on account of the credit from Prime Trade Ltd. and some other incorrect debits. The assessee was also asked about credit of US $50,000/- on 25/06/2010 in the foreign bank account of Pinky Ltd. but the assessee could not explain the source of this amount also and did not file any evidence in support of his claim of fraudulent entries passed through the account of Pinky Ltd. Accordingly the AO held that calculation of income on account of the foreign bank account given by the assessee for the year under consideration could not be relied upon particularly in view of the fact that the assessee had failed to give any documentary proof to explain the source of credit entries in the said bank account and therefore the entire credit in the bank account during the years under consideration , was added to the total income of the assessee in the respective years as unexplained credits in the bank accounts of the assessee u/s 68 of the Income Tax Act. The AO has discussed various issues related thereto at paragraphs 12 to 12.5 from pages No. 12 to 15 of the assessment order. 8. With regards to the issue raised in ground no. 1 by the Revenue challenging the order of the Ld.CIT(A) for deleting the disallowance of business loss in the first two I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 8 assessment years before us and their carry forward and set off in subsequent years, the ld. D.R. relied on the order of the A.O. His contention in brief being that: (i) the assessee had all along denied ownership of the foreign bank account of M/s. Pinky Ltd. and also being beneficiary of the said bank account. Therefore how then could he claim the losses incurred on transactions in the said account. (ii) As per the provisions of law, u/s. 80 of the Act, no loss from business shall be carried forward and set off against income in future years which has not been determined in pursuance of return filed in accordance with the provisions of sub-section (3) of Section 139 of the Act, which requires such losses to be returned by the due date prescribed u/s. 139(1) of the Act for caiming benefit of carry forward and set off of the same. That the asessee had claimed the losses in its returned filed u/s. 153A of the Act and not in the returns originally filed u/s. 139(1) of the Act and therefore the assessee was not entitled to claim carry forward and set off of losses in subsequent years as per law. (iii) That since the assessee had declared assets under the Black Money Act no deduction in respect of any expenditure or allowance or set off of loss was allowable to the assessee in accordance with the provisions of the Income Tax Act. 9. Ld. Counsel for the assessee per contra relied on his contentions made before the ld. CIT(A) reproduced at para 3.6.7 to 3.6.12 of the order of the Ld.CIT(A) as under: 3.6.7 It is submitted that the Appellant filed the original return of income for each of the year within the due date provided under the Act and therefore there is no embargo in claiming the losses (whether claimed in the original return or in a subsequent returns). I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 9 Further, returns in pursuance of notice U/s. 153 A have also been filed within the time limit provided in the respective notices. Section 153A (1) (a) clearly provides that the return which is filed U/s, 153A, the provisions of the Act shall apply as if such return is the return required to be filed U/s. 139, Considering the fact that the Appellant has filed his original return of income and also the return in furtherance of notice U/s. 153 A in time, by virtue of Section 80 of the Act, the Appellant is entitled to claim the set off of losses under the other heads of income and carry forward and set off the said business loss in the succeeding years. 3.6.8 Reliance has been placed on the decision of Chennai ITAT in the case of ACIT vs. V.N. Devedoss [2013] 57 SOT 67 wherein the ITAT held that return filed u/s 153A shall be treated as returns filed u/s 139(1) and accordingly deduction claimed in return filed u/s 153A shall be allowed. 3.6.9 The Appellant for the current year i.e. AY 2015-16, had claimed the set off of loss in the revised return of income filed on 02-03-2016. The revised return of income was filed within the time allowed u/s 139(5) of the Act i.e. before the completion of 1 year from the end of relevant assessment year. The issue is directly covered in favour of the Appellant by the recent decision of the Hon’ble Gujarat High Court in the case of PCIT vs. Babubhai Ramanbhai Patel [2017] 84 taxmann.com 32. The observations of the High Court are as under: Under sub-section (1) of section 139, every person whose income for the previous year exceeds the maximum amount not chargeable to tax, is required to file a return before the due date. Sub-section (3) of section 139 provides that any person who has sustained a loss and claims that the loss should be carried forward would file a return of loss within the time prescribed under sub-section (1) and thereupon all the provisions of the Act shall apply as if it was a return under sub-section-(1) of section 139 of the Act. Under sub-section (4) of section 139, a person who has not furnished a return within the time allowed under sub- section (1), may still furnish a return at any time before the end of the relevant assessment year or before the completion of the assessment whichever is earlier. Sub-section (5) of Section 139 provides that any person having furnished a return under sub-section(1) or sub-section section (4) discovers any omission or a wrong statement therein, he may furnish a revised return any time before the I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 10 expiry of one yea/from the end of relevant assessment year or before the completion of the assessment whichever is earlier. Sub-section (5) of section 139, therefore, gives right to an assesses who has furnished a return under sub-section I'll or sub-section (4) to revise such return on discovery of any omission or a wrong statement Such revised return, however, can be filed before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. This is precisely what the assesses did while exercising the right to revise the return. Sub-section (5) of section 139 does not envisage a situation whereupon revising the return if a case for loss arises which the assessee wishes to carry forward, the same would be impermissible.. In terms, sub-section(5) of section 139 allows the assessee to revise the return filed under section (1) or sub-section (4) as long as the time frame provided therein is adhered to and the requirement of the revised return has arisen on discovery of any omission or a wrong statement in the return originally filed. Accepting the contention of the revenue would amount to limiting the scope of revising the return already filed by the assessee flowing from sub-section (5). No such language or intention flows from such provision. In view of the above, there is no error in the view of the Tribunal The revenue's appeal is, therefore, dismissed. [Emphasis Supplied] 3.6.10 On perusal of the above decision, it is noticed that the High Court held that if the return of income u/s139(5) is filed within the time, loss claimed in such return must be allowed. The High Court also observed that section 139(5) does not envisage a situation whereupon revising the return if a case for loss arises which the assessee wishes to carry forward, the same would be impermissible. Similarly, section 153 A also does not envisage a situation that the loss claimed in the return of income filed u/s 153A would be disallowed. In fact, section 153A provides that the all the provisions of the Act shall be applicable to return filed u/s 153A as if the return is filed u/s 139(1). Hence, we request your kind office to allow the set off of brought forward business loss. 3.6.11 The Appellant further submits that the AO blows hot and cold in the same breath. The AO while does make addition of the income earned in the said bank account but when it comes to computing the losses in the said bank account, he suddenly refuses I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 11 to recognize the said bank account as the account belonging to the Appellant. It is submitted that the said stand of the AO is self contradictory. If the AO denies losses to the Appellant on the ground that the said bank account is not in the name of the Appellant, or the Appellant has not owned up the said bank. Cannot though having paid tax on the transactions reflected therein, then the AO cannot tax the income generated from the said bank account also, leave apart making addition U/s. 68, The fact, that the AO makes addition U/s, 68, the AO himself takes the position that the said bank account is that of the Appellant. In view of the same, it would be wholly incorrect for the AO to deny the losses merely on the ground that the account was in the name of some other person or that the Appellant has not owned up the said bank account. Once he taxes the income arising from the transactions in the said bank account, he cannot turn back and take a completely different stand on the losses arising from the said transactions. 3,6.12 The AO has also erroneously pointed out that the Black Money Act mandates that the losses are not allowable under the Income Tax Act also. The Black Money Act only governs the provisions of the said Act and does not have any overriding effect. In fact, the Appellant submits that the Black Money Act expects the income for the subsequent period or the period not covered by the compliance window to be computed as per the normal provision and therefore vide Question Number 5 of the FAQ issued under the Black Money Act, it is provided that subsequent disposal of the assets after the compliance window would be covered by the normal provision and for that purpose the value adopted for the declaration would be treated as the cost of acquisition. Therefore the Black Money Act recognizes the fact that there could be income/loss subsequently and the same may be charged to tax or allowed under the normal provisions of the Income Tax Act. 10. And further to the findings of the Ld. CIT(A) at para 3.9.6 to 3.9.8 as under : 3.9.6 As to the disallowances of losses of US $1,480,944 (i.e. Rs.7,54,54,929/-) in F.Y.2008-09 and US $125,630 (i.e. Rs.56,61,568/-) for F.Y.2009-10 in relation to the transactions in various mutual funds, securities through the foreign bank account with Merrill Lynch Bank, NY, it is submitted by the appellant that following the case laws ACIT Vs. V N Devedoss (supra) [wherein the Hon. ITAT Chennai held that deduction u/s 80IB(10) claimed in return u/s 153A cannot be denied on the ground that said claim was not made earlier in return u/s 139(1) and PCIT Vs. Babubhai Ramanbhai Patel (supra), I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 12 the claims of the losses should be allowed. In contrast to these judgements, it is also located that in Jai Steel (India) Vs. ACIT (2013) 36 taxmann.com 523 (Raj) it has been held that it is not open for assessee to seek deduction to claim expenditure which has not been claimed in original assessment, which assessment already stands completed, only because assessment u/s 153A in pursuance of search or requisition is required to be made. Then this was pointed out to the Ld. ARs; this issue also has been responded to by the appellant as reproduced earlier (in para 3,8). 3.9.7 Apart from mentioning that the loss which had not been claimed in original return filed u/s. 139(1) cannot be claimed in the return u/s. 153A and in view or no evidence having been filed in respect of claim of loss the AO has also opined that the Black Money Act mandates that the losses are not allowable under the Inconel Tax Act also and that the Black Money Act only governs the provisions of the said Act and does not have ant overriding effect In this context the Appellant submits that the Black Money Act expects the income for the subsequent period or the period not covered by the compliance window to be computed as per the normal provision and therefore vide Question Number 5 of theFAQ issued under the Black Money Act, it is provided that subsequent disposal of the assets after the compliance window would be covered by the normal provision and for that purpose the value adopted for the declaration would be treated as the cost of acquisition. It is the case of the appellant that the Black Money Act recognizes the fact that there could be income/loss subsequently and the same may be charged to tax or allowed under the normal provisions of the Income Tax Act. 3.9,8 I am of the considered view that the Department having conducted search u/s 132 on a person/group of cases, some convenience, if any should lie in favour of the taxpayer if not expressly prohibited under the Act. Otherwise also this is well-settled cardinal principle in the interpretation of taxation statute that if there are two interpretations of a provision possible, the interpretation favourable to the taxpayer should be applied. Thus subsequent to a search action when a person is required to-file return(s) of income for the years for which notices are issued by the Department and such returns u/s 153A are to be treated as return(s) filed u/s 139, the assessee is required to show all the income disclosed and emanating from the evidences found during the search, the assessee should also be eligible to claim the deduction(s) and set off which pertain to the evidences unearthed included those omitted to be included. Of the new evidences unearthed only income/receipts cannot be considered ignoring losses/payments therein so also the AO cannot deny the claim of loss in any of the year and set off of the loss in subsequent year(s) on the ground that the bank/portfolio account was not of the appellant but at the same time chose to add the assets/credits/income therein in the hands of the appellant. The AO must be consistent and holistic and cannot pick and chose the figure and reasoning randomly as per his whims and suitability, I find that the case laws relied upon by the appellant are against the treatment meted out by the AO. I hold that there being no bar in the Black Money Act, the loss on account of the foreign bank account claimed in the returns u/s 153A for I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 13 the year under consideration is admissible and will be eligible for set off in subsequent years as per the provisions of the Income Tax Act. Accordingly, the A.O. is directed to delete the disallowance of loss of Rs. 7,54,54,914/-. The appeal succeeds on this ground. 11. Briefly stated, the Ld.Counsel for the assessee relied on the findings of the Ld.CIT(A) while rejecting all the basis of the AO for denying the claim of carry forward and set off of business losses, holding that having accepted income as profits from the said transactions in succeeding years the AO could not have denied losses in earlier years stating that the account does not belong to the assessee , that the provisions of the Benami Act had no overriding effect and could not apply to the Income Tax Act and taking a holistic view on the issue that if an assessee is required to disclose income revealed from /emanating from the incriminating material/evidences found, he should also be entitled to claim deductions/setoffs emanating from the same evidences. 12. After hearing both the parties and going through the orders of the authorities below we concur with the Ld.CIT(A) that the disallowances of business losses and their carry forward and set off against business losses in succeeding years could not have been denied to the assessee. 13. We shall elucidate our reasons for holding so, but before proceeding to do so it is relevant to highlight certain undisputed facts which are necessary for adjudicating the issue. 14. Search action u/s 132 of the Act was conducted on the assessee on 12-2-2015 revealing a foreign bank account in the name of M/s Pinky Ltd in Merrill Lynch Bank New York being operated by the assessee. The search year accordingly was A.Y 2015-16 and six years prior to the year of search covered for assessment u/s 153A were A.Y 2009-10 to 2014-15, which are the years in appeal before us. The business losses which are in dispute before us all emanate from transactions undertaken in the I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 14 said bank account. The impugned bank account prior to A.Y 2009-10 stood disclosed by the assessee under the Black Money (Undisclosed Foreign Income and Foreign Asset) and Imposition of Taxes Act, 2015(hereinafter referred to as “Black Money Act”) as per the provisions of section 59 of the Act and various circulars issued by the government, taxes paid thereon and the declaration of the assessee accepted by way of acknowledgement issued in Form No.7, prescribed under the Rules thereon. For the subsequent six years covered under search assessment ,i.e A.Y 2009-10 to 2014-15,the losses/profits from transactions undertaken in the said bank account were disclosed as business profits/losses for the first time in the returns filed in response to notice u/s 153A of the Act and amounted to as under: A.Y Profits/Losses from business returned 2009-10 (-) Rs. 7,54,54,914/- 2010-11 (-) Rs.56,61,570/- 2011-12 Rs.85,47,101/- 2012-13 Rs.1,32,25,391/- 2013-14 Rs.46,12,131/- 2014-15 Rs.1,40,04,621/- 14. The losses returned for A.Y 2009-10 & 2010-11 have been disallowed, while the profits returned have been accepted. For A.Y preceding A.Y 2009-10,i.e A.Y 1999- 2000 to A.Y2008-09, the case of the assessee was reopened to bring to tax income from the said foreign bank account, but no addition was made accepting the assesses plea, after verification ,of the bank account having been disclosed upto A.Y 2008-09 under the Black Money Act. 14.1 The above fact, at the cost of repetition, we may state are undisputed. 15. Based on the aforestated undisputed facts ,we shall now point out the reasons for rejecting each contention of the Revenue for upholding the disallowance of losses I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 15 for A.Y 2009-10 and 2010-11 and their carry forward and set off against profits in subsequent years. 16. Taking up first the contention of the Revenue that the losses were disallowable for the reason that the bank account did not belong to the assessee, we concur with the Ld.CIT(A) that there is patent fallacy in this argument, being that profits on account of transactions in this very same bank account returned by the assessee in A.Y 2011-12 to A.Y 2014-15 have been accepted by the Department and also the fact that the assessee has disclosed this very bank account under the Black Money Act upto A.Y 2009-10, which has been accepted and nothing has been pointed out at any stage by the department showing revocation of the acceptance. Also noting this fact of disclosure made by the assessee of the foreign bank account under the Black Money Act, the reassessment proceedings initiated by the AO on the assessee for A.Y 1998-99 to 2008-09, resulted in no addition being made on account of transactions in the said foreign bank account, accepting the assesses plea that for the said years the assesee had made disclosure of the bank account in the window period provided under the Black money Act. 17. The Department therefore, there is no doubt, has accepted the bank account in the name of M/s Pinky Limited in Merrill Lynch, New York, as pertaining to the assessee or in other words the assessee being the beneficiary of the said account. There is no reason therefore to deny losses on account of transactions undertaken in the said account in A.Y 2009-10 & 2010-11 for the reason that the bank account does not belong to the assessee. We therefore concur with the findings of the Ld.CIT(A) on this count. 18. Now coming to the argument that the Benami Act denied the assessee benefit of set off of losses, we again agree with the Ld.CIT(A) that the denial so provided in the Black Money Act was with reference to incomes disclosed in the said Act only. I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 16 Section 5 of the Black Money Act dealing with the computation of total undisclosed foreign income and asset under the Act and which denies deduction of any expenditure or allowance or set off of loss ,is applicable for the purposes of the said Act only. We therefore do not find any infirmity in the findings of the Ld.CIT(A) that the Black Money Act having no overriding effect over the Income Tax Act, the denial of set off of losses/expenses in the said Act could not be applied to the Income Tax Act. 19. Now coming to the contention that law mandates allowance of carry forward and set off of loss from business, only if the loss is returned within due date prescribed for filing return u/s 139(1) of the Act, as per section 80 r.w.s 139(3) of the Act and losses declared in returns filed u/s 153A of the Act being beyond the time so prescribed are therefore not allowable. 20. There is no quarrel with the proposition of law that only losses returned within due date of filing return u/s 139(1) of the Act is allowed to be carried forward for setoff. But the assesses contention ,accepted by the Ld.CIT(A), is that return filed u/s 153A of the Act is to be treated for all purposes as return filed u/s 139 of the Act, based on the provision of section 153A(1)(a) as under: SECTION 153A. Assessment in case of search or requisition. 4587 [ 4588 [(1)] Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003 [ 4589 ][but on or before the 31st day of March, 2021], the Assessing Officer shall- (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years 4590 [and of the relevant assessment year or years] referred to in clause (b), in the I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 17 prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (emphasis supplied by us) (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made 4591 [and of the relevant assessment year or years]: Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years 4592 [and for the relevant assessment year or years]: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years 4593 [and for the relevant assessment year or years] 4594 [referred to in this sub-section] pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate: and the return filed u/s 153A in the present case being in time ,it is entitled as per law to claim carry forward and set off of losses. The Revenue vehemently disagrees with same. Both have relied on various case laws for the purpose more particularly CIT vs B G Shirke Construction Technology (P) Ltd. (2017) 395 ITR 371(Bom) by the assessee and Jai Steel (India), Jodhpur vs ACIT (2013) 259 CTR 281 (Raj) by the Revenue. 21. We have given our deep and thoughtful consideration to the issue and we hold that in the facts of the present case the return filed u/s 153A of the Act declaring losses for A.Y 2009-10 and 2010-11, can be said to be filed u/s 139(1) of the Act, for the purposes of carry forward and set off of the losses in subsequent years from business income. The reasoning for the same is based on the judicial interpretation of the provisions relating to search assessment u/s 153A of the Act, including those relating to allowance of fresh claims made in returns filed u/s 153A of the Act, dealt with both by the Hon’ble Bombay High Court in Shirke Constructions (supra) and I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 18 the Hon’ble Rajasthan High Court in Jai Steels (supra), relied upon by both the assessee and Department respectively, while canvassing their contentions. 22. Returns in the impugned cases relate to those filed consequent to search conducted u/s 132 of the Act, in response to notice u/s 153A of the Act, as per the specific scheme for assessment in search cases provided u/s 153A to 153D of the Act. Section 153A,reproduced above, begins with a non obstante clause vis a vis section 139,147,148 149,151 and section 153 of the Act and requires notices to be issued to asseesees searched , for filing returns of income for six years prior to the year of search and the searched year also, . It further states that to such returns filed all provisions of the Act would thereafter apply treating them as filed u/s 139(1) of the Act. The AO is required to assess or reassess the income of each such years. And it is further provided that where assessments are pending on the date of search such assessments shall abate and assessments u/s 153A carried out. These are the plain provisions of law with regard to search assessments as per section 153A of the Act. 23. Courts have had the occasion to interpret the scope of assessments for all the years involved, whether the entire case is open to scrutiny u/s 153A for all the years involved and the more or less consistent view has been that in case of assessment years where the assessments stood completed ,the scrutiny /addition was to be restricted only with respect to incomes emanating from incriminating material, while where assessments stood abated the entire case was open to scrutiny. Almost all the Hon’ble High Courts have taken this view, including the hon’ble jurisdictional High Court in the case of Principal Commissioner of Income Tax vs Saumya Constructions P. Ltd (2016) 387 ITR 529(Guj). 24. Taking a cue from this proposition of law and going forward, Courts have also dealt with the issue of fresh claim of expenses/ deduction in the return filed u/s I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 19 153A of the Act, not claimed in the original return filed u/s 139 of the Act. Conversely courts have dealt with the issue whether returns filed u/s 153A of the Act could be treated as returns filed u/s 139(1) of the Act, for the purposes of making fresh claims therein. Two such decisions have been referred to in the case before us, as pointed out above,  Jai Steel (India),Jodhpur vs ACIT (2013) 259 CTR 281 (Raj)  CIT vs B G Shirke Construction Technology (P) Ltd. (2017) 395 ITR 371(Bom 25. The Hon’ble Rajasthan High Court, in the case of Jai Steel (supra), held no fresh claim can be made in the return filed u/s 153A of the Act. But it is pertinent to point out the facts in which it was so held and the reasoning of the Hon’ble court while holding so. In the said case the fresh claim by the assessee in the return filed u/s 153A of the Act related to treatment of Sales Tax Incentive as capital receipt and related to the year where assessment was completed. The claim did not arise from any incriminating material found during search. The Hon’ble High Court held that the proceedings u/s 153A of the Act in such cases, where assessment was not abated, were to be treated as akin to section 147 of the Act and the completed assessments could not be disturbed except on account of incriminating information/material. That accordingly therefore assessee also was not entitled to make any fresh claim of expense /deduction in the return filed u/s 153A of the Act, not claimed in the original return filed u/s 139 of the Act. The return so filed u/s 153A of the Act, therefore it was held, could not be treated as filed u/s 139 of the Act for the purpose of allowing the claim. The relevant findings of the Hon’ble High Court are as under: To consider the rival submissions made at the Bar in the context of the present case and the substantial question of law framed, the scope of 'assessment and reassessment of total income' under Section 153A(1)(b) and the first and second I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 20 proviso have to be considered. Further, for answering the above issues, guidance will have to be sought from Section 132(1) of the Act, as Section 153A of the Act cannot be read in isolation, inasmuch as, the same is triggered only on account of any search/requisition under Sections 132 or 132A of the Act. If any books of accounts or other documents relevant to the assessment had not been produced in the course of original assessment and, found in the course of search, such books of accounts or other documents have to be taken into consideration while assessing or reassessing the total income under the provisions of Section 153A of the Act. Even in a case where undisclosed income or undisclosed property has been found as a consequence of the search, the same would also be taken into consideration. The requirement of assessment or reassessment under the said section has to be read in the context of Sections 132 or 132A of the Act, inasmuch as, in case nothing incriminating is found on account of such search or requisition, then the question of reassessment of the concluded assessments does not arise, which would require more reiteration and it is only in the context of the abated assessment under second proviso which is required to be assessed. The underline purpose of making assessment of total income under Section 153A of the Act is, therefore, to assess income which was not disclosed or would not have been disclosed. The purpose of second proviso is also very clear, inasmuch as, once a assessment or reassessment is 'pending' on the date of initiation of search or requisition and in terms of Section 153A a return is filed and the AO is required to assess the same, there cannot be two assessment orders determining the total income of the assessee for the said assessment year and, therefore, the proviso provides for abatement of such pending assessment and reassessment proceedings and it is only the assessment made under Section 153A of the Act would be the assessment for the said year. The necessary corollary of the above second proviso is that the assessment or reassessment proceedings, which have already been 'completed' and assessment orders have been passed determining the assessee's total income and, such orders are subsisting at the time when the search or the requisition is made, there is no question of any abatement since no proceedings are pending. In such cases, where the assessments already stands completed, the AO can reopen the assessments or reassessments already made without following the provisions of Sections 147, 148 and 151 of the Act and determine the total income of the assessee. The argument raised by the counsel for the appellant to the effect that once a notice under Section 153A of the Act is issued, the assessments for six years are at large both for the AO and assessee has no warrant in law. In the firm opinion of this Court from a plain reading of the provision alongwith the purpose and purport of the said provision, which is intricately linked with I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 21 search and requisition under Sections 132 and 132A of the Act, it is apparent that: (a) the assessments or reassessments, which stand abated in terms of II proviso to Section 153A of the Act, the AO acts under his original jurisdiction, for which, assessments have to be made; (b) regarding other cases, the addition to the income that has already been assessed, the assessment will be made on the basis of incriminating material and (c) in absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. Though such a claim by the assessee for the first time under Section 153A of the Act is not completed, the case in hand, has to be considered at best similar to a case where in spite of a search and/or requisition, nothing incriminating is found. In such a case though Section 153A of the Act would be triggered and assessment or reassessment to ascertain the total income of the person is required to be done, however, the same would in that case not result in any addition and the assessments passed earlier may have to be reiterated. The reliance placed by the counsel for the appellant on the case of Anil Kumar Bhatia (supra) also does not help the case of the assessee. The relevant extract of the said judgment reads as under:- “19. Under the provisions of Section 153A, as we have already noticed, the Assessing Officer is bound to issue notice to the assessee to furnish returns for each assessment year falling within the six assessment years immediately preceding the assessment year relevant to the previous year in which the search or requisition was made. Another significant feature of this Section is that the Assessing Officer is empowered to assess or reassess the “total income” of the aforesaid years. This is a significant departure from the earlier block assessment scheme in which the block assessment roped in only the undisclosed income and the regular assessment proceedings were preserved, resulting in multiple assessments. Under Section 153A, however, the Assessing Officer has been given the power to assess or reassess the 'total income' of the six assessment years in question in separate assessment orders. This means that there can be only one assessment order in respect of each of the six assessment years, in which both the disclosed and the undisclosed income would be brought to tax. 20. A question may arise as to how this is sought to be achieved where an assessment order had already been passed in respect of all or any of those six assessment years, either under Section 143(1)(a) or Section 143(3) of the Act. If such an order is already in existence, having obviously been passed prior to the I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 22 initiation of the search/requisition,the Assessing Officeris empowered to reopen those proceedings and reassess the total income, taking note to theundisclosed income, if any, unearthed during thesearch.For this purpose, the fetters imposed upon the Assessing Officer by the strict procedure to assume jurisdiction to reopen the assessment under Sections 147 and 148, have been removed by the non obstante clause with which sub section (1) of Section 153A opens. The time- limit within which the notice under Section 148 can be issued, as provided in Section 149 has also been made inapplicable by the non obstante clause. Section 151 which requires sanction to be obtained by the Assessing Officer by issue of notice to reopen the assessment under Section 148 has also been excluded in a case covered by Section 153A. The time-limit prescribed for completion of an assessment or reassessment by Section 153 has also been done away with in a case covered by Section 153A. With all the stops having been pulled out, the Assessing Officer under Section 153A has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered by Section 153A, by even making reassessments without any fetters, if need be. 21. Now there can be cases where at the time when the search is initiated or requisition is made, the assessment or reassessment proceedings relating to any assessment year falling within the period of the six assessment years mentioned above, may be pending. In such a case, the second proviso to sub section (1) of Section 153A says that such proceedings “shall abate”. The reason is not far to seek. Under Section 153A, there is no room for multiple assessment orders in respect of any of the six assessment years under consideration. That is because the Assessing Officer has to determine not merely the undisclosed income of the assessee, but also the 'total income' of the assessee in whose case a search or requisition has been initiated. Obviously there cannot be several orders for the same assessment year determining the total income of the assessee. In order to ensure this state of affairs namely, that in respect of the six assessment years preceding the assessment year relevant to the year in which the search took place there is only one determination of the total income, it has been provided in the second proviso of sub Section (1) of Section 153A that any proceedings for assessment or reassessment of the assessee which are pending on the date of initiation of the search or making requisition “shall abate”. Once those proceedings abate, the decks are cleared, for the Assessing Officer to pass assessment orders for each of those six years determining the total income of the assessee which would include both the income declared in the returns, if any, furnished by the assessee as well as the undisclosed income, if any, unearthed during the search or requisition. The position thus emerging is that the search is initiated or requisition is made, they will abate making way for the Assessing Officer to determine the total income of the assessee in which the undisclosed income would also be included, but in case where the assessment or reassessment proceedings have already been completed and assessment orders I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 23 have been passed determining the assessee's total income and such orders subsisting at the time when the search or the requisition is made, there is no question of any abatement since no proceedings are pending. In this latter situation, the Assessing Officer will reopen the assessments or reassessments already made (without having the need to follow the strict provisions or complying with the strict conditions of Sections 147, 148 and 151) and determine the total income of the assessee.Such determination in the orders passed under Section 153A would be similar to the orders passed in any reassessment, where the total incomedetermined in the original assessment order and theincome that escaped assessment are clubbed togetherand assessed as the total income.In such a case, to reiterate, there is no question of any abatement of the earlier proceedings for the simple reason that no proceedings for assessment or reassessment were pending since they had already culminated in assessment or reassessment orders when the search was initiated or the requisition was made.” (emphasis supplied) The said judgment also in no uncertain terms holds that the reassessment of the total income of the completed assessments have to be made taking note of the undisclosed income, if any, unearthed during the search and the income that escaped assessments are required to be clubbed together with the total income determined in the original assessment and assessed as the total income. The observations made in the judgment contrasting the provisions of determination of undisclosed income under Chapter XIVB with determination of total income under Sections 153A to 153C of the Act have to be read in the context of second proviso only, which deals with the pending assessment/reassessment proceedings. The further observations made in the context of de novo assessment proceedings also have to be read in context that irrespective of the fact whether any incriminating material is found during the course of search, the notice and consequential assessment under Section 153A have to be undertaken. The argument of the learned counsel that the AO is also free to disturb income, expenditure or deduction de hors the incriminating material, while making assessment under Section 153A of the Act is also not borne out from the scheme of the said provision which as noticed above is essentially in context of search and/or requisition. The provisions of Sections 153A to 153C cannot be interpreted to be a further innings for the AO and/or assessee beyond provisions of Sections 139 (return of income), 139(5) (revised return of income), 147 (income escaping assessment) and 263 (revision of orders) of the Act. The plea raised on behalf of the assessee that as the first proviso provides for assessment or reassessment of the total income in respect of each assessment I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 24 year falling within the six assessment years, is merely reading the said provision in isolation and not in the context of the entire section. The words 'assess' or 'reassess' have been used at more than one place in the Section and a harmonious construction of the entire provision would lead to an irresistible conclusion that the word 'assess' has been used in the context of an abated proceedings and reassess has been used for completed assessment proceedings, which would not abate as they are not pending on the date of initiation of the search or making of requisition and which would also necessarily support the interpretation that for the completed assessments, the same can be tinkered only based on the incriminating material found during the course of search or requisition of documents. The Allahabad High Court in Commissioner of Income-tax (Central, Kanpur v. Smt. Shaila Agarwal (supra) has held as under:- “19. The second proviso to Section 153A of the Act, refers to abatement of the pending assessment or re- assessment proceedings. The word 'pending' does not operate any such interpretation, that wherever the appeal against such assessment or reassessment is pending, the same alongwith assessment or reassessment proceedings is liable to be abated. The principles of interpretation of taxing statutes do not permit the Court to interpret the Second Proviso to Section 153A in a manner that where the assessment or reassessment proceedings are complete, and the matter is pending in appeal in the Tribunal, the entire proceedings will abate. 20. There is another aspect to the matter, namely that the abatement of any proceedings has serious causes and effect in as much as the abatement of the proceedings, takes away all the consequences that arise thereafter. In the present case after deducting bogus gifts in the regular assessment proceedings, the proceedings for penalty were drawn under Section 271 (1)(c) of the Act.The material found in the search maybe a ground for notice and assessment under Section 153A of the Act but that would not efface or terminateall the consequence, which has arisen out of the regular assessment or reassessment resulting into the demand or proceedings of penalty.” (emphasis supplied) The said judgment which essentially deals with second proviso to Section 153A of the Act also supports the conclusion, which we have reached hereinbefore. It has been observed by the Hon'ble Supreme Court in K.P. Varghese v. Income Tax Officer : (1981) 131 ITR 597 that “it is well recognized rule of construction that a statutory provision must be so construed, if possible that absurdity and mischief may be avoided.” I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 25 The argument of the counsel for the appellant if taken to its logical end would mean that even in cases where the appeal arising out of the completed assessment has been decided by the CIT(A), ITAT and the High Court, on a notice issued under Section 153A of the Act, the AO would have power to undo what has been concluded upto the High Court. Any interpretation which leads to such conclusion has to be repelled and/or avoided as held by the Hon'ble Supreme Court in the case of K.P. Varghese (supra). Consequently, it is held that it is not open for the assessee to seek deduction or claim expenditure which has not been claimed in the original assessment, which assessment already stands completed, only because a assessment under Section 153A of the Act in pursuance of search or requisition is required to be made. 26. In the case of Shirke Constructions (supra) the facts before the Hon’ble Bombay High court was regarding a new claim made in return filed u/s 153A of the Act in the year in which search was conducted and where the assessment proceedings stood abated. In this backdrop the Hon’ble high court held it was this return filed u/s 153A of the Act which would be assessed for the first time, and that the assessee therefore was eligible to make a fresh claim and the return filed u/s 153A of the Act be treated as filed u/s 139 of the Act. The relevant findings of the Hon’ble High Court are as under: 11. In the present facts for the subject assessment years it is an undisputed position that the pending assessment before the Assessing Officer consequent to return filed under Section 139(1) of the Act for the subject Assessment years had abated. This was on account of the search and as provided in second proviso to Section 153A(1) of the Act. The consequence of notice under Section 153A(1) of the Act is that assessee is required to furnish fresh return of income for each of the six assessment years in regard to which a notice has been issued. It is this return which is filed consequent to the notice which would be subject of assessement by the Revenue for the first time in the case of abated assessment proceedings. Consequent to notice under Section 153A of the Act the earlier return filed for the purpose of assessment which is pending, would be treated as non est in law. Further, Section 153A(1) of the Act itself provides on filing of the return consequent to notice, the provision of the Act will apply to the return of income so filed. Consequently, the return filed under Section 153A(1) of the Act is a return furnished under Section 139 of the Act. Consequently, the respondent- assessee is being assessed in respect of abated assessment for the first time I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 26 under the Act. Therefore the provisions of the Act which would be otherwise applicable in case of return filed in the regular course under Section 139(1) of the Act would also continue to apply in case of return filed under Section 153A of the Act and the case laws on the provision of the Act would equally apply. 27. The upshot of the proposition laid down in the said decisions we find is complementary, to the effect that: a) where returns filed u/s 153A of the Act related to years in which assessment stood completed, the only scope of assessment was limited to making addition on account of incriminating material and in its absence reiterating the assessments. That therefore no fresh claims/allowances could be entertained in returns filed u/s 153A of the Act in such cases. ( Jai Steel (supra)), while b) Where returns filed u/s 153A of the Act related to years where assessment stood abated , the entire assessment was open and hence fresh claims of allowances/deduction could be made in returns filed u/s 153A of the Act in such cases treating them as returns filed u/s 139 of the Act for allowance of.( Shirke construction(supra), 28. Having said so we find that in the facts of the present case, the assessments were not abated, and the claim of business losses admittedly emanated from incriminating material i.e the foreign bank account of the assessee. Income from incriminating material is to be considered after defraying all expenses that are incurred for earning such income. The decision of the Hon’ble apex court in the case of CIT vs Piara Singh 124 ITR 40(SC) is relevant for the same. The business losses therefore qualified as being in the nature of Income from incriminating material required to be assessed to tax in such cases. There is no provision of law, pointed out to us, debarring claim of expenses or losses emanating from incriminating material. To put it otherwise, there is no provision of law requiring only positive incomes emanating from incriminating material to be disclosed/added to the incomes of the assessee in assessment framed u/s 153A of the Act denying claim of expenses and losses emanating therefrom. The legislature, we are aware has debarred claim of I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 27 losses/expenses against incomes assessed u/s 68/69/69A /69B/69C of the Act specifically so providing u/s 115BBE of the Act, which provides for levy of taxes at special rates on such incomes. SECTION 115BBE. Tax on income referred to in section 68 or section 69 or section 69A or section 69B or section 69C or section 69D. 3613 [ 3614 [(1) Where the total income of an assessee,- (a) includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D and reflected in the return of income furnished under section 139; or (b) determined by the Assessing Officer includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or 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 referred to in clause (a) and clause (b), at the rate of sixty per cent.; and (ii) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (i).] (2) Notwithstanding anything contained in this Act, no deduction in respect of any expenditure or allowance 3615 [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) 3616 [and clause (b)] of sub-section (1).] 29. The returns filed u/s 153A of the Act disclosing losses emanating from incriminating material is therefore as per law to be treated as filed in returns u/s 139 of the Act and entitled to be set off against profits from such incriminating material in subsequent years. And to this extent of set off, they certainly do not qualify as fresh claim made in return filed u/s 153A of the Act, since they were necessarily to be disclosed at the same time and alongwith the positive incomes arising from the incriminating material. These losses cannot be considered in isolation from the I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 28 profits to qualify as” fresh claim”, not originally claimed in the return filed u/s 139 of the Act. 30. We may clarify that set off of these business losses from any other income originally returned, other than profits from this business, would have qualified as a fresh claim and to which the assessee would not be entitled. The proceedings u/s 153A of the Act, being in consequence to search undertaken u/s 132 of the Act, cannot be utilized by the assessee to seek relief not claimed earlier. The proceedings are analogous to proceedings u/s 147 of the Act, as being for the benefit of the Revenue and not the assessee.The decision of the Hon’ble apex court in the case of CIT vs Sun Engineering Works Pvt. Ltd. (1992) 198 ITR 297 (SC) is relevant for the purpose. 31. Having held so, that the claim of losses emanating from incriminating material, made in returns filed u/s 153A of the Act are to be treated as filed u/s 139 of the Act and noting that the said returns undisputedly were filed within the stipulated time, the assessee, we hold, was entitled to the benefit of carry forward and set off of the same in subsequent years, as per law. The findings of the Ld.CIT(A) in this regard are also upheld. 32. The order of the Ld.CIT(A) deleting the disallowance of losses and their carry forward and set off ,in the assessment years before us, is therefore upheld. Ground of appeal No.1 of the Revenue is dismissed. 33. Vis-à-vis the addition relating to the cash credits in the bank account of the assessee deleted by the ld. CIT(A) raised in ground no. 2 above, the contention of the ld. D.R. before us, relying on the order of the A.O. was to the effect that the assessee was unable to satisfactorily explain certain credits therein received from the bank account of one Mr. Satish Sawhney who was also searched as under: I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 29 Sr. No Date Amount in $ Bank Account number held in Merill Lynch Name of the company - 1 14/10/2010 2,10,000 1CA03685 Pinky Ltd 2 03/12/2010 1,00,000 1CA03685 Pinky Ltd 3 21/04/2011 1,48,950 1CA03685 Pinky Ltd 4 21/04/2011 16,550 1CA03685 Pinky Ltd 5 12/05/201'! 65,000 1CA03685 Pinky Ltd Total 5, 40.500/- 33.1 That his explanation of the entries having been fraudulently made was without any basis or evidence and that the assessee was also unable to explain an entry of 50,000/-$ on 25.06.2010 in the said bank account of Pinky Ltd. merely stating that he had no knowledge of the said entry and this entry was fraudulently passed. That the AO therefore had rightly held that the calculation of income submitted by the assessee with respect to the said foreign bank account could not be relied upon as it was an after thought and therefore the entire credits in the bank account relating to the impugned years was rightly made as under: A .Y 2009-10 Rs.30,80,31,610/- A.Y 2010-11 Rs.15,04,94,322/- A.Y 2011-12 Rs.27,02,68,615/- A.Y 2012-13 Rs.16,57,62,670/- A.Y 2013-14 Rs.64,56,398/- A.Y 2014-15 Rs.66,50,702/- 34. The ld. Counsel for the assessee on the other hand relied on the submissions made by him before the ld. CIT(A) reproduced at para 3.6.1 to 3.6.5 of the order and the findings of the Ld. CIT(A) at para 3.9.1 to 3.9.5 of the order is as under: I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 30 3.6,1 The Appellant during the course of the assessment submitted all the details pertaining to the credit entries in the foreign bank account, The Appellant explained completely the basis of computation of the income from foreign bank account and got the said computation verified with respect to the following: i) Bank Statements of the said Bank Accounts; ii) Portfolio Statements included as part of the Bank Statements of the said Bank Accoimts; iii) Computation of gains/losses computed on account of securities transactions as stated in the said Bank Statements; iv) Items of income in the form of Dividends, Interest or Distribution as disclosed in the said Bank Statements; v) Linking the said credits in the said Bank Accounts with the amount calculated for filing the Declaration; vi) Explaining the provisions of the Black Money Act, 2015Black Money Rules and various clarifications and circulars issued by the Board in connection with filing of declaration and computation of income for the period subsequent to the period to which the Declaration pertained, vii) Reconciling completely the amounts in the Bank Statements with the computation made by the Appellant for declaring income/loss for the year under consideration; viii) Giving evidences including the evidences of subsequent recovering of the sum for the incorrect credits in the said Bank Accounts. 3.6.2 Further, the Appellant also submitted a complete list of credits for each year and also submitted the computation of the business income after incorporating the foreign bank credits. Refer Pg. No. FBA 11-12, wherein the Appellant has submitted the computation of income outside India and has also submitted the summary of list of credits in the foreign bank accounts. On Pg. No. FBA 13-68, each and every individual credit item has been explained by the Appellant. The AO has not found any discrepancy in the details furnished by the Appellant, The AO on the basis of irrelevant observations has rejected the detailed submission of the Appellant. The AO, merely on the basis of the presumptions, made addition u/s 68 of the Act, 363 In respect of the entry of $540,500, it is submitted that the credit entries were incorrectly credited in the account of the Appellant. The incorrect credit I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 31 entries which could have been possibly fraudulent, entries in the account of the Appellant, were reversed by the Bank in the month of May 2016, Copy of the bank statement foi May 2016 has been attached on Pg. No. FBA 88-111. On perusal of Pg, No, FBA 105, amount of $525,094 has been reversed by passing a journal entry 385 "Policy Settlement". We submit that these facts were submitted to the AO, Refer Pg, No. FBA 87, The AO held that the explanation provided by the Appellant as to credit of $540,500 in the bank account, is an afterthought and hence the entire submission of the Appellant cannot be relied upon, Appreciate that the AO has not found any fault or discrepancy in the explanation provided by the Appellant. Further, there is no finding by the AO that the Appellant's explanation is not satisfactory. The AO has not controverted the explanation provided by the Appellant. The AO has wrongly made an addition of all credits in the bank account merely on the basis of an entry of $540,500. 3.6.4 Attention is invited to Pg. No. GEN 7-12 (of the General Paperbook), wherein the Appellant has submitted the revised return of income along with the computation of income. On perusal of Pg. No. GEN 9, it will be noticed that the Appellant has offered to tax Rs.89,00,144/- as business income earned from outside India. The computation of Rs.89,00,144/- has been given on Pg. No. FBA 11, On the perusal of the said details, it will be noticed that the Appellant has already offered to tax the income arising to the Appellant from outside India in the return filed on 02-03-2016. Since the income is already a part of the total income of the Appellant, the provisions of section 68 cannot be made applicable to the case of the Appellant. 3.6.5 Appreciate that the purpose of section 68 is to tax the credit items which have escaped taxation. For example, credits in the balance sheet in the form of unsecured loan, which does not form part of the total income, is required to be explained u/s 68. If such credit items are not explained by the Assessee, addition can be made u/s 68 of the Act. In case of the Appellant, the credit in the foreign bank account is already a part of the total income of the Appellant for the year under consideration (Pg. No. GEN 9). The Appellant has already offered the income earned outside India to tax in the return filed on 02-03-2016. Since the income is already subject to tax, provisions of section 68 cannot be made applicable to the case of the Appellant. 3.9.1 I have perused the assessment order and considered the appellants’ submission. It is noted that during the course of search the Department made enquiries in respect of a foreign bank account maintained in the name of M/s. Pinky Limited. As per the appellant no document or paper was found during the course of search or in post search enquiries. Subsequent to the search I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 32 the Appellant Money (Undisclosed Foreign Income and foreign Asset) and Imposition of Taxes Act, 2015 (in short, the Black Money Act) and made the disclosure for the years prior to A.Y, 2009-10 with respect to the said bank account before the Department as per the provisions of section 59 of the Black Money Act and various circulars issued by the Government, as no disclosure of the said bank account could have been done with respect to A.Y, 2009-10 to A.Y.2015-16 - the years for which the notice u/s. 153A has been or could have been issued consequent upon search, After disclosure of foreign income and assets prior to A.Y.2009-10 under the Black Money Act, the Appellant. has calculated income from the transactions reflected in the said bank account for the later period and income of the respective period was disclosed by the Assessee in the respective A.Ys. - A.Y. 2009-10 to A.Y.2015-16. The brief particulars of the income/loss disclosed in the respective years are as per the table below: Particular s FINANCIAL YEAR 20O8-09 20O9-10 2010-11 2011-12 2012-13 2013-14 2014-15 Income in $ 47,93,285 18,80,200 44,11,140 26,08,475 91,397 1,10,589 2,22,660 Expenditur e in $ 62,74,229 20,05,830 42,19,642 23,49,947 50,886 44,412 80,464 Profit in $ (-) 14,80,944 (-) 1,25,630 1,91,497 2,58,528 40,511 66,177 1,42,196 Profit in INK (-) 7,54,54,929 H 56,61,568 85,47,110 1,32,25,391 22,03,373 39,77,251 89,00,144 3.9.2 The Ld. ARs have filed a submission in the dak on 11/12/2017 enclosing the copies of the assessment orders u/s 147 r.w.s. 143(3) of the Act for the A.Yrs. from 1998-99 to 2008-09 which were re-opened on account of unexplained credits in the foreign bank account with Merrill Lynch Bank standing in the name of M/s. Pinky Ltd. For the purpose, the Department had obtained the statements of the bank account through the FT & TR Division of CBDT, New Delhi and taken cognizance of the foreign bank account of Shri Satish Sawhney (standing in the name of M/s. Prime Trade Ltd.). From the re-assessment orders for A.Yrs. from 1998-99 to 2008-09, it is seen that the submissions of the assessee are in line with the submission made during the assessment proceedings u/s 153A for the A.Yrs. 2008-09 to 2015-16 and that AO, after examining the facts in the case and the submission of the assessee, has accepted that the assessee has offered bank credits in I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 33 foreign bank bank, account for taxation in the Black Money Act and has accepted the returned incomes of the assessee for the A, Yrs 1 998-99 to 2008-09 with the remarks that if anything contrary to facts or any adverse information is received against the assesses in future, suitable action under the relevant provision of the IT Act may be taken against tne assesses. Based on these, the Ld. AR in the submission filed on 11/12/2017 has asserted that "the AO has accepted the correctness of the computation of declaration based on the foreign bank account statements and portfolio statements and therefore, there is no reason why the income computed by the appellant for the A. Yrs.2009-10 to 2015-16 which are pending [in appeal before the CTT(A) should not be accepted......... and accordingly no further addition needs to be made on the same..........We request your kind office to delete the addition(s) made by the AO. Thus there remains no doubt that the disclosure of receipts and computation of income & loss on account of the foreign bank account and investments through that account for the A.Y. 2009-10 to A.Y.2015-16 are correct on facts and computations. 3.9.3 The common submission of the appellant in context of addition made on account of unexplained credit entries in the foreign bank account with M/s. Merrill Lynch Bank, NY in the name of M/s. Pinky Ltd. has been considered diligently. In total 5 entries - 2 entries aggregating to US $310,000 for F.Y.2010-11 and 3 entries aggregating to US $230,000 for A.Y.2011-12 were identified by the AO and they were found made from M/s. Prime Trade Ltd. of one Shri Satish Sawhney of Sainik Farm, Delhi. Neither the appellant nor Shri Satish Sawhney (who also was searched separately) explained the transactions and the connections among them. Only contention supported by proof from the appellant is that these entries might be fraudulent and that the Bank had subsequently reversed the entries to the extent of US $525,094. As the appellant could not explain the source of this amount also and did not file any evidence in support of his claim of fraudulent entries passed through the account of Pinky Ltd., the AO held that calculation of income on account of the foreign bank account given by the assessee for the year under consideration could not be relied upon particularly in view of the fact that the assessee had failed to give any documentary proof to explain the source of credit entries in the said bank account and therefore the entire credit in the bank account during the year under consideration aggregating to Rs.30,80,31,610/- (6045762.72*50.95, the rate of $ as on 31/03/2009) was added to the total income of the assessee as unexplained credits in the bank accounts of the assessee u/s 68 of the income Tax Act. 3.9.4 I find that the A.O. has acted on his surmises without appreciating the submission and explanation of the appellant. First error of the AO is to ignore that the credits in the bank account qualifying as business receipt is already offered as part of Profit & Loss from the investments/transactions through the account. This has led to the double taxation of the amount qualifying as gross business receipts. Secondly, the adverse I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 34 inference on credits in the account ignoring altogether the debits in the same account cannot be held tenable. Thirdly, the AO is willing to draw adverse inference on credits in the hands of the appellant but is not accepting the business loss being not in the hands of the appellant. I find that the submission of the appellant is acceptable and the AO has failed to appreciate the facts of the case and the law in this regard. The summary addition of entire amount of Rs.30,80,31,610/- on account of unexplained credits cannot be sustained fully, as it is, per se. The reconciliation thereof by the appellant has to be examined. 3.9.5 In the context of foreign Bank account it is seen that gross business receipt comprising of sale of securities, dividend income, distribution from funds, income cash in lieu, interest income and gain on sale of securities is $47,93,285 gainst which out go of $62,74,229 has been claimed leading to Ioss of $ l4,80,944 (Rs.7,54,54,929/-). This gross receipt $47,93,285 offered to tax is part of total credit of $222,685.14 computed by the AO for the purpose of addition u/sQ68.) Thus it is evident that the disallowance of loss and the addition of all credits u/s 68 has lead to double taxation of the amount of $47.93,285 which is not at all permissible. Further the appellant has reconciled the gross receipt $47,93,285 as part of profit and loss on account of foreign bank account and total credit of $222,685.14 adopted by the AO for the purpose of section 68. It has been further clarified by the appellant that $2,03,092 shown in the reconciliation as "sales credited in bank but not in transaction summary and offered under Black Money Act". It has been further explained that the appellant has excluded these credits (F.Y.2008-09 & 2009-10) on account of the fact that the said investments were made prior to 01/04/2008. It has been pointed out that the appellant had made declaration u/s 59 of the Black Money Act and disclosed therein all the investments held as on 31/03/2008 including the investment concerned (circular No. 13 of 2015 dated 06/07/2015) and that as per provisions of section 64 of the Black Money Act it is explicitly provided that once the investment declared u/s 59 of the Black Money Act, to the extent of value of security already offered under the Black Money Act and credited during the period under consideration, such credits are required to be deducted from the impugned additions made on accounts of unexplained credit u/s. 68 of the Income Tax Act, Further the difference of $742 may be attributable to the fact that the totaling of all credits in the account for the A.Y. 2009-10 by the AO. (which is not before the appellant) may have arithmetical error or some other error and this small difference may also otherwise be ignored. However, for the comprehensiveness the AO is directed to recheck the totaling of credits as adopted in the assessment order and the reconciliation submitted by the appellant and if he is not satisfied with the explanation/reconciliation submitted by the Appellant, he may add Rs.37,805/- (742* 50.95 the rate of dollar as on 31,03.2009) or any other amount as arrived out now by him. In view of the fact that the appellant has explained and reconciled the credits in the foreign Bank account during the year, there remains no case of unexplained credit(s) and therefore no case of any I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 35 addition u/s 68 or 69A as the case may be except.to the extent indicated before^ Therefore, the AO is directed to either delete the addition 6fRsT30.80,31,610/- or restrict the addition to Rs.37.805/- or such other amount based on any deficiency in appellant's reconciliation, as the case may be. The appeal succeeds partly on this ground. 35. We have heard both the parties. We see no reason to interfere in the order of the Ld.CIT(A) deleting the addition on account of credits in the foreign bank account of the assessee. The assessee, we have noted from the order of the Ld.CIT(A) ,filed all explanations regarding the credits in the bank account which were noted by the Ld.CIT(A) as relating to transactions in securities, dividend income, interest, distribution etc . The assessee also filed portfolio statements and calculation of profits and reconciled the figures in the bank statement with the profits /losses computed and returned in the income filed by the assessee u/s 153A of the Act. The assessee also filed evidences showing declaration of certain credits in the bank account, under the Black Money Act as also evidences of certain credits wrongly given being reversed subsequently by the Bank. Each and every entry was so explained by the assessee as having been duly accounted for and returned as business income or disclosed under the Black Money Act or wrongly credited and thus subsequently reversed by the Bank. After thoroughly examining these evidences and reconciliations, the Ld.CIT(A) has accepted the plea of the assessee that the said entries could not be taxed as unexplained ,having been returned as business income or explained otherwise. All these evidences were also filed before us in voluminous paper book. The Ld.DR was unable to point out any infirmity in the finding of the Ld.CIT(A) . He was unable to point out any credit entry wrongly accepted by the Ld.CIT(A) as duly explained. 36. In view of the same therefore we see no merit in the ground raised by the Revenue for treating the impugned credits as unexplained and thus taxable u/s 68 of the Act in all the years before us. I.T(SS)A No. 88 to 92/Ahd/2018 A.Y. 2009-10 to 14-15 Page No DCIT vs. Shri Rakesh S. Agrawal 36 37. Ground of appeal No.2, is also dismissed. 38. In effect all the appeals of the Revenue are dismissed. Order pronounced in the open court on 22-04-2022 Sd/- Sd/- (TR SENTHIL KUMAR) (ANNAPURNA GUPTA) JUDICIAL MEMBER True Copy ACCOUNTANT MEMBER Ahmedabad : Dated 22/04/2022 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद