INCOME TAX ACT, 1961

Section 260A

Appeal (High Court) - Applicability of section 115BBE - Unexplained expenditure -

The question which was required to be decided by the Tribunal was with regard to the applicability of section 115BBE which came into effect from 1-4-2017. From reading of the order passed by the Tribunal, it was found that Tribunal proceeded to consider the expenditure incurred by assessee, which was claimed to have been recorded in the books of account. Tribunal held that when the expenditure was recorded in the books of account, maintained in the course of regular business, it cannot be said that the assessee could not explain the source of income for meeting such expenditure. According to assessee, this provision was introduced with effect from 1-4-2017 and therefore, not applicable to the assessment year under consideration. It was the contention of Revenue that the said provision being clarificatory would be retrospective. Held: Assessment was reopened solely on the ground that section 115BBE having been brought into the statute book, the expenditure under section 115BBE., etc., should be assessed separately. Assessee referred to a decision rendered by this court in CIT v. Chensing Ventures (2007) 291 ITR 258 (Mad) : 2007 TaxPub(DT) 1146 (Mad-HC), wherein, the loss sustained by assessee, in any year under the heads of income was permitted as set off against income under any other head. After elaborately hearing the parties, the matter required reconsideration by the Tribunal for the reasons, which were indicated in this judgment. Furthermore, CBDT issued Circular No. 11 of 2019, dated 19-6-2019 which also needed to be looked into. Therefore, matter was remanded back to the Tribunal for fresh consideration.

REFERRED : CIT v. Chensing Ventures (2007) 291 ITR 258 (Mad) : 2007 TaxPub(DT) 1146 (Mad-HC) and CIT v. Shilpa Dyeing and Printing Mills (P) Ltd. (2013) 39 taxmann.com 3 (Guj) : 2014 TaxPub(DT) 0164 (Guj-HC).

FAVOUR : Matter remanded

A.Y. : 2008-09

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