Department of Revenue clarifies on non-allowability of set-off of losses against the deemed income prior to AY 2017-18

Jun 24, 2019 | by Avantis RegTech Legal Research Team


The Department of Revenue on June 19, 2019, has clarifies the issue regarding non-allowability of set-off of losses against the deemed income under Section 115BBE which specifies the tax on income referred under certain Sections of the Income-tax Act, 1961 prior to assessment year (AY) 2017-18.

However, CBDT noticed that in assessments prior to AY 2017-18, while some of the Assessing Officers (AO) have allowed set off of losses against the additions made by them under Section(s) 68/69/69A/69B/69C/69D, in some cases, set off of losses against the additions made under Section 115BBE (1) of the Income-tax Act, 1961, have not been allowed.

Ø  Section 68: Cash Credit;

Ø  Section 69: Unexplained investments;

Ø  Section 69A: Unexplained money;

Ø  Section 69B: Amount of investments, etc., not fully disclosed in books of accounts;

Ø  Section 69C: Unexplained expenditure etc.;

Ø  Section 69D: Amount borrowed or repaid on hundi

Therefore, CBDT examined the issue and stated that since the term ‘or set off of any loss’ was specifically inserted only vide the Finance Act, 2016, with effect from April 01, 2017, an assessee is entitled to claim set-off of loss against income determined under Section 115BBE of the Income-tax Act, 1961 till the AY 2016-17.

[Circular No. 11/2019]

Click here to download the Circular.


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