Is there anything from the Board itself I can put in front of the officer on setting off losses against s.68 or s.69 additions in an old year?
Yes. Circular No. 11 of 2019 records the Board's view that an assessee is entitled to claim set-off of loss against income determined under s.115BBE up to assessment year 2016-17. It is the department's own instruction, so an Assessing Officer cannot take a contrary view for those years — and by the same document, the position from assessment year 2017-18 is that the set-off is denied.
Decided by the CBDT Circulars & Instructions (Central Board of Direct Taxes, Department of Revenue, Ministry of Finance; signed by Rajarajeswari R., Under Secretary (ITA.II)) on 2019-06-19, reported as Circular No. 11/2019, F.No.225/45/2019-ITA.II, dated 19 June 2019. It bears on section 115BBE, section 68, section 69, section 69A, section 69B, section 69C, section 69D, section 72 of the Income Tax Act 1961, in Cash Credits & Unexplained Money and Assessment & Scrutiny matters.
For years up to 2016-17 this saves the argument entirely: a Board circular that is favourable to the assessee binds the officer, so the point does not have to be won on case law or carried through appeal. It also does the opposite job — it is the clearest short statement, from the revenue side, of the date on which the set-off route closed, which is what a practitioner needs when checking whether an older authority such as CIT v. Chensing Ventures still helps. The Board reached its position by reference to its own earlier Circular No. 3 of 2017, which had acknowledged that the pre-amendment provision did not clearly prohibit set-off and that this was why the 2016 amendment was made. The circular's language on what is to happen next is soft — pending assessments and litigation 'may be handled accordingly' — so it does not in terms direct that departmental appeals be withdrawn.
Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them.
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Section 115BBE(2), as amended by the Finance Act, 2016 with effect from 1 April 2017, provides that 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 the Act in computing income referred to in sub-section (1), that is income of the nature described in ss.68, 69, 69A, 69B, 69C and 69D. The Board recorded that in assessments for years prior to 2017-18 Assessing Officers had taken conflicting approaches, some allowing and some disallowing set-off of loss against such income, and that guidance was needed. It noted that its own Circular No. 3 of 2017, the explanatory notes to the Finance Act, 2016, had acknowledged the uncertainty on the question and had recorded that the pre-amendment provision did not clearly prohibit the set-off, which was the reason for the amendment.
The Board took the view that an assessee is entitled to claim set-off of loss against income determined under s.115BBE of the Act till the assessment year 2016-17. Field authorities were directed to circulate the contents widely for the information of all stakeholders and departmental officers, and it was stated that pending assessments and litigation may be handled accordingly.
The Board's route was the legislative history of its own making. Paragraph 1 sets out the statutory position from 1 April 2017. Paragraph 2 records the divergent practice in earlier years. Paragraph 3 relies on Circular No. 3 of 2017 to establish that the pre-amendment text was not clear on the point, which is why the amendment was enacted. Paragraph 4 draws the conclusion that follows: if the bar was introduced only in 2016 to remove an uncertainty, then for years before it the set-off is available, and the entitlement runs till assessment year 2016-17. Paragraph 5 directs circulation and says pending matters may be handled accordingly, and paragraph 6 records that the Hindi version will follow.
an assessee is entitled to claim set-off of loss against income determined under section 115BBE of the Act till the assessment year 2016-17
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Handle my notice → Ask a CA on WhatsAppYes. Circular No. 11 of 2019 records the Board's view that an assessee is entitled to claim set-off of loss against income determined under s.115BBE up to assessment year 2016-17. It is the department's own instruction, so an Assessing Officer cannot take a contrary view for those years — and by the same document, the position from assessment year 2017-18 is that the set-off is denied. This was decided by the CBDT Circulars & Instructions (Central Board of Direct Taxes, Department of Revenue, Ministry of Finance; signed by Rajarajeswari R., Under Secretary (ITA.II)) and bears on section 115BBE, section 68, section 69, section 69A, section 69B, section 69C, section 69D, section 72 of the Income Tax Act 1961. It is reported as Circular No. 11/2019, F.No.225/45/2019-ITA.II, dated 19 June 2019. For years up to 2016-17 this saves the argument entirely: a Board circular that is favourable to the assessee binds the officer, so the point does not have to be won on case law or carried through appeal. It also does the opposite job — it is the clearest short statement, from the revenue side, of the date on which the set-off route closed, which is what a practitioner needs when checking whether an older authority such as CIT v. Chensing Ventures still helps. The Board reached its position by reference to its own earlier Circular No. 3 of 2017, which had acknowledged that the pre-amendment provision did not clearly prohibit set-off and that this was why the 2016 amendment was made. The circular's language on what is to happen next is soft — pending assessments and litigation 'may be handled accordingly' — so it does not in terms direct that departmental appeals be withdrawn. If it applies to you, the first step is this: For any assessment year up to 2016-17, quote the circular by number, F.No. and date in the reply and ask the officer to apply it; a circular favourable to the assessee is binding on the department.
Section 115BBE(2), as amended by the Finance Act, 2016 with effect from 1 April 2017, provides that 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 the Act in computing income referred to in sub-section (1), that is income of the nature described in ss.68, 69, 69A, 69B, 69C and 69D. The Board recorded that in assessments for years prior to 2017-18 Assessing Officers had taken conflicting approaches, some allowing and some disallowing set-off of loss against such income, and that guidance was needed. It noted that its own Circular No. 3 of 2017, the explanatory notes to the Finance Act, 2016, had acknowledged the uncertainty on the question and had recorded that the pre-amendment provision did not clearly prohibit the set-off, which was the reason for the amendment. The matter was decided on 2019-06-19 by the CBDT Circulars & Instructions (Central Board of Direct Taxes, Department of Revenue, Ministry of Finance; signed by Rajarajeswari R., Under Secretary (ITA.II)). On those facts the CBDT Circulars & Instructions held as follows. The Board took the view that an assessee is entitled to claim set-off of loss against income determined under s.115BBE of the Act till the assessment year 2016-17. Field authorities were directed to circulate the contents widely for the information of all stakeholders and departmental officers, and it was stated that pending assessments and litigation may be handled accordingly.
The Board's route was the legislative history of its own making. Paragraph 1 sets out the statutory position from 1 April 2017. Paragraph 2 records the divergent practice in earlier years. Paragraph 3 relies on Circular No. 3 of 2017 to establish that the pre-amendment text was not clear on the point, which is why the amendment was enacted. Paragraph 4 draws the conclusion that follows: if the bar was introduced only in 2016 to remove an uncertainty, then for years before it the set-off is available, and the entitlement runs till assessment year 2016-17. Paragraph 5 directs circulation and says pending matters may be handled accordingly, and paragraph 6 records that the Hindi version will follow. In the words reproduced by the source cited on this page: "an assessee is entitled to claim set-off of loss against income determined under section 115BBE of the Act till the assessment year 2016-17" The decision followed or applied CBDT Circular No. 3 of 2017 (explanatory notes to the Finance Act, 2016) — relied on.
It was decided by the CBDT Circulars & Instructions on 2019-06-19 and is reported as Circular No. 11/2019, F.No.225/45/2019-ITA.II, dated 19 June 2019. Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them. A CBDT circular or instruction binds officers of the department but not the assessee and not the courts. Where a circular helps you, you may hold the department to it. Where it hurts you, it cannot override the Act or a judgment. On section 115BBE, section 68, section 69, section 69A, section 69B, section 69C, section 69D, section 72, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The Board took the view that an assessee is entitled to claim set-off of loss against income determined under s.115BBE of the Act till the assessment year 2016-17. Field authorities were directed to circulate the contents widely for the information of all stakeholders and departmental officers, and it was stated that pending assessments and litigation may be handled accordingly. It arises in Cash Credits & Unexplained Money and Assessment & Scrutiny matters, on section 115BBE, section 68, section 69, section 69A, section 69B, section 69C, section 69D, section 72 of the Income Tax Act 1961, and was decided by Central Board of Direct Taxes, Department of Revenue, Ministry of Finance; signed by Rajarajeswari R., Under Secretary (ITA.II). Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Attach it to appeal grounds as well, so the Commissioner (Appeals) or the Tribunal is not left to decide the point on case law alone. Read it together with the Board's Circular No. 3 of 2017, on which paragraph 3 relies, if the officer argues the pre-amendment provision already contained the bar. For assessment year 2017-18 onwards, treat this circular as confirming that the set-off is gone and redirect the argument to whether the addition under ss.68 to 69D is sustainable at all. Do not read the circular as a direction to withdraw pending departmental appeals; its operative words are that pending assessments and litigation may be handled accordingly.
Still good law. The circular is still published on the CBDT's own site and has been applied by the courts. The Rajasthan High Court relied on it in PCIT (Central), Jaipur v. Aacharan Enterprises Pvt. Ltd., D.B. Income Tax Appeal No. 4 of 2018, decided 21 January 2020, and the Madras High Court referred to it in CIT v. Shri Hussain Mohideen Ibrahim Sha, T.C.A. No. 722 of 2018, decided 24 June 2019, as clarifying that set-off against s.115BBE income was permissible only till assessment year 2016-17. Tribunal benches continue to quote its operative sentence, the most recent traced being decisions of 2025 and 2026. I did not search for a later circular amending, withdrawing or superseding it, and the reader should confirm that separately. The circular is self-limiting in time: it says nothing that helps for assessment year 2017-18 onwards, when s.115BBE(2) denies the set-off in terms. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Read from the CBDT's own PDF on incometaxindia.gov.in. The retrieval layer declined to reproduce the circular in full, so what is set out here is a paragraph-by-paragraph account with one verbatim quotation of the operative sentence, confirmed separately against the full-text index of judgments quoting it. The circular has six numbered paragraphs and is signed by Rajarajeswari R., Under Secretary (ITA.II). The F.No. was re-read from the PDF on verification and is F.No.225/45/2019-ITA.II. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The Board took the view that an assessee is entitled to claim set-off of loss against income determined under s.115BBE of the Act till the assessment year 2016-17. Field authorities were directed to circulate the contents widely for the information of all stakeholders and departmental officers, and it was stated that pending assessments and litigation may be handled accordingly.
TaxSphere, “CBDT Circular No. 11/2019 — set-off of loss against s.115BBE income”, https://taxnotice.vittsphere.com/caselaw/case/cbdt-circular-11-2019-115bbe-set-off-till-ay-2016-17/ (validity last checked 2026-09-07)
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A search threw up unaccounted stock and cash and the Assessing Officer has added it. I have a large brought-forward loss and unabsorbed depreciation sitting there. Can I set them off against the addition?
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