The officer has added cash credits under s.68 and refuses to let me set my business loss against them. Can he do that for my year?
It depends entirely on the assessment year. The Rajasthan High Court held that the bar in s.115BBE(2) on setting off any loss against income referred to in ss.68 to 69D was introduced by the Finance Act, 2016 with effect from 1 April 2017 and cannot be applied retrospectively, so for assessment year 2014-15 the set-off was allowed. From assessment year 2017-18 the statute forecloses the set-off and this decision is no help to you.
Decided by the High Court (Sangeet Lodha J and Pushpendra Singh Bhati J) on 2020-01-21, reported as D.B. Income Tax Appeal No. 4 of 2018, High Court of Judicature for Rajasthan at Jodhpur. It bears on section 115BBE, section 68, section 71, section 72 of the Income Tax Act 1961, in Cash Credits & Unexplained Money and Assessment & Scrutiny matters.
This is the decision that dates the closing of a route practitioners still cite from older authority. The Madras High Court's decision in CIT v. Chensing Ventures, which allowed set-off of business loss against income assessed under s.69, was decided for assessment year 2002-03; the reasoning there was that nothing in the Act as it then stood barred the set-off. Section 115BBE(2) now supplies exactly that bar, in terms that begin 'Notwithstanding anything contained in this Act' and deny any deduction in respect of any expenditure or allowance or set off of any loss in computing income under sub-section (1). So the older line survives only for years up to 2016-17, and this judgment, with the Board's own Circular No. 11 of 2019 behind it, is what gets you the benefit for those years without a fight. For a current year the fight has to move upstream — to whether the addition under s.68 or s.69 is sustainable at all, and to whether s.115BBE applies to the item.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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For assessment year 2014-15 deemed income of Rs. 6,50,00,000 was brought to tax. The Commissioner (Appeals) held that sum chargeable to tax under the head 'Income from Other Sources', rejecting the assessee's contention that it was taxable as business income, and allowed set-off against it of a current year business loss of Rs. 3,82,37,792 and a brought-forward loss of Rs. 2,67,62,208. The Revenue's case was that s.115BBE(2), as amended by the Finance Act, 2016 to deny set-off of any loss, governed the assessment. The Tribunal dismissed the Revenue's appeal, holding that the amended provision could not apply retrospectively to assessment year 2014-15 and that the set-off was therefore permissible. The Revenue appealed to the High Court.
The Revenue's appeal was dismissed, with no order as to costs. Section 115BBE(2) as amended by the Finance Act, 2016 operates from 1 April 2017 and cannot be applied retrospectively; for assessment year 2014-15 the assessee was entitled to set off its current year and brought-forward business losses against the deemed income assessed for that year.
The Court read the provision as it stood before the amendment and found in it no prohibition against set-off of loss, so that the denial the Revenue contended for had no foothold in the text applicable to the year. It held on a bare perusal of the provisions that the amendment could not be applied retrospectively. It then relied on the Board's own position in Circular No. 11 of 2019, which records that assessments prior to assessment year 2017-18 had been handled inconsistently by Assessing Officers, that the earlier Circular No. 3 of 2017 had acknowledged the uncertainty which the amendment was intended to remove, and that an assessee is entitled to claim set-off of loss against income determined under s.115BBE up to assessment year 2016-17. The Revenue's contention could not be countenanced against the Board's own instruction and the plain prospective operation of the amendment.
A bare perusal of the provisions makes it abundantly clear that it cannot be applied retrospectively.
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Handle my notice → Ask a CA on WhatsAppIt depends entirely on the assessment year. The Rajasthan High Court held that the bar in s.115BBE(2) on setting off any loss against income referred to in ss.68 to 69D was introduced by the Finance Act, 2016 with effect from 1 April 2017 and cannot be applied retrospectively, so for assessment year 2014-15 the set-off was allowed. From assessment year 2017-18 the statute forecloses the set-off and this decision is no help to you. This was decided by the High Court (Sangeet Lodha J and Pushpendra Singh Bhati J) and bears on section 115BBE, section 68, section 71, section 72 of the Income Tax Act 1961. It is reported as D.B. Income Tax Appeal No. 4 of 2018, High Court of Judicature for Rajasthan at Jodhpur. This is the decision that dates the closing of a route practitioners still cite from older authority. The Madras High Court's decision in CIT v. Chensing Ventures, which allowed set-off of business loss against income assessed under s.69, was decided for assessment year 2002-03; the reasoning there was that nothing in the Act as it then stood barred the set-off. Section 115BBE(2) now supplies exactly that bar, in terms that begin 'Notwithstanding anything contained in this Act' and deny any deduction in respect of any expenditure or allowance or set off of any loss in computing income under sub-section (1). So the older line survives only for years up to 2016-17, and this judgment, with the Board's own Circular No. 11 of 2019 behind it, is what gets you the benefit for those years without a fight. For a current year the fight has to move upstream — to whether the addition under s.68 or s.69 is sustainable at all, and to whether s.115BBE applies to the item. If it applies to you, the first step is this: Identify the assessment year before anything else. Up to 2016-17, claim the set-off and cite this judgment together with CBDT Circular No. 11 of 2019, which binds the department. From 2017-18, do not claim it.
For assessment year 2014-15 deemed income of Rs. 6,50,00,000 was brought to tax. The Commissioner (Appeals) held that sum chargeable to tax under the head 'Income from Other Sources', rejecting the assessee's contention that it was taxable as business income, and allowed set-off against it of a current year business loss of Rs. 3,82,37,792 and a brought-forward loss of Rs. 2,67,62,208. The Revenue's case was that s.115BBE(2), as amended by the Finance Act, 2016 to deny set-off of any loss, governed the assessment. The Tribunal dismissed the Revenue's appeal, holding that the amended provision could not apply retrospectively to assessment year 2014-15 and that the set-off was therefore permissible. The Revenue appealed to the High Court. The matter was decided on 2020-01-21 by the High Court (Sangeet Lodha J and Pushpendra Singh Bhati J). On those facts the High Court held as follows. The Revenue's appeal was dismissed, with no order as to costs. Section 115BBE(2) as amended by the Finance Act, 2016 operates from 1 April 2017 and cannot be applied retrospectively; for assessment year 2014-15 the assessee was entitled to set off its current year and brought-forward business losses against the deemed income assessed for that year.
The Court read the provision as it stood before the amendment and found in it no prohibition against set-off of loss, so that the denial the Revenue contended for had no foothold in the text applicable to the year. It held on a bare perusal of the provisions that the amendment could not be applied retrospectively. It then relied on the Board's own position in Circular No. 11 of 2019, which records that assessments prior to assessment year 2017-18 had been handled inconsistently by Assessing Officers, that the earlier Circular No. 3 of 2017 had acknowledged the uncertainty which the amendment was intended to remove, and that an assessee is entitled to claim set-off of loss against income determined under s.115BBE up to assessment year 2016-17. The Revenue's contention could not be countenanced against the Board's own instruction and the plain prospective operation of the amendment. In the words reproduced by the source cited on this page: "A bare perusal of the provisions makes it abundantly clear that it cannot be applied retrospectively." The decision followed or applied CBDT Circular No. 11 of 2019 dated 19 June 2019 — relied on.
It was decided by the High Court on 2020-01-21 and is reported as D.B. Income Tax Appeal No. 4 of 2018, High Court of Judicature for Rajasthan at Jodhpur. Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 115BBE, section 68, section 71, 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 Revenue's appeal was dismissed, with no order as to costs. Section 115BBE(2) as amended by the Finance Act, 2016 operates from 1 April 2017 and cannot be applied retrospectively; for assessment year 2014-15 the assessee was entitled to set off its current year and brought-forward business losses against the deemed income assessed for that year. It arises in Cash Credits & Unexplained Money and Assessment & Scrutiny matters, on section 115BBE, section 68, section 71, section 72 of the Income Tax Act 1961, and was decided by Sangeet Lodha J and Pushpendra Singh Bhati J. 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. For a year up to 2016-17, put the Circular in the reply as the primary document — it is the Board's own instruction and the officer is not free to take a contrary view of it. For assessment year 2017-18 onwards, attack the addition itself rather than the set-off: discharge the burden under s.68 or s.69, or show the receipt is ordinary business income recorded in the books, so that s.115BBE never engages. Check whether the income has in fact been assessed under ss.68 to 69D or merely described that way; s.115BBE(2) bites only on income referred to in sub-section (1), and an addition on an estimate or on a trading result is outside it. Do not carry the reasoning of Chensing Ventures into a post-2016 year without saying what the amendment did; the older decision rests on the absence of a bar that now exists.
Still good law. A later-treatment search was run on the operative sentence and the judgment continues to be quoted and applied by Tribunal benches, the most recent traced being Ranar Agrochem Limited v. DCIT (ITAT Visakhapatnam, 31 August 2026) and Ashvin Dineshbhai Jadav v. ITO (ITAT Rajkot, 29 January 2026). The Cochin Bench reached the same result independently in Shahul Hameed v. ITO, ITA No. 355/Coch/2024, decided 27 March 2025 for assessment year 2014-15, following the Kerala High Court in Vijaya Hospitality and Resorts Ltd. v. CIT (2019) 419 ITR 322 to the same effect. No decision doubting or dissenting from this judgment was found, and no High Court taking the contrary view was located. Two limits: I did not check whether the Revenue filed a special leave petition against this judgment, and I could not retrieve the Kerala High Court judgment in Vijaya Hospitality itself, which is not on Indian Kanoon under that title — its holding is reported here only as recorded in the Cochin Tribunal's order. Most important for the reader: the judgment is confined by its own reasoning to assessment years up to 2016-17. For assessment year 2017-18 onwards s.115BBE(2) in terms denies the set-off, and nothing in this decision suggests otherwise. 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.
Indian Kanoon catalogues this document under the title 'Pr. Commissioner Of Income Tax Central vs M/S Miraj Tradecom Pvt. Ltd'. The judgment's own cause title names the respondent as Aacharan Enterprises Pvt. Ltd. in D.B. Income Tax Appeal No. 4/2018; the site title is a catalogue error and should not be used as the case name. The judgment does not frame or formally answer substantial questions of law in a structured form; the issue is taken as whether amended s.115BBE applies retrospectively to assessment year 2014-15. No law-report citation appeared on the copy read. The figures recorded are: deemed income of Rs. 6,50,00,000, current year business loss of Rs. 3,82,37,792 and brought-forward loss of Rs. 2,67,62,208. Counsel are recorded as Mr. K.K. Bissa for the appellant and Mr. Abhishek Mehta for the respondent. The words 'or set off of any loss' in s.115BBE(2) were read from the departmental text of the section; I did not separately retrieve the footnote recording the Finance Act, 2016 insertion and its effective date, and have taken those from the Board's Circular No. 11 of 2019 and from this judgment. 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 Revenue's appeal was dismissed, with no order as to costs. Section 115BBE(2) as amended by the Finance Act, 2016 operates from 1 April 2017 and cannot be applied retrospectively; for assessment year 2014-15 the assessee was entitled to set off its current year and brought-forward business losses against the deemed income assessed for that year.
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