Case Law Details
Case Name : M/s Kerala Sponge Iron Ltd. Vs CIT, Trichur (Kerala High Court at Ernakulam)
Related Assessment Year :
Courts :
All High Courts Kerala High Court
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Brief of the case:
- The Hon’ble Kerala High Court in the case of M/s Kerala Sponge Iron Ltd. vs. CIT held that once the income has been assessed u/s 68 as unexplained cash credit it cannot be treated as business income because it is not an income classifiable under any heads of income as per Sec 14.
- Therefore, such incomes are not eligible to set off brought forward business losses and unabsorbed depreciation.
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Author Bio
With respect to the Hon’ble High Court, I am of the opinion in view of the provisions of section 5 & section 14 the provisions of the Income Tax Act Income Tax can’t be charged unless and until the such income falls within the ambit & scope of any of the Heads of Income specified in section 14 of the Act and since provisions of section 68 don’t supersede the provisions of section 5 or section 14 of the Act, any sum considered as taxable income under the provisions of section 68 of the Act has to be income under the head ‘Income from other sources’ and therefore, loss under the head ‘Profits and gains of business or profession’ can be set off against the deemed income (considered by invoking the provisions of section 68 of the Act.