Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2015 (8) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (8) TMI 769 - HC - Income TaxShare of the loss of the AOP claimed as business loss - setting off of the above loss of the joint venture against the profit of the Assessee as a business loss by the AO reversed by CIT(A) on the ground that the AO could have computed the loss of the AOP only after the AOP filed its own return - AO’s action was held to be without jurisdiction and prejudicial to the interest of the Revenue BY CIT(A) - The ITAT by its order reversed the order of the CIT (A) and held in favour of the Assessee - whether Tribunal was right in law in holding that the order passed by the Assessing Officer on 31.12.1990 in respect of the assessee was neither erroneous nor prejudicial to the interest of the Revenue? - Held that:- Under Section 86 of the Act it is provided that when the Assessee is a member of the AOP, income tax shall not be payable by the Assessee in respect of his share in the income of the AOP computable in the manner provided in Section 67 (A). Clause (b) of the first proviso to the above Section states that unless the AOP is chargeable to tax on its total income at the maximum marginal rate, the share of member computed in terms of Section 67 (A) shall form part of its total income. However, there is no corresponding provision for setting off of a member’s share of the losses of the AOP against his personal income. In the instant case the CIT (A) was right in reversing the decision of the AO to set off the Assessee's share of the loss of the joint venture against the profit of the Assessee as a business loss. The ITAT's order reversing the CIT (A) was, therefore, erroneous. The question referred is answered by holding that the ITAT erred in holding that the order passed by the AO was not prejudicial to the interests of the Revenue.
|