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2018 (6) TMI 1450 - AT - Income TaxAddition for share of loss from two firms while computing the profit of the assessee for the purpose of applying Sec.115JB - MAT - Held that:- What is excluded from total income by the above sub-section (2A) of Section 10 is the share of the partner in the total income of the firm. Share of loss in a firm is not an expenditure relatable to any exempt income and application of clause –f explanation was in our opinion incorrect. It was Clause (ii) of the explanation which was applicable. Share of loss in our opinion is nothing but share of negative income. Explanation (ii) to Section 115JB mandates reduction of income to which Section 10 applies, if such income is credited in the Profit & Loss A/c. When share of income from firm is exempt u/s.10 2(A) of the Act, necessarily share of loss is also exempt. What the AO did by adding the loss from the two firms to the profits was reducing, the negative Profit, since loss is nothing but negative profit. We are of the opinion what the AO did was in accordance with Clause(ii) of the Explanation and that the Ld.CIT(A) fell in error in relying on a wrong clause for giving relief to the assessee. Accordingly, we set aside the order of the Ld.CIT(A) and reinstate the addition made by the AO. - Decided in favour of revenue.
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