TMI Blog1998 (1) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... stered firm that is governed by the provisions of the Act which provisions are not overruled by the provisions of section 80 of the Act, the Assessing Officer and the CIT(A) were wrong in denying the carry forward of the share of loss. 2. Mr. Venkatesan, the learned counsel for the appellant submitted that the assessee had filed his return of income on 6th March, 1991 and he conceded that the said return was belated. He submitted that the assessee in this return of income had included his share of profits from the firm M/s. Dasappa Sons at an amount of Rs. 8,63,803. He submitted that the Assessing Officer in his order of assessment had categorically observed that consequent to the conclusion of the assessment proceedings of the register ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firm. These special provisions on loss of a registered firm state that the loss shall be apportioned between the partners for being set off against other income of the partners. He pleaded that it is further provided that in the event of the other income of the partners not being sufficient to absorb the loss the remaining unabsorbed loss would be brought back to the assessment of the firm for being adjusted against its income. He accordingly pleaded that the authorities were not justified in not allowing carry forward of loss in the hands of the partners. 5. The learned counsel for the assessee submitted that the decision of the Hyderabad Bench of the Income tax Appellate Tribunal (ITAT in short) in ITO v. K.V.K. Raju [1991] 37 ITD 140 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtner being allocated share of loss of a firm by virtue of the provision contained in section 183(2) of the Act. 8. In K.V.K. Raju case the ITAT was concerned with the situation of a partner claiming the benefit of carry forward of loss for the assessment year 1982-83 in the assessment year 1983-84. The partner was allocated the loss of the firm for the assessment year 1982-83 on completion of the assessment of the firm. However, the said allocated loss could not be adjusted in the assessment of the partner because, he had filed the return of income only on 3-5-1985 which was beyond the time allowed under section 153 of the Act for completion of assessment that ended on 31-3-1985. The assessee had claimed that the share of loss of the fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not filed his return of income. 11. Assessing Officer had so observed in the order of assessment of the assessee that consequent to the adjustment allowed under section 43B of the Act in the assessment of the firm, the income got converted to a loss. Assessing Officer had further observed that the loss to be shared by the assessee was Rs. 13,27,614. He then observed that he is not allowing the adjustment and the carry forward of the loss in the hands of the appellant because the return was filed beyond the time allowed under section 80 of the Act. 12. The CIT(A) had upheld the order of the Assessing Officer by observing that section 80 supercedes the provision in other sections of the Act in allowing carry forward of business loss. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice under subsection (2) has sustained a loss in any previous year under the head 'Profits and gains of business or profession' or under the head 'Capital gains' and claims that the loss or any part thereof should be carried forward under sub-section (1) of section 72 or sub-section (2) of section 73 or sub-section (1) or sub-section (3) of section 74 or sub-section (3) of section 74A, he may furnish, within the time allowed under subsection (1) a return of loss in the prescribed form and verified in the prescribed manner and containing such particulars as may be prescribed, and all the provisions of this Act shall apply as if it were a return under sub-section (1)." 15. The reading of the above section indicates that it had laid down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned under the various heads of income in the same manner as was computed in the hands of the firm. The partner includes his share of profit or loss from the firm under different heads as was computed in the hands of the firm and one such head of income is profits or gains from business or profession. Furthermore because it is only the partner who could claim the set off of the loss of a registered firm against his other incomes, there could be no distinction made between loss suffered on his own account and the loss that is shared by him as a partner. Therefore, we reject the argument so advanced by the counsel. 18. In the instant case the appellant was served with a notice under section 148 of the Act and was followed by notice under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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