TaxTMI 
TaxTMI 
1998 (1) TMI 100
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....onceded 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 registered firm, of which the assessee is a partner, he is adopting the final figures in the hands of the partner. The Assessing Officer had further remarked that in the hands of the firm consequent upon the allowing of deductions under section 43B of the Act, the income as returned by the fin-n got converted to a loss and the share of loss of the assessee was Rs. 13,27,614. This loss he refused to be adjusted and carried forward because, the return was not filed within the time permitted under the Act which being a condition precedent under section 80 of the Act. He contended that the CIT(A) had merely echoed the views of the Assessing Officer. 3. The learned counsel submitted that the Assessing Officer having determined the loss in pursuance of a return filed by an appellant, he is bound to consider its carry forward and c....
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....B.B. Danganavar v. ITO [1967] 65 ITR 370 and the Calcutta High Court in Burdwan Wholesale Consumers' Co-operative Society Ltd. v. CIT [1991] 191 ITR 570/57 Taxman 227. 7. The rival contentions concerning the issue in appeal has been duly considered and the references to the rulings of the ITAT and the High Court had been very carefully perused. The case laws relied upon by the learned departmental representative are not directly on the issue in the present appeal before us. Both the rulings are not related to the partner 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 end....
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....fit only and it was not a case of loss return but the share of loss of the firm allocated to him and that too as a consequence of the assessment of the firm. He opined that the provisions contained in section 182(3) of the Act are machinery provisions only and do not operate to countermand the provisions in the section 80 of the Act. 13. Both the authorities below had resorted to the provisions contained in section 80 of the Act in refusing in the hands of the assessee the adjustment of the share of loss of the firm against his other incomes. Therefore, it is necessary to appreciate the provisions of section 80 of the Act and the said provision is reproduced below for the sake of facility: "Notwithstanding anything contained in this Chapter, no loss which has not been determined in pursuance of a return filed in accordance with the provisions of section of sub-section (3) of section 139 shall be carried forward and set off 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." 14. It can be appreciated from the reading of the provision of section 80 of the Act that it dra....
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....s determined by applying the provisions of section 67(1) of the Act, shall be apportioned 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 section 142(1) of the Act whereupon the assessee had chosen to file the return. It is not disputed that the return so filed consequent to the notices included her share of profit from the firm. It is thus clear that the said return could not be said to be a voluntary return within the meaning of section 139(1) of the Act and it is not a case where the assessee is ....