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TMI Blog1982 (11) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... nsali 30%. The remaining 15% share fell to Sailesh T. Bhansali, who, however, is not in appeal before us at present. 2. We set out first the background of facts relating to the firm. The firm did not, for the asst. yr. 1977-78 to which the appeal (ITA 151/Coch/81) pertains file any return of income till notice u/s 147 (A) of the Act was issued on 19th October, 1978. The firm filed its return thereafter on 16th May, 1979. The ITO examined the accounts very elaborately he granted continuation of registration and eventually arrived at a figure of total loss in the case of the firm of Rs. 1,60,658. He stated in the order of assessment after arriving at the figure of loss to which we have referred, as under. "The assessee did not file volu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of s. 80 of the Act, to which he had adverted does not prevent the loss being distributed amongst the partners as envisaged by the provisions of s. 182(2). He directed the ITO to distributed the loss amongst the partners. 4. The revenue in the appeal before us (ITA) No. 151 (Coch/81) states that the CIT(A) erred in directing that the loss should be distributed amongst the partners of the assessee-firm and adjusted in their assessments. The submission of the ld. Departmental representative was based on the provision of s. 80. He submitted that the prohibition in s. 80. which related to the carry forward of the loss, should be considered in the case of a registered firm to relate to the earlier stage of the determination of the loss shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red firm. He also submitted that a return filed within the period permitted u/s 139 (4) should be construed, notwithstanding the issue of a notice u/s 148, to be a return filed u/s 139 of the Act. 6. We have considered the rival submissions. The provisions of s.80 reads as under; "80. Notwithstanding anything contained in this Chapter no loss which has not been determined in pursuance of a return filed under section 139, shall be carried forward and set off under sub-section (1) of section of 72 or of section (2) of section 73 or sub-section (1) of section 74 or sub-section (3) of section 74A". It is clear on a plain reading of the section, which we are bound to that the only bar is against the carry forward of loss unless certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D.' should be construed as dropping of the proceedings and that no assessments should be construed as having been made. In the present case, in fact and in law, an assessment has been made. The provisions of s. 182(1) and (2) read as under: "182(1) Notwithstanding anything contained in ss. 143 and 144 and subject to the provisions of sub-section (3), in the case of registered firm after assessing the total income of the firm,- (i) the income-tax payable by the firm itself shall be determined; and (ii) the share of each partner in the income of the firm shall be included in his total income and assessed to tax accordingly. (2) If such share of any partner is a does not shall be set of against his other income or carried forward a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case, the CIT (A) in his direction has stated that the ITO is directed to just determine the loss against the appellant's other income. According to the ld. departmental representative even the direction as given by the CIT(A) is not sustainable. We have already referred to the provisions of s.80 and this is a case of first assessment by issue of notice u/s 47 and not a case of reassessment and having regard to the ratio of the judgement of Calcutta High Court in the case of Sun Engineering Works(P) Ltd. vs. CIT, West Bengal. I (1978) 111 ITR 166(Cal), the inter se set off of the apportioned loss amongst other heads of income would be in order. We are, therefore, unable to agree with the department that the inter se set off was not permis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as claimed by the firm in reassessment proceedings and so could not be assessed in the hands of the firm and therefore the question of distributing and allocating loss if any of the firm among the partnership adjusting the share of loss if any in the assessee's total income u/s 182 does not arise. 3. For those and other reasons that may be urged at the time of hearing it is prayed that the order of the CIT(A) may be set aside and that of the ITO restored." and in respect of which further arguments adduced by the ld. departmental representative have been adverted to would fall to be dismissed. The cross objection (No. 11 (Coch)/81)in substance only seeks for the order of the CIT (A) being upheld. This is dismissed as superfluous. 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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