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TMI Blog2002 (7) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 1994-95. 3. When the appeal was posted for hearing on 2-5-2002, none was present on behalf of the appellant-assessee. So, the notice was directed to be sent by R.P.A.D. and the case was posted for hearing on 8-7-2002. Even on this date, viz. 8-7-2002, none appeared on behalf of the assessee, and there was not even an adjournment petition. In the circumstances, I am constrained to proceed to dispose of the appeal ex parte qua the assessee after hearing the learned Departmental Representative. 4. Assessee filed a return, in which he apparently claimed set off of the above losses of Rs. 4,19,400 from the firm, M/s. Hotel Maniar, of assessment years 1990-91 and 1992-93, against his income under the head 'capital gains' for the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has mentioned that as the share income is taken into account in the assessment of the partner, for ascertaining the rate of tax, the share of loss allocated to the partner has also to be considered in the hands of the partner. 6. Before me, the learned Departmental Representative relied on the order of the CIT(A). 7. I am of the view that the assessee deserves to succeed in this appeal. The reasoning given by the Assessing Officer for making the disallowance under section 143(1)(a) is not tenable. This is because the provisions of section 80 read with section 139(3) apply only in respect of the returns for the assessment year in which the loss is claimed to be carried forward. They do not, to my mind, apply to a case where the losses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or set off under sections 70, 71, 72, 73, 74 and 74A." It may be observed that section 75 mandates that share of loss from a firm for the assessment year commencing on or before I St day of April, 1992, allocated to a firm but not set off against his other income has to be allowed to be set off against the income of the firm. So, such loss, as allocated to a partner, to the extent not set off against his other income, has to be set off against the income of the firm in a subsequent year. The provision however, is silent on the question whether such set off can be allowed in the hands of the partner in subsequent years. In other words, while the section mandates the allowance of set off in the hands of a firm, it does not explicitly preclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32(2) contemplates a situation where unabsorbed depreciation in the hands of the firm is too large to get absorbed, first, in the hands of the firm and then, after apportionment, in the hands of the partners, what remains thereafter has obviously to be carried forward by the firm which is the assessee referred to in the sub-section." The above position, as laid down by the Apex Court is applicable in the context of the pre-amended provisions of section 32(2) and that section has also been subsequently amended with effect from 1-4-1993. So, it cannot even be held that in the light of the decision of the Apex Court in the case of Garden Silk Weaving Factory, it is established law that the share of loss allocated to a partner has to be neces ..... X X X X Extracts X X X X X X X X Extracts X X X X
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