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TMI Blog2012 (2) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... not the losses suffered by the partnership firm – Decided against the assessee. - ITA 66/2012 - - - Dated:- 8-2-2012 - Sanjiv Khanna, R.V. Easwar, JJ. S. Krishnan, Adv. for the Appellant Suruchi Aggarwal, sr. standing counsel for the Respondent Sanjiv Khanna, J CM 1322/2012 1. This is an application for condonation of delay of 35 days in filing of the appeal. For the reasons stated in the application, the delay is condoned. Application is disposed of. ITA 66/2012 This appeal by Pramod Mittal impugns order dated 15.7.2011 passed by the Income Tax Appellate Tribunal (tribunal, for short). The appeal pertains to the assessment year 2005-06. 2. Ld. counsel for the appellant submits that the appellant-asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person. 4. Section 78(2) of the Act reads:- "78. Carry forward and set off of losses in case of change in constitution of firm or on succession - (1) ............. (2) Where any person carrying on any business or profession has been succeeded in such capacity by another person otherwise than by inheritance, nothing in this Chapter shall entitle any person other than the person incurring the loss to have it carried forward and set off against his income." 5. Section 78(2) will apply to the facts of the present case as the partnership firm was dissolved and ceased to exist w.e.f. 18.9.2004. The partnership firm after the said date did not continue. This is not a case of inheritance due to death under the law of succession. The los ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (1) Where a person carrying on any business or profession (such person hereinafter in this section being referred to as the predecessor) has been succeeded therein by any other person (hereinafter in this section referred to as the successor) who continues to carry on that business or profession, - (a) the predecessor shall be assessed in respect of the income of the previous year in which the succession took place up to the date of succession; (b) the successor shall be assessed in respect of the income of the previous year after the date of succession." 6. Section 170(1) is very lucid and clear. The partnership firm has to be assessed in respect of profit and gains from the business for the period up to 18th September, 2004. Aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akes no provision for the division of the income of the previous year between the predecessor and successor. It says that it is only the person who incurred or suffered the loss who will be entitled to carry forward the same and set it off, and no other person. An exception to this rule is the case of succession by inheritance. 8. In the present case the assessee has claimed to set off the loss of Rs.22,40,193/- against his income earned for the period from 18.09.2004 to 31.03.2005. The loss is not the loss suffered by him. It is the loss suffered by the erstwhile partnership firm before 18.09.2004 on which date the firm was dissolved. When the assessee took over the business of the erstwhile partnership firm, it was not a case of successio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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