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TMI Blog2019 (3) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... was not an Assessee under the Act. Thus, no fault can be found with the impugned order of the AAR, answering the question as posed for its consideration by the Petitioner No.1 in the negative. This decision will not impact the case of the three series (funds) to claim the benefit of carrying forward losses under Section 74 of the Act, if they are otherwise entitlement to it in law. Neither the AAR nor we had any occasion in the present proceedings to decide whether or not, the three series (funds), for whom the Petitioner is claiming benefit in its hands, are entitled to the benefit of carry forward loses under Section 74 of the Act or not. - Writ Petiton No. 9358 of 2018 - - - Dated:- 8-3-2019 - AKIL KURESHI M.S. SANKLECHA, JJ. Mr. Porus Kaka, Sr. Advocate with Mr. Manish Kant, Mr. Rajesh Simhan and Ms. Shipra Padhi i/b. Nishith Desai Co., for the Petitioners. Mr. Tejinder Singh with Mr. Sham Walve, for Respondent No.2. JUDGMENT: (Per M. S. Sanklecha,j.) This Petition under Article 226 of the Constitution of India, impugns the order dated 21st February, 2018 passed under Section 245R (6) of the Income Tax Act, 1961 (the Act) by the Authority for Adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted before us that the AAR was approached by Petitioner No.1 alone, filing an application for an Advance Ruling on the above question to AAR. However, in its application, Petitioner No.1 did describe Petitioner Nos.2 to 4 as investment series (funds) of Petitioner No.1. Thus, claiming it to be a constituents/ part of the Petitioner No.1. Nevertheless, the question as proposed by Petitioner No.1 to the AAR was only with regard to it (Petitioner No.1) above being entitled to carry forward losses. The basis of the claim by the Petitioner No.1 for the carry forward losses under Section 74 of the Act, was as a consequence of re organization of Petitioner No.1 w.e.f. 19th April, 2010. In the circumstances, this Petition seeks a judicial review of the order dated 21st February, 2018 passed by the AAR and the same can only by the same parties who had made an application before the AAR and no new parties are entitled to be added in the Petition to challenge the order of the AAR. The question was answered by the AAR in the context of the application filed by Petitioner No.1 alone with regard to its claim. In the above view, the Petitioner Nos. 2 to 4 are deleted. This Petition as filed is r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Global Equity Fund, a series of the Aberdeen Institutional Commingled Funds, LLC 20070202 5 Aberdeen Delaware Business Trust Emerging Markets Small Companies Fun Aberdeen Emerging Markets Smaller Companies Fund, a series of the Aberdeen Institutional Commingled Funds LLC 20070831 This change in the records of SEBI was in effect a constitution of its earlier Registration. It is pertinent to note that, Petitioner Nos. 2 to 4 are the same noted as Nos. 1 to 3 above in the communication. (iv) Thereafter, on 16th April, 2012, Petitioner made an application to the AAR, seeking Advance Ruling on the question referred to herein above. The applicant after setting out change in the status and name from Aberdeen Delaware Business Trust to Aberdeen Commingled Funds LLC, pointed out loses which had been claimed in the return filed by three of its investment series (funds) namely Aberdeen Asia Pacific Excluding Japan Equity Fund, a series of Aberdeen Institutional Commingled funds LLC, Aberdeen Asia Pacific Including Japan, Equity Fund, a series of Aberdeen, Institutional Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the five series (funds) even after change of its name. Thus, the same support the view that the status of the parties even after conversions, continues to be the same; (iv) In any case, under Section 2 (17) of the Act, the company has been defined for the purposes of the Act, as a body corporate incorporated by or under the law of the country outside India would also be considered to be a company for the purposes of this Act. Thus, it is entitled to the benefit of the Act; and (v) The Ruling sought from the AAR was that the Petitioner be allowed to carry forward loses incurred by the three series (funds) being run by the Petitioners for the Assessment Year 2011 12 and subsequent thereto. As the Petitioner continues to be same person, both in its earlier status as a trust an now as LLC. Benefit of carry forward loss should have been extended to the Petitioner No.1 by the AAR. 9. As against the above, Mr. Tejvindeer Singh, learned Counsel for the Revenue while opposing the Petition, makes submissions as under: (a) The Respondent do not dispute nor does the impugned order of the AAR disputes the position in law that the status of the Petitioner under the conflict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of the law of Delaware, USA, continues to be the same person. This position is accepted in India. Therefore, gain and loss earned by it in its earlier avtar would in law, not be denied only because of change in status from Trust to LLC. However, we note that the AAR answered the above question for Advance Ruling in the negative not on the above ground of change of status of Petitioner No.1 but on the ground that Petitioner No.1 was not possessed of any carry forward loss for the earlier Assessment Year to be set off in Assessment Year 2011 12 and subsequent Assessment Years in terms of Section 74 of the Act. It was in the context of question framed viz. Whether Petitioner No.1 (applicant) is entitled to carry forward losses for earlier years under Section 74 of the Act, that the AAR held that the Petitioner was not the assessee who had claimed a loss in the earlier Assessment Year. The Petitioner No.1 had admittedly filed no return of income and is not allotted any PAN. In the above factual position, the impugned order of the AAR placed reliance upon Section 80 of the Act and the decision of the A. P. High Court in K.V.K. Raju v/s. CIT reported in 252 ITR 754 wherein i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner No.1 who has admittedly filed no return of income and is not assessed under the Act. Besides, the requirement of the Act has to be independently satisfied by the Petitioner No.1 before the AAR to carry forward the losses. As pointed out above, this has not been satisfied by the Petitioner No.1 as correctly held by the AAR. 13. One cannot loose sight of the fact that, the ruling of the AAR on the question as proposed would necessarily depend upon context, in which, the question has been raised. In this case, the Petitioner No.1 was seeking to carry forward accumulated loses under Section 74 of the Act when admittedly it had not filed any return of income, claiming loses for the earlier Assessment Year under the Act and it was not an Assessee under the Act. Thus, no fault can be found with the impugned order of the AAR, answering the question as posed for its consideration by the Petitioner No.1 in the negative. However, it is made clear that, this decision will not impact the case of the three series (funds) to claim the benefit of carrying forward losses under Section 74 of the Act, if they are otherwise entitlement to it in law. Neither the AAR nor we had any occasion in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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