PRAMOD MITTAL Vs. CIT

JUDGEMENT

(1.) The following question of law arises for consideration in this appeal by the assessee:

(2.) The facts briefly are that the assessee was partner of a firm with his brother. The assessee succeeded to the business by way of family settlement which also dissolved the firm with effect from 18.09.2004. The petitioner, who took over the business, assets, liabilities and affairs of the ongoing business, filed a return in which he claimed set-off of the losses of the erstwhile firm. These losses were by way of unrecoverable expenses over the income of the erstwhile firm. The Assessing Officer (AO), the CIT (A) and later the Income Tax Appellate Tribunal (ITAT) rejected the claim on the ground that Section 78(2) did not entitle the assessee to it. On appeal, this Court affirmed that view and also held as follows:

(3.) In the meanwhile, the income authorities initiated penalty proceedings on the footing that the assessee had made a false claim. This penalty imposed was confirmed by CIT(A) an order which was upheld by the ITAT.