TMI Blog1970 (9) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... dividual partner has the right to set off his share of the unregistered firm's loss against his share of income of registered firms of the same year under the same head? " It arises in this way. The petitioners in Writ Petitions Nos. 3417 and 3419 of 1968 were partners in four firms during the accounting period relevant to the assessment year 1961-62. The petitioner in Writ Petition No. 3418 of 1968 was a partner during the said year in three firms. They were assessed by the assessment orders made on February 27, 1962, on the basis of the returns furnished and also on the basis that the firms in which they were partners were all registered firms. At the time of the assessment of the petitioners in Writ Petitions Nos. 3417 and 3419 of 1968 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35(5) of the Act is not applicable to the case of the petitioners, and, secondly, that the share of loss from an unregistered firm must be set off against the share income from the registered firms for the purpose of arriving at the rate at which the total income of the assessee has to be assessed. When the matters came up for final hearing, the petitioners' learned counsel abandoned the said grounds and sought leave to raise an altogether new ground. The leave sought for was granted and in the supplementary affidavits filed, the petitioners have urged the following one ground : that the respondent ought to have set off the share of loss from the unregistered firms against the share of profits from the registered firms and then arrived at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the territory of a proviso is to carve out an exception to the main enactment and exclude something which otherwise would have been within the section. It has to operate in the same field and if the language of the main enactment is clear it cannot be used for the purpose of interpreting the main enactment or to exclude by implication what the enactment clearly says unless the words of the proviso are such that that is its necessary effect. In the said case, it was held that the assessee was entitled to set off the losses incurred in the State of Cochin against the profits made in the State of Travancore. In Muthuraman Chettiar's case, the assessee was a resident in India and carried on his business in India. He was also a partner of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and unregistered firms is contained in the proviso to section 16(1)(b), the first proviso to section 23(5)(a), the second proviso to section 24(1) and clauses (c) and (d) of the proviso to section 24(2) which deal with the question of set-off and carry-forward of losses incurred by firms. Any loss incurred by an unregistered firm may be set off by the firm against its profits of the same year under the same head or any other head and further any unabsorbed loss may be carried forward by the firm and set off against its profits in a subsequent year in accordance with the provisions of section 24(2). If the contention of the learned counsel for the petitioners is accepted, partners of unregistered firms stand to gain a double advantage. The f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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