9911796707
TMI Blog1970 (9) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... riod 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, an application for registration of one of the firms in which the said petitioners were partners, viz., Messrs. Srinivasa Textiles, was pending. Similarly, the application for registration of Messrs. Lalitha Silk Throwing Factory in which the petitioner in Writ Petition No. 3418 of 1968 was a partner was als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tters 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 the net taxable income under section 35(2) of the Act. In support of the said contention, Sri K. Srinivasan, learned counsel for the petitioners, argued that sub-section (1) of section 24 of the Act provides for set-off of losses under one head against profits under any other head of the same assessee in the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 firm carrying on business outside India. It was held that he was entitled to set off loss incurred by him as a partner of the foreign business against the profits and gains of the business carried on in India. The second proviso to section 24(1) was held not applicable to such a case. In our opinion, none of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 firm itself is entitled to carry forward its loss and set off against its profits in a subsequent year in accordance with the provisions of section 24(2). The partners of the unregistered firm at the same time will also be entitled to set off their share of loss against their own income of the same year under th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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