TMI Blog1929 (11) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... lculation of that year, but would be carried forward for being allowed in future. The firm desires that the allowance for depreciation should be taken into consideration for the purpose of calculating the loss for the year in question. The members' of the firm have other income against which the loss of the firm, as it is registered, can be set off under the provisions of Section 24, Income Tax Act and therefore desire that the net business loss of the firm; should be held to be as large as possible. The question which arises has been thus stated by the Income Tax Commissioner: In view of the provisions of Section 10(2)(6), Income Tax Act, 1922, can an assessee claim, in the case of a business which has resulted in a loss, that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss is calculated in exactly the same way as profits or gains. Clause 6(b) of the sub-section enunciates a special proviso regarding the allowance for depreciation: Provided that, where full effect cannot be given to any such allowance in any year owing to there being no profits or gains chargeable for that year, or owing to the profits or game chargeable being less than the allows ice, the allowance or part of the allowance to which effect has not been given, as tin case may be, shall be added to the amount of the allowance for depreciation for the following years deemed to be part of that allowance, or if there is no such allowance for that year, be deemed to be the allowance for that year, and so on for succeeding years. 5. In Ka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the heads mentioned in Section 6, he shall be entitled to have the amount of the loss set off against his income, profits or guns under any other head in that year; (2) Where the assessee is a registered Arm, and the loss sustained cannot wholly be set off under Sub-section (1), any member of such firm shall be entitled to have set off against any income, profits or gains of the year in which the loss was sustained in respect bf which the tax is payable by him, such amount of the loss not already set off as is proportionate So his share in the firm. 7. It is clear that the loss to which Sub-section (2) refers is loss of profits or gains. This phrase is unusual, but must, when the loss is under the head business, mean loss on the ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax, Madras v. Arunachelam Chettiar A.I.R. 1924 Mad. 474 would involve an answer, qualified but to a great extent in the affirmative, to the question on other grounds. The learned Judges who decided that case considered that a partner of a firm, registered or unregistered, which carried on business was an asses-see in respect of the profits or gains of that business and was therefore entitled to set off the loss in the business of the firm against the profits in other business carried on by him. I respectfully dissent from this reasoning. As I have pointed out, it is clear that a registered firm can be an assessee. The firm, then, is the assessee in respect of the profits and gains of the business of the firm. A partner is not assessed with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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