Representative assessment of a deceased's estate does not by itself bar set-off of brought forward capital losses against later capital gains.

Executors of a deceased assessee, though assessed as an association of persons under section 168 of the Income-tax Act, 1961, are not treated as a distinct taxable entity for denying set-off of the deceased's brought forward capital loss against capital gains arising during the administration period. Section 159 governs income up to the date of death, while section 168 governs income of the estate after death; both provisions operate in relation to legal representatives and the executor is taxed in a representative capacity. The separate assessments for the year of death do not bar set-off where the statutory conditions are otherwise satisfied, so the claim was accepted.

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Issues: Whether the executors of a deceased assessee, assessed as an association of persons under section 168 of the Income-tax Act, 1961, could claim set-off of the deceased's brought forward capital loss against capital gains arising during the administration period.

Analysis: The definition of legal representative, read with the provisions governing assessment of a deceased person and the estate, showed that both section 159 and section 168 operate in relation to assessment of legal representatives. Section 159 applies to income of the deceased up to the date of death, while section 168 applies to income of the estate after death. The executor is assessed in a representative capacity and the tax incidence remains on the estate of the deceased. The separate assessments for the year of death do not convert the assessee into distinct taxable entities for the purpose of denying set-off where the claim otherwise satisfies the statutory conditions.

Conclusion: The question was answered in the affirmative. The executors were not to be treated as a different entity merely because they were assessed as an association of persons, and the claim for set-off could not be rejected on that ground.

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