Carry forward of partnership losses blocked on partner exit; excludes unabsorbed depreciation and capital research expenditure.

Section 78 provides that when a partner retires or dies, the share of loss attributable to the outgoing partner cannot be carried forward by the firm, and this restriction applies only to losses; unabsorbed depreciation, unabsorbed capital expenditure on scientific research, and family planning expenditure are not affected and remain eligible for adjustment.

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