TaxTMI 
TaxTMI 
1959 (6) TMI 17
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....1) of the Indian Income-tax Act. 2. Hiralal and his nephew Jayantilal used to carry on the business in equal partnership. Hiralal died on August 14, 1953, without leaving a will. He had no children. Jayantilal took the wife of Hiralal as his equal partner under a deed of partnership dated 16th August, 1953. The assessee's accounting year is S. Y. ending with Diwali 1954 and the assessment year is 1955-56. 3. In the assessment year 1953-54, when Hiralal was alive the partnership suffered heavy losses. Hiralal's share of the loss amounted to Rs. 1,07,420. This loss was carried forward as provided under the law. In the following assessment year, i.e., 1954-55 also, the firm suffered a loss. Hiralal's share of the loss for the....
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....nbsp; " The share of the husband has been given to her. It has devolved on the widow as she was the legal heir to the deceased. She has, therefore, in our opinion, succeeded by inheritance to the share in the partnership. " The order of the Tribunal is annexure " A " and forms part of the case. 6. The following question of law arises out of the aforesaid order of the Tribunal: "Whether on the facts and circumstances of the case the assessee is entitled to claim a set-off of the assessable profits against the losses suffered by the assessee's husband in the assessment years 1953-54 and 1954-55 under section 24(2) of the Income-....
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....hip earned some profit and her share of the loss of the year 1954-55 and also a half share of the loss which was suffered prior to 14th of August, 1953, was sought to be set off by the assessee Bai Mani under section 24(2) of the Income-tax Act. In respect of the share of loss suffered during the lifetime of Hiralal, Bai Mani claimed in the assessment proceedings that she had by inheritance succeeded him in the constitution of the firm and, therefore, his share in the loss was liable to be set off against the income, profits or gains of the business for the assessment year 1955-56. The Income-tax Officer negatived that contention and the Appellate Assistant Commissioner confirmed that order. The Tribunal, however, held that the share of Hir....
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....roportionate to the share of a retired or deceased partner computed in accordance with the provisions of clause (b) of sub- section (1) of section 16 as exceeds his share of profits, if any, of the previous year in the firm, or to entitle any partner to the benefit of any portion of the said loss which is not apportionable to him under the said clause (b), and where any person carrying on any business, profession or vocation has been succeeded in such capacity by another person, otherwise than by inheritance nothing in this section shall be deemed to entitle any person other than the person incurring the loss to have it set off against his income, profits of gains. Evidently, there has been change in the constitution of the firm Hiralal Mat....