1981 (3) TMI 69

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....r 1966-67, when it was assessed as an unregistered firm should be carried forward and added to the loss incurred by the assessee-firm in 1967-68, in which year it was assessed as a registered firm and that such resultant increased loss should be divided between the partners ? 2. Whether, on facts the circumstances of the case, and in law the Appellate Tribunal was right in directing that the loss incurred by the assessee in the assessment year 1966-67 in which year it was assessed as an unregistered firm should be carried forward and set off against the profits of the assessee-firm in the assessment year 1967-68, even though the assessee-firm had not made any profit in the assessment year 1967-68 ? " Briefly the facts of the case as s....

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....he assessee-firm to the extent of the share of the continuing partners, to the assessment year 1967-68. Thereafter, at the instance of the revenue, the two questions set out first have been referred for the opinion of this court. At the outset we must observe that the second question and the last part of the first question relating to apportionment of the loss between the partners do not arise out of the order of the Tribunal. There is no direction in the order of the Tribunal that the loss of the unregistered firm for the year 1966-67 should also be apportioned between the partners. These was also no question of set-off as the firm did not earn any profit for the assessment year 1967-68. Therefore, we confine ourselves only to the first....

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....t was assessed as an unregistered firm. (2) The benefit of set off of loss or carry forward and set off of loss is available only against the income of the firm. The sub-section does not say that such set off or carry forward and set off of loss would be available, if only or so long as the firm is assessed as an " unregistered firm ". The benefit of set-off of loss or carry forward and set-off of loss incurred by a firm during the year when it was assessed as an unregistered firm, is permitted by the section even if it is assessed as a registered firm during subsequent years. In other words, the firm, which is entitled to the benefit is one and the same, though its status may differ for purposes of assessment in view of the special p....