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TMI Blog1965 (12) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... med that it had suffered a loss of ₹ 8,814 towards its share in the unregistered firm and that it should be allowed a set-off against its profits from other businesses in this year. The Income Tax Officer did not allow the set-off, and his view was upheld in appeal by the Appellate Assistant Commissioner. One further appeal by the assessee, the Appellate tribunal felt coerced by the view taken by the Bombay High Court in Jadavji Narsidas Co. v. Commissioner of Income Tax and decided that the loss should be set off. At the instance of the Commissioner of Income Tax, this reference has been made to this court under section 66(1) of the Act for determination of the following questions of law. (1) Whether, on the facts and circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registered firm, which has not been assessed under the provisions of clause (b) of sub-section (5) of section 23, can be set off only against the income, and the profits and gains, of the firm and not against the income and profits and gains of any of the partners of the firm. The argument on behalf of the assessee is that the unregistered firm was not assessed to tax, and it is not the unregistered firm which is claiming a set-off; but the assessee in this case being a person who was a partner of the unregistered firm, which has sustained a loss, is entitled to the set-off under sub-section (1) of section 24 and the proviso does not hit his case. The argument does find support from the Bombay decision, referred to in the order of the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essed the unregistered firm or taken action under section 23(5)(b). What the High Court has ordered just cannot be done as it is against the provisions of section 24. In our opinion, the case is fully covered by the decision of the Supreme Court in Commissioner of Income Tax v. Jadavji Narsidas Co. The first question referred for our determination, therefore, must be answered in favour of the Commissioner of Income Tax and against the assessee. We, accordingly, hold that, on the facts and in the circumstances of the case, the assessee is not entitled to claim a set-off of the loss of ₹ 8,814 towards it share in the unregistered firm of M/s. Bhagwandas Santosh Kumar. In the view we have expressed above, it is conceded on all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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