1997 (4) TMI 73

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..... unal after taking into consideration the facts and circumstances that the partners, as heirs, had succeeded to the business of the deceased which finding has been accepted by the High Court in the present case, thus in the facts of these cases no ground is made out for interference with the impugned judgment of the High Court. Appeal dismissed.
Judge(s) : S. C. AGRAWAL., D. P. WADHWA ORDER These appeals by the Revenue relate to entitlement to set-off under section 78(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), in respect of losses sustained in the proprietary business carried on by Mudhakant M. Mehta against the income of the assessee, a registered partnership firm. These appeals relate to the assessment yea .....

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..... speculation in shares, cotton and other commodities. He died on March 23, 1964, leaving behind his widow, a son and a daughter. On April 22, 1964, the three heirs of Madhukant M. Mehta entered into a partnership an executed a partnership deed wherein they agreed to carry on the said business of speculation. In the said speculation business carried on in the name of the partnership firm, profits were earned and the assessee sought to carry forward and set off the losses incurred by the deceased in his proprietary business against the income from the speculation business of the partnership firm. The Income-tax Officer disallowed such set-off on the ground that there was no succession to the business of the deceased. The Appellate Assistant Co .....

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..... o be used by the assessee. (vi) The constituents of the assessee's business were the same as those of the business of the deceased. (vii) The partnership deed clearly evidenced the intention of the legal heirs who constituted the assessee-firm to continue and carry on, the business which was carried on by the deceased." The Tribunal held that the partners, as heirs, had succeeded to the business of the deceased and there was inheritance for the purpose of section 78(2) of the Act. The said finding recorded by the Tribunal has been accepted by the High Court. The High Court has observed : "At the risk of repetition, it might be stated that the Tribunal has found in the instant case that there was no dispute that even prior to the execut .....

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