Income-tax Act,1961
Act No : 43
Section :
Losses of firms
3[75. Losses of firms Where the assessee is a firm, any loss in relation to the assessment ---------------------------------------------------------------------- 1 Substituted for 'from the source specified in clause (c) of sub- section (2)", ibid. 2 Substituted for the following sections 75, 76 and 77 by the Finance Act, 1992, w.e.f. 1-4-1993: Section 75: Prior to the substitution, section 75, as amended by the Finance Act, 1972, w.e.f. 1-4-1972; Finance Act, 1974, w.e.f. 1-4-1975 and the Finance Act, 1987, w.e.f. 1-4-1988, read as under: "75. Losses of registered firms.-(1) Where the assessee is a registered firm, any loss which cannot be set off against any other income of the firm shall be apportioned between the partners of the firm, and they alone shall be entitled to have the amount of the loss set off and carried forward for set off under sections 70, 71, 72, 73, 74 and 74A. (2)Nothing contained in sub-section (1) of section 72, sub- section (2) of section 73, sub-section (1) or sub-section (3) of section 74 or sub-section (3) of section 74A shall entitle any assessee, being a registered firm, to have its loss carried forward and set off under the provisions of the aforesaid sections." -> -> ----------------------------------------------------------------------- 1.335 year commencing on or before the 1st day of April, 1992, which could not be set off against any other income of the firm and which had been apportioned to a partner of the firm but could not be set off by such partner prior to the assessment year commencing on the 1st day of April, 1993, then, such loss shall be allowed to be set off against the income of the firm subject to the condition that the partner continues in the said firm and to be carried forward for set off under sections 70, 71, 72, 73, 74 and 74A.] 1[(1) Where a change has occurred in the constitution of a firm, ---------------------------------------------------------------------- -> -> Section 76: Prior to the substitution, section 76 read as under: "76. Losses of unregistered firms assessed as registered firms.- In the case of an unregistered firm assessed under the provisions of clause (b) of section 183 in respect of any assessment year, its losses for that assessment year shall be dealt with as if it were a registered firm.' Section 77: Prior to the substitution, section 77, as amended by the Finance Act, 1972, w.e.f. 1-4-1972; Finance Act, 1974, w.e.f. 1-4-1975 and Finance Act, 1987, w.e.f. 1-4-1988, read as under: "77. Losses of unregistered firms or their partners.-(1) Where the assessee is an unregistered firm which has not been assessed as a registered firm under the provisions of clause (b) of section 183, any loss of the firm shall be set off or carried forward and set off only against the income of the firm. (2)Where the assessee is a partner of an unregistered firm which has not been assessedas a registered firm under the provisions of clause (b) of section 183 and his share inthe income of the firm is a loss, then, whether the firm has already been assessed or not- (a)such loss shall not be set off under the provisions of section 70, section 71, sub-section (1) of section 73 or section 74A; (b)nothing contained in sub-section (1) of section 72 or sub-section (2) of section 73 or sub-section (1) or sub- section (3) of section 74 or sub-section (3) of section 74A shall entitle the assessee to have such loss carried forward and set off against his own income. " Earlier, all the three sections were omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989 but were reintroduced by the Direct Tax Laws (Amendment) Act, 1989, with effect from the same date. 1 Substituted by the Finance Act, 1992, w.e.f. 1-4-1993. Prior to the substitution, subsection (1), as originally enacted, read as under: "(1) Where a change has occurred in the constitution of a firm, nothing -> -> ---------------------------------------------------------------------- 1.336 nothing in this Chapter shall entitle the firm to have carried forward and set off so much of the loss proportionate to the share of a retired or deceased partner as exceeds his share of profits, if any, in the firm in respect of the previous year.] (2) Where any person carrying on any business or profession has been succeeded in such capacity by another person otherwise than by inheritance, nothing in this Chapter shall entitle any person other than the person incurring the loss to have it carried forward and set off against his income.
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