Report No. 12

78. Losses of unregistered firms or its partners.-

(1) Where the assessee is an unregistered firm which has not been assessed as a registered firm under the provisions of section 190(b) [23(5)(b)] any loss] of the firm shall be set off only against the income of the firm.

[Section 24(1), 2nd Proviso, earlier half]

(2) Where the assessee is a partner of an unregistered firm which has not been assessed as a registered firm under the provisions of section 190(b) [ section 23(5)(b)] and his share in the income of the firm is a loss,-

(a) such loss shall not be set off under the provisions of sections 73(1), 74(1), or 75(1) [section 24(1)];

(b) nothing contained in section 73(2) or 74(2) [section 24(2) main para.] or section 75(2) [section 24(2B)] shall entitle the assessee to have carried forward and set off against his own income such loss.

[Section 24(2), proviso (c), latter part]