25 July 2010
There is partnership firm having 2 partners.And there is loss of Rs.10 lakhs in the firm relating a running partner(Ramesh) in the firm(Total loss Rs.36 lakhs and partners whose share of loss is Rs.26 lakhs retired from the firm). The remaining partner Ramesh by taking a new partner harish continued the business for 2 years(for these 2 years they setoff profits Rs.2 lakhs of the loss of Rs.10 lakhs concerned to Ramesh)
Now the question For Financial year.2009-10 they changed only the name(all others same) of the firm.And they get new PAN. Both Ramesh and harish are only partners even in the new firm. And for this year they want to show a profit of Rs.50000/-.Can they setoff the profit against old loss of Rs.8 lakhs.
25 July 2010
Cannot set off because it is a new firm by virtue of the new PAN card and by the restrictions contained in section 78(2) of the Income tax Act,1961.
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