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Disolve firm loang term capital loss

vishal (CA) (60 Points)

02 December 2011

Please gide me in case of disolve partenrship firm had long term capital loss for sell of buliding can be carry forward by partners in his/her return and adjusted in futher capital gain or not???

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CA PRABHAKAR JHA (ACA) (313 Points)
Replied 02 December 2011

Originally posted by : vishal
	Please gide me in case of disolve partenrship firm had long term capital loss for sell of buliding can be carry forward by partners in his/her return and adjusted in futher capital gain or not???

Section 78- CARRY FORWARD AND SET OFF OF LOSSES IN CASE OF CHANGE IN CONSTITUTION OF FIRM OR ON SUCCESSION.

(1) Where a change has occurred in the constitution of a firm, 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.

From above it can be seen that in case of change in partnership will result in non applicability of carry forward, therfore it is not in order to claim that loss in the hands of parterner

Further, Loss can be carried forward only in the hands of assessee who has incurred such loss except in case of inheritances, therefore partners of a dissolved firm will not be able to carry forward the loss of dissolved firm

Hope this will be helpful for you,

Thanks