If the firm is reconstituted due to conflict between partners with one partner exiting, then whether the brought forward business losses be allowed as a deduction to the newly reconstituted firm ?
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Set off of brought forward business losses
Replies (2)
Yes ony if the newly reconstituted firm has same pan number as that of old and atleast 1 old partner should be partner in new firm.....both condition has to be satisfied.
Pls go throught Section 78 of Income Tax Act which provides that whenever there is a reconstitution of firm by way of retirement etc the firm can not carry forward the loss attributable to the retired partner. But this is not applicable to unabsorbed depreciation.
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