Judgment

HIDAYATULLAH, J. : The three appellants appeal against the judgment and order of the High Court of Bombay answering in the affirmative, the following question :

"Whether the share income of the assessees from the unregistered firm (which is separately taxed), namely, Rs. 26,110/- can be set off against their share loss from registered firms, namely, Rs. 13,167/- ?"

The facts are as follows : Two of the appellants are brothers, and the third appellant is the widow of a third brother, who died during the pendency of the appeal after certificate had been granted by the High Court. The three brothers were partners in two registered firms and one other firm, which was unregistered. The assessment years for the purposes of the appeal are 1948-49 and 1949-50. For the assessment year 1948-49, the income of the three brothers was the same, and it was as follows :

From registered firms ... Rs. 11,902 loss.

1,265 loss.

Total loss Rs. 13,167 .

Income from the unregistered firm Rs. 26,110 profit

Other income Rs. 262 .

The income of the unregistered firm was taxed on the firm and not in the hands of the partners, as was possible under the provisions of cl. (b) of sub-sec. (5) of the S. 23.