RATNAM J.

The assessee in this case is an individual. One Ramalingam Pillai and Subramania Pillai, the husband of the assessee, entered into a deed of partnership on July 22, 1945, for the purpose of carrying on business in the manufacture and sale of certain medicinal products under the firm name of South India Manufacturing Company and that business was so carried on and conducted. Subramania Pillai died on February 19, 1972. By another deed of partnership dated February 23, 1972, entered into between Ramalingam Pillai and the assessee, the assessee became a partner of the firm "South Indian Manufacturing Company". Her capital contribution was stated to be that amount which stood to the credit of her deceased husband, Subramania Pillai, in the capital account of the firm as on February 19, 1972. For the assessment year 1973-74, the assessee returned a loss of Rs. 1, 52, 098 claiming that she had succeeded to the business of her husband by inheritance and that the loss amounting to Rs. 2, 01, 344 sustained in that business should be set off. The Income-tax Officer allowed only a sum of Rs. 4, 338 as set off, being the prior year's business loss and disallowing the balan