Section 77

Losses of unregistered firms or their partners

77. (1) Where the assessee is an unregistered firm which has not been assessed as a registered firm under the provisions of clause (b) of section 183, any loss of the firm shall be set off or carried forward and set off only against the income of the firm.

(2) Where the assessee is a partner of an unregistered firm which has not been assessed as a registered firm under the provisions of clause (b) of section 183 and his share in the income of the firm is a loss, then, whether the firm has already been assessed or not—

(a) such loss shall not be set off under the provisions of section 70, section 71, or sub-section (1) of section 73;

(b) nothing contained in sub-section (1) of section 72 of sub-section (2) of section 73 or sub-section (1) of section 74 shall entitle the assessee to have such loss carried forward and set off against his own income.