Law: Income Tax Act, 1922

Section: 24(1)

(Appeals from the judgments and decrees of the Allahabad High Court respectively dated April 14, 1964, in Income-tax Reference No. 130 of 1960 and dated May 5, 1964, in. Income-tax Reference No. 777 of 1961). Income-tax--Loss -- Set-off - Speculation business-Loss in speculation whether can be set-of against other business profits of the same year-Indian Income-tax Act, 1922, S. 24(1), prov. (i) (after amendment in 1954), prov. (ii) (prior to amendment in 1954)-[Jagannath Mahadeo Prasad v. Commissioner of Income tax (1965) 55 I T R 501 and Gauri Dutt Bhagwan Das v. Com missioner of Income-tax (1965) 56 I T R 423 reversed. The assessee is not entitled to set off speculative losses against profits from other business activities of the same year, for the purpose of computing the income, profits and gains under section 10(1) of the Indian Income-tax Act : the second proviso to section 24(1) of the Act prior to the amendment of the section by the Taxation Laws (Extension to Jammu and Kashmir) Act, 1954, nor the first proviso after that amendment, applies. It provides in unmistakable and unequivocal terms that any losses sustained in speculative transactions which are in the nature of a business shall not be taken into account except to the extent of the amount of profits or gains in any other business consisting of speculative transactions. Keshavlal Premchand v. Commissioner of Income-tax 1957) 31 I T R 7 approved. Jagannath Mahadeo Prasad v. Commissioner of Income-tax (1965) 55 I T R 501 and Gauri Dutt Bhagwan Das v. Commis sioner of Income-tax (1965) 56 I T R 423 reversed. Commissioner of Income-tax v. Ramgopal Kanivalal (1960) 38 I T R 193 ; Commissioner of Income-tax v. Ram Sarup (1962) 45 I T R 248 ; Joseph John v. Commissioner of Income-tax (1964) 51 I T R 322 ; Jwnmarlal Surajkaran v. Commissioner of Income tax (1953) 47 I T R 809 ; Manohar Lal Munshi Lal v. Commissioner of Income-tax (1952) 44 I T R 618 and Sree Hanuman Investment v. Commissioner of Income-tax (1963) 48 I T R 915 ref. JUDGMENT GROVER, J.--The common question which arises in these appeals by certificate is whether speculative losses can be set off against profits from any other business…