Law: Income Tax Act (XI of 1922)

Section: 10, 24(1)

Income tax Act (XI of 1922)---   ---Ss. 10, 24(1), proviso Loss--Loss in speculation Whether can be set of against profits from other business Scope of S. 24(1), proviso Interpretation of statutes Function of provisos.   On a true interpretation of section 10 and subsection (1) of section 24 of the Income tax Act, 1922 and the first proviso thereto, an assessee is not entitled to claim a set off of the loss suffered by him in speculation business against the profits of the assessee in a business other than a business consisting of speculative transaction.   Keshavlal Premchand v. Commissioner of Income tax (1957) 31 I T R 7 ;Commissioner of Income tax v. Ramgopal Kaniyalal (1960) 38 I T R 193 and Manohar Lal Munshilal v. Commissioner of Income tax (1962) 44 I T R 618 fol.   Commissioner of Income tax v. Indo Mercantile Bank Ltd. (1959) 36 I T R 1 (S C) explained. JUDGMENT   GROVER, J. For the assessment year 1954 55 Messrs Ishar Dass Harnam Dass had been assessed as Hindu undivided family, Ram Sarup being the karta. The income of the assessee was derived from business, house property and share of profits from some firms. Certain speculative business was also carried on in which a loss of Rs. 7,628 was incurred. The assessee wanted this loss in speculation to be set off against the profits from business and share income from firms in which the assessee was a partner. This claim was not accepted by the Income tax Officer according to whom the loss in speculation could be set off only against the profits, if any, from speculation business of the succeeding year. Having failed in appeal before the Appellate Assistant Commissioner, the assessee approached the Tribunal who held that the set off claimed could be allowed against the other profits computed under section 10 and that the first proviso to subsection (I) of section 24 of the Income tax Act did not control the terms of the former section. At the instance of the Commissioner of Income tax, the Tribunal has referred the following question to us for opinion under section 66(1) of the Act :   "Whether on a true interpretation of section 10 and subsection (1) of section 24 and…