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Issues involved: Refusal to allow set-off of carried forward losses of speculation business against speculation profit for assessment year 1958-59.
Summary: The High Court of BOMBAY was approached by the assessee regarding the refusal of the Tribunal to allow the set-off of carried forward losses of speculation business against the speculation profit of Rs. 11,369 for the assessment year 1958-59. The assessee, engaged in speculative transactions, ready shares business, and dividends, had incurred losses in speculation business in previous years. The Income-tax Officer did not permit the set-off claim for the speculation profit against the losses brought forward from previous years. The Appellate Assistant Commissioner and the Tribunal upheld this decision, interpreting the provisions of section 24 of the Indian Income-tax Act, 1922. However, a circular issued by the Central Board of Revenue clarified that speculation losses should be adjusted against speculation profits before allowing other losses to be set off. The High Court held that the taxing authorities and the Tribunal were unjustified in denying the set-off of carried forward losses against the speculation profit for the relevant year, based on the circular's provisions. In conclusion, the High Court ruled against the revenue, stating that the set-off of carried forward losses of speculation business against the speculation profit for the assessment year 1958-59 should have been allowed, as per the circular issued by the Central Board of Revenue. The court highlighted that the circular was not presented to the taxing authorities or the Tribunal during the initial proceedings.
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