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TMI Blog2010 (5) TMI 870X X X X Extracts X X X X X X X X Extracts X X X X ..... ed speculation loss of ₹ 4,55,30,494/- relating to the assessment year 2001-02 against the speculation income for the current year. 3. The facts giving rise to the controversy briefly are these. In the assessment year 2001-02, the assessee suffered loss in the speculation business amounting to ₹ 4,55,30,494/-. There is no dispute that this loss was allowed to be carried forward to the subsequent years under section 73(2) of the Income Tax Act. In the return filed for the year under appeal which is the assessment year 2006-07, the assessee claimed that the speculation loss brought forward from the assessment year 2001-02 should be set off against the speculation profits for the year under appeal. The Assessing Officer however ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken away only by express language or by necessary implication. This is settled by the decision of the Privy Council in Delhi Cloth General Mills Company Ltd. Vs. Income Tax Commissioner, AIR 1927 (PC) 242 and the same has been cited with approval by the Supreme Court in the case of Jose Dacosta Vs. Bascora Sadashiv Sinai Narcomin, AIR (1975) SC 1843. In CIT, UP Vs. Shah Sadiq Sons, (1987) 166 ITR 102, the Supreme Court was concerned with section 24(2) of the Income Tax Act, 1922, which provided for a right to set off speculation losses against speculation profits and it further stated that to the extent the speculation loss could not be absorbed, the assessee had a right to carry forward the losses for the future years to be set off aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In our opinion, the right given to the assessee for the assessment year 1961-62 under section 24(2) of the 1922 Act was an accrued right and a vested right. It could have been taken away expressly or by necessary implication. It has not been so done. Neither section 297(2)(b) nor any other sub-clauses of sub-section (2) of section 297 indicates a contrary intention of the Legislature regarding any vested right of the assessee under the 1922 Act. On the contrary, section 6(c) of the General Clauses Act indicates that that right should be preserved. Again at page 109 of the report, the Supreme Court observed as under:- The fact that the right created by the operation of section 24(2) is a vested right cannot, in our opinion, be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpressly. This is the principle behind section 6(c) of the General Clauses Act, 1897. The right to carry forward losses which had accrued under the repealed Income-tax Act of 1922 is not saved expressly by section 297 of the Income Tax Act, 1961. But it is not necessary to save a right expressly in order to keep it alive after the repeal of the old Act of 1922. Section 6(c) saves accrued rights unless they are taken away by the repealing statute. We do not find any such taking away of the rights by section 297 either expressly or by implication. It was ultimately held that the assessee was entitled to set off the speculation losses brought forward from the assessment years 1960-61 and 1961-62 against the speculation profits for the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion loss quantified in any assessment year before the assessment year 2006-07. The Income Tax Rules which prescribe the return form for individuals having proprietary business (ITR 4) also makes a distinction between the loss brought forward and loss to be carried forward. Reference may be made to page 1.369 of the Income Tax Rules by Taxman (2009 - 46th Edition). In Schedule BFLA, the assessee is required to give details of income after set off of brought forward losses of earlier years . Schedule CFL requires the assessee to give details of losses to be carried forward to future years . Herein we are concerned with the assessee s right to set off the brought forward speculation losses against the speculation profits for the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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