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TMI Blog1987 (4) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessment year 1961-62 also, the assessee had suffered a loss amounting to Rs. 6,839 in the speculation business and this was also to be carried forward for adjustment against the speculation profits of future years. For the assessment year 1962-63, which is the year with which this appeal is concerned, the assessee made a profit of Rs. 58,102 from speculation business. In the assessment proceedings for that year, the assessee claimed that the loss of Rs. 60,054 suffered in respect of the assessment year 1960-61 and the loss of Rs. 6,839 suffered in respect of the assessment year 1961-62 should be set off against this speculation profit of Rs. 58,102 for this year. If that had been done, the speculation profits of the year under consideration would have been absorbed completely by the losses brought forward from the preceding years. The Income-tax Officer, however, rejected the assessee's claim. He held that as the assessee was a registered firm, the losses could be carried forward and set off only by the partners and not by the firm. The appeal by the assessee before the Appellate Assistant Commissioner was dismissed. The assessee went up in appeal to the Tribunal. The T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness, profession or vocation, and the loss could not be wholly set oft under sub-section (1) of section 24 of the said Act, so much of the loss as was not so set off or the whole loss where the assessee had no other head of income could be carried forward in the manner indicated therein. So, therefore, the 1922 Act gave a right to set off speculation losses against the speculation profits and to the extent it was unabsorbed, it had a right to carry forward the losses for the future years to be set off against speculation profits of future years. It was admitted that in a way it was a vested right-a right on assessment to set off the losses against the profits of the year in question and if not fully absorbed, to carry it forward to be set off against the profits of future years. It was submitted on behalf of the Revenue that it, therefore, continued so long as the Act permitted the setting off in that manner. It was, however, urged that in view of the coming into operation of the 1961 Act which came into operation on 1st of April, 1962, that right no longer was there with the assessee. Section 75 of the 1961 Act provided an entirely new scheme. It was as follows: " 75. Losses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of the operation of the 1922 Act and the rights which might have been created under it. Inasmuch as section 297(2) of the 1961 Act did not save, said the Allahabad High Court, the right, if any, of a registered firm to set off its speculation losses, which have been carried forward, against the speculation profits of the firm, the right, if any, created by section 24(2) could not be said to remain intact after the repeal of the 1922 Act. Speculation losses of years anterior to 1962-63 could not, therefore, be carried forward and set off against speculation profits of a registered firm. The Allahabad High Court, considering the decision of this court in State of Punjab v. Mohar Singh, AIR 1955 SC 84, observed that the principle laid down by this court was that where the repealing provision indicated the effect of repeal on previous matters and provided for the operation of the previous law in part and in negative terms as also for the operation of the new law in other part in positive terms, the repealing and the saving provision could be said to be a self-contained Act. While we respectfully agree with the principle applicable in interpreting the application of the Act, we are o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be understood in the background of the facts of that case which are different from the instant case and the provisions with which we are concerned. That was not case of deciding whether the vested right was curtailed and, if so, to what extent. This court in Karimtharuvi Tea Estate Ltd. v. State of Kerala [1966] 60 ITR 262, observed that it was well-settled that the Income-tax Act as it stands amended on the first day of April of any financial year must apply to the assessment of that year. Any amendments in that Act which came into force after the first day of April of a financial year, would not apply to the assessment for that year, even if the assessment was actually made after the amendments came into force. There, the Kerala Surcharge on Taxes Act, 1957, having come into force on September 1, 1957, being the date appointed by the Kerala Government under section 1(3) of the Act, and not being retrospective in operation, by express intendment or necessary implication, could not be made applicable from April 1, 1957. Since the Act was not the law in force on April 1, 1957, no surcharge on agricultural income-tax could be levied under that Act in respect of the assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of that case. It suffices to say that the discontinuance of the assessee's business in that case took place on February 28, 1962. It could not be disputed that if the 1961 Act had not come into effect, the assessee would have been entitled to get the relief as granted by virtue of section 25(3) of the 1922 Act. It was observed that on a reading of section 6 of the General Clauses Act, 1897, it was clear that unless contrary intention appears, the repeal of an Act does not affect any existing right, privilege, obligation or liability. It is, therefore, necessary to find out from the provisions of section 297 of the 1961 Act which repeals the 1922 Act, whether the old rights and liabilities have been intended to be destroyed. There was no corresponding provision under the 1961 Act dealing with the type of claims mentioned in sub-section (3) or (4) of section 25 of the 1922 Act. It was contended by the Revenue that what was not said was destroyed and such intention would be apparent in that case from section 297(2)(h) of the 1961 Act. The High Court referred to the 12th Report of the Law Commission, and speaking for the court, one of us (Sabyasachi Mukharji J.) said that it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. We are, therefore, of the opinion that the Allahabad High Court was in error in the view it took in the decision in CIT v. Mangiram Gopi Chand [1978] 111 ITR 807, but the High Court of Allahabad was right in the judgment under appeal and the question was properly answered. The assessee in person did not appear at the time of the hearing of this appeal. We requested Shri D. Chandrachud to assist us as amicus curiae. We record that Shri Chandrachud has rendered very able assistance to us in disposing of this appeal. This court records its appreciation of the help rendered by him. The appeal in the premises fails and is dismissed with costs assessed at Rs. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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