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TMI Blog1967 (3) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... come from property, business in shares both ready and forward, dividends and shares of profit from the registered firm of Mahadevia Brothers. For the assessment year 1958-59 the assessee's income from business was assessed in the sum of Rs. 47,987. In the said assessment year the assessee had incurred a loss of Rs. 2,29,597 in its speculative business. The assessee claimed to set off the said loss against its profits from the non-speculative business. The claim was disallowed by the Income-tax Officer relying on the first proviso to section 24(1) read along with the Explanations to the said proviso. It was contended by the assessee that the first proviso to section 24(1) did not apply to a case of computation of the business income under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm a part of the profit or loss of the said business either by augmenting the losses in that business if there are losses or by reducing the profits, if there be profits. According to the Income-tax Officer and the Appellate Assistant Commissioner, therefore, this item of Rs. 16,200 also could not be allowed to be set off against the profits of the other business but it could only be allowed to be added to the speculative loss and the total loss allowed to be carried forward to be adjusted against the speculative profits in the subsequent years. The assessee appealed to the Tribunal against the order passed by the Income-tax Officer and confirmed in appeal by the Appellate Assistant Commissioner. Both the contentions, which it had urged b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of Rs. 16,200 against the business income. The Tribunal thus allowed the appeal partly disallowing the assessee's claim to set off an amount of Rs. 2,29,597 and allowing it to the extent of its claim to set off the amount of Rs. 16,200 against its business income. Both the assessee and the department applied under section 66(1) of the Income-tax Act for a reference and the Tribunal drew up a statement of the case and referred to this court the following two questions " 1. Whether, on the facts and in the circumstances of the case, in computing the income from business assessable under section 10, the loss in speculative transactions either in whole or to the extent of the other business income, could be set off against other business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 37 of 1962, decided on 8th February, 1967, on a proper interpretation of the first proviso read along with the two Explanations, speculative transactions carried on in the nature of business constitute a distinct and separate business, the income of which is required to be computed under section 10. The loss in speculative transactions carried on in the nature of business referred to in the first proviso to section 24 is the net computed loss under section 10 of the speculative business which is constituted of the speculative transactions carried on in the nature of business. The amount of Rs. 16,200 is admittedly interest paid on amounts borrowed for the purpose of carrying on the speculative transactions in the nature of business or, in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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