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TMI Blog1972 (7) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 256(1) of the Income-tax Act, 1961 : " Whether, on the facts and in the circumstances of the case, and on a true interpretation of the various provisions of the Income-tax Act, 1961, the Tribunal was correct in holding that a registered firm was not entitled to have its losses in speculation business carried forward for set off against future profits in speculation business? The following are the facts: The assessee is a registered firm carrying on business in hill produce, cocoanut oil, etc. at Palai, Cochin and Alleppey, Apart from regular trade in these commodities, the assessee was also carrying on a business in speculation. For the assessment year 1964-65 the assessee declared a loss of Rs. 33,013 relating to speculation busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness loss of the assessee's-firm should have been carried forward and set off against its future speculation business profits and should not have been apportioned among its partners as was done by the Income-tax Officer. On second appeal by the department, the Appellate Tribunal set aside the order of the Appellate Assistant Commissioner and restored that of the Income-tax Officer. Aggrieved by that decision, the assessee applied for reference and it is under these circumstances that this question has come up for consideration. In this connection it has to be noted that in sections 70 to 75 provision is made in the Act for set-off and carry-forward of loss incurred by the assessees under various heads of income. In section 70 it is prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned between the partners of the firm, and they alone shall be entitled to have the amount of the loss set off and carried forward for set off under sections 70, 71, 72, 73 and 74. (2) Nothing contained in sub-section (1) of section 72, sub-section (2) of section 73, or sub-section (1) of section 74 shall entitle any assessee, being a registered firm, to have its loss carried forward and set off under the provisions of the aforesaid sections." Sub-section (2) clearly applies to the assessment in this case. But, it is contended that sub-section (2) must be read along with and as part of sub-section (1) and, so reading, the field of operation of sub-section (2) should be limited to those cases where loss has been apportioned between the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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