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TMI Blog1976 (4) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year for 1964-65, the firm claimed that the above speculation losses which had not been allowed to be set off against the income of the regular business for the relevant years should be set off against speculation profits of that year. The Income-tax Officer did not allow the claim. On appeal, the Appellate Assistant Commissioner allowed the claim and directed the Income-tax Officer to allow the set-off of the speculation losses of earlier years against speculation profits of 1964-65 and to carry forward the balance of losses to be set off similarly in subsequent years. The department filed an appeal against this order before the Tribunal. The Tribunal upheld the order of the Appellate Assistant Commissioner and now the Commissioner has come up to this court. Counsel for the department has contended that inasmuch as the claim for set-off was being made in the assessment year 1964-65, i.e., after the Income-tax Act, 1961, had come into force, the set-off could only be allowed in accordance with the provisions of section 75 of the Act. It has been contended that under section 75 of the Act, the losses have to be apportioned between the partners and they alone are entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " 24. Set-off of loss in computing aggregate income.--(1) Where any assessee sustains a loss of profits or gains in any year under any of the heads mentioned in section 6, he shall be entitled to have the amount of the loss set off against his income, profits or gains under any other head in that year : Provided that in computing the profits and gains chargeable under the head ' Profits and gains of business, profession or vocation ', any loss sustained in speculative transactions which are in the nature of a business shall not be taken into account except to the extent of the amount of profits and gains, if any, in any other business consisting of speculative transactions :.... (2) Where any assessee sustains a loss of profits or gains in any year, being a previous year not earlier than the previous year for the assessment for the year ending on the 31st day of March, 1940, in any business, profession or vocation, and the loss cannot be wholly set off under sub-section (1), so much of the loss as is not so set off or the whole loss where the assessee had no other head of income shall be carried forward to the following year, and (i) where the loss was sustained by him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 922, did not take away the vested right of the assessee to set off the speculation losses of the firm against speculative profits of the firm in the years subsequent to the enforcement of the 1961 Act. It was also contended that the Act of 1961 did not bring about any such drastic change as would make the principle laid down by the Supreme Court in the case of Commissioner of Income-tax v. Kantilal Nathuchand Sami [1967] 63 ITR 318 inapplicable to the case of a registered firm. It is indisputable that in view of the pronouncement of the Supreme Court in the case of Commissioner of Income-tax v. Kantilal Nathuchand Sami [1967] 63 ITR 318, a registered firm could, so long as the 1922 Act was in force, carry forward speculation loss, if it could not be set off against speculation profits of the year in question. However, after the 1961 Act, specific provision by way of section 75 of the Act has been made in respect of losses of registered firm. Section 75 has already been extracted. A bare perusal of the section establishes that the loss of a registered firm, which cannot be set off against any other income has to be apportioned between the partners of the firm, and they alone are ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. Here the question is as to whether the repeal of the 1922 Act extinguished the right of carrying forward of the loss which had not been set off, and further as to whether such an amount could be set off against the speculative profits of the firm or be dealt with in accordance with section 75 of the new Act. This distinction applies to the decision of the Calcutta High Court in Commissioner of Income-tax v. Govindalal Dutta [1958] 33 ITR 630 for in that case too, no such question has arisen in the present case and as such that decision is hardly of any assistance. Mr. R. K. Gulati drew our attention to two other cases on this aspect of the controversy, Helen Rubber Industries v. Commissioner of Income-tax [1959] 36 ITR 544 (Ker) and Commissioner of Income-tax v. Helen Rubber Industries Ltd. [1962] 44 ITR 714 (SC). We do not think that any useful purpose will be served by referring to Helen Rubber Industries v. Commissioner of Income-tax [1959] 36 ITR 544 (Ker), as that decision on appeal was reversed by their Lordships of the Supreme Court in Commissioner of Income-tax v. Helen Rubber Industries Ltd. [1962] 44 ITR 714. The question that came up for consideration before the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court observed thus : " (10) Before proceeding to determine it, it is desirable to consider whether section 6, General Clauses Act, can be relied on. The position as regards section 6, General Clauses Act, in the case of repeal and re-enactment has been considered by this court in State of Punjab v. Mohar Singh, AIR 1955 SC 84, and laid down as follows at page 88 : ' Whenever there is a repeal of an enactment, the consequences laid down in section 6 of the General Clauses Act will follow unless, as the section itself says, a different intention appears. In the case of a simple repeal there is scarcely any room for expression of a contrary opinion. But when the repeal is followed by fresh legislation on the same subject we would undoubtedly have to look to the provisions of the new Act, but only for the purpose of determining whether they indicate a different intention. The line of enquiry would be, not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them. We cannot, therefore, subscribe to the broad proposition that section 6, General Clauses Act, is ruled out when there is repeal of an enactment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment in accordance with the provision of the new Act where the return is filed even in respect of years covered by the 1922 Act, after 31st, March, 1962. Under section 297(2)(a)(i) of the Act in cases covered by section 34 of the old Act, where notice had been issued before the commencement of the new Act, proceedings have to be continued as if the new Act had not been passed. On the contrary, under section 297(2)(d)(ii) where income chargeable to tax had escaped assessment and no proceedings under section 34 of the Act had been taken or were pending at the commencement of the Act, notice has to be issued under section 148 of the new Act, and the provisions of the new Act are to be applied to such proceedings. So far as imposition of penalty is concerned, section 297(2)(f) makes provision for imposition of penalty in accordance with the old Act, where assessment had been completed before the 1st April, 1962, while section 297(2)(g) provides for imposition of penalty in accordance with the new Act where the assessment is completed after the 1st April, 1962. Section 297(2)(h) is a deeming provision, by virtue of which any election or declaration made or option exercised by an asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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