The loss of Rs.
Appeal from the judgment and order dated September 13, Appel from the judgment and order dated September 13,16, 1963 of the Gujarat High Court in Income tax Reference No.
5,416/ was also apportioned between the partners on the same basis as was done in the preceding assessment year 1958 59.
Sen, T. A. Ramachandran, S. P. Nayyar and R. N. Sachthey, for the appellant.
R. Chaudhuri, and K. Rajendra Chaudhuri, for the res pondent.
In addition, there was a profit of Rs.
Since this year there was a profit in speculation business, the first proviso to s. 24 1 did number apply, and the net income of the respondent was worked out by taking all the three figures into account.
The Income tax Officer, in making the assessment for that year, charged tax on the total of the income from property and ready business which amounted to Rs.
6,19,784/ in the speculation business.
6,26,606/ was number set off against this profit in view of the provisions of the first proviso to S. 24 1 of the Act.
On further appeal, the Income tax Appellate Tribunal, however, accepted the plea of the respondent and held that the speculation losses sustained by the respondent in the two preceding assessment years must be adjusted against the profit earned in the account year in question in speculation business.
The plea was that under the second proviso to s. 24 1 , this loss in speculation business companyld number be apportioned between the partners, and companysequently, under s. 24 2 , the respondent was entitled to carry forward this loss and to have it set off against the profit from speculation business under clause i of s. 24 2 .
Thereupon, at the request of the Commissioner of Income tax, the following question of law was referred by the Tribunal for opinion to the High Court of Gujarat Whether on the facts and in the circumstances of the case and on a true interpretation of the various provisions of the Indian Income tax Act, 1922, the Tribunal was companyrect in holding that speculation losses of the Respondent firm assessee firm for the assessment years 1958 59 and 1959 60 should be set off against its speculation profit of Rs.
Bhargava, J. The respondent is a firm which, for purposes of assessment under the Income tax Act hereinafter referred to as the Act , was registered under section 26A of the Act during the assessment years 1958 59, 1959 60, and 1960 61.
The respondent claimed that in the assessment of the respondents income in this year, the respondent was entitled to set off the speculation losses of the two preceding assessment years 1958 59 and 1959 60 against the profits earned from speculation business in this year, urging that the Income tax Officer in the two earlier years was wrong in apportioning the loss between the partners.
This loss was, however, apportioned between the partners by the Income tax Officer, purporting to act under the second proviso to the said subsection.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
During the assessment year 1958 59, the income from property was assessed at Rs.
The respondent was earning income from property, ready business in kappas, and also from speculation business carried on an extensive scale.
This plea was rejected by the Income tax Officer whose order was up held by the Appellate Assistant Commissioner.
676 of 1965.
28,449/ .
Further, the speculation loss of Rs.
6,19,784/ in its assessment for the assess ment year 1960 61.
2 of 1963.
Similarly, in the next assessment year 1959 60, where there was income from property and loss in ready business as well as speculation business, numbertax was imposed, as the loss in ready business exceeded the income from property.
1,014/ from property, and a loss of Rs.
1,239/ worked out on the basis of loss in ready business reduced by the income from property, was apportioned between the partners.
21,197/ from ready business.
1,369/ and from ready business at Rs.
6,26,606/ in the speculation business.
There was a loss of Rs.
The net loss of Rs.
In the assessment year 1960 61, there was an income of Rs.
29,818/ .
