TMI Blog1960 (9) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... in zinc and tin ingots which did not involve and which was definitely not even intended to involve any delivery of the goods. The transactions were settled by mere payment of differences. On this point there is no dispute, and the Income Tax Officer definitely found on the basis of the correspondence that was placed before him that these transactions were of a speculative kind. The officer held that the loss in such speculative transactions could be set off only against profits in similar speculative transactions and could not be set off against other income. This view was confirmed both by the Appellate Assistant Commissioner and by the Tribunal when the matter was carried in appeal to it. On the application of the assessee the following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articular decision in question in Keshavlal Premchand v. Commissioner of Income Tax. In dealing with this decision, Kanga in his Income Tax Act (at page 600) observes : The question, however, remains whether such a loss in a business consisting of speculative transactions can be adjusted or set off against profits in any other non-speculative business, profession or vocation under section 10 itself. It is submitted that such a loss can be so adjusted or set off and to such a case this proviso would have no application at all. The words of the proviso, apart from the context, are wide enough to cover such a case. But the proviso would nevertheless not apply because where a loss in any business is sought to be adjusted or set off against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and gains of a business, profession or vocation for the purpose of section 24(1) because that had already been done under section 10(2). If it was intended to convey by the proviso that the resultant loss in the business had to be ascertained, then the language used by the legislature would have been very different from the language actually used. Mr. Palkhivala wants to paraphrase the proviso to mean that in the loss suffered in a business if there is any loss due to a speculative transaction then that loss cannot be set off against another head. Now, to do this is not to paraphrase the proviso but to rewrite it and to substitute an entirely different provision for what the legislature has done. It is clear, therefore, on the language of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere a proviso can be construed to operate beyond the main section. 6. It is clear, therefore, that the view taken by the department can be supported by authority. We find ourselves in respectful agreement with the view taken by Chagla C.J. of the scope of the proviso. Even if the principal part of section 24(1) is not invoked by the assessee for the purpose of the set-off and he seeks to rely upon the adjustment of profits and losses under the main head of business by the computation of income under section 10 of the Act, this proviso controls such adjustment for the reason that it directs that in effecting such computation of profits under the head of business, losses sustained in speculative transactions shall be dealt with in a specia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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