1972 (7) TMI 14

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..... 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 business and the Income-tax Officer, on assessment, determined the loss at Rs. 40,510. For the assessment year 1965-66 the assessee declared a profit of Rs. 6,902 from the speculation business, but on assessment, the Income-tax Officer fixed the loss at Rs. 598. For the assessment year 196 .....

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..... side 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 provided that where the net result for any assessment year in respect of any source of income other than capital gain is a loss, the said loss is allowed to be set off against his income from any other source under the same bead. In section 71 it is provided that, in respect of a loss which .....

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..... 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 partners. In other words, it is contended that this provision is intended only as a prohibition against double relief in respect of the same loss in the hands of the same assessee and that, if the loss has been apportioned between and allowed to be carried forward by the partners, to avoid do .....

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