TMI Blog1975 (7) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, has income from speculative transactions, business in ready shares and dividends. He has been assessed in the status of an individual. For the assessment year 1958-59, according to the profit and loss account for the relevant year, the loss that the assessee had suffered was shown at Rs. 6,866. This amount of Rs. 6,866 was arrived at after deducting from the total loss the dividend income of Rs. 51,274 and speculation profit of Rs. 11,369. The total loss without deducting those two items of dividends and speculation profit was Rs. 69,509. Even in the earlier years the assessee was carrying on speculation business and had suffered heavy losses in speculation business. The unabsorbed speculation loss of Rs. 68,224 was allowed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year, according to the Appellate Assistant Commissioner, the speculation profit had to be amalgamated with the profit in the ready transactions and only if there was resultant profit, the question of set-off of loss carried forward from earlier years would then arise. The order of the Appellate Assistant Commissioner was confirmed in further appeal by the Tribunal. The Tribunal construed the provisions of section 24 of the Indian Income-tax Act, 1922, and observed that the section provided for set off of loss under one head against profits or gains under any other head. The provisions of the said section, according to the Tribunal would come into operation only after the provisions of section 10 were exhausted for computation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst this order of the Tribunal that the assessee has asked for reference to this court for determination of the question above referred to. At the outset it may be stated that Mr. Patil, counsel for the assessee and Mr. Joshi, counsel for the revenue, have drawn our attention to a circular of the Board of Revenue which gives guidelines for answering the question referred to. It may, however, be plainly stated that before none of the taxing authorities and the Tribunal, was this circular cited or brought to their notice. If the circular to which our attention has been drawn is sufficient to decide the question then it is unnecessary for us to consider and construe the provisions of section 24 of the Indian Income-tax Act, 1922, read with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r year before allowing any other loss to be adjusted against those profits. Board's decision: The suggestion is acceptable. For the purpose of set-off under section 10 and section 24(1) the speculation loss of any year should first be set off against the speculation profits of that year and the remaining amount of speculation profits, if any, should then be utilised for setting off of any loss of that year from other sources. For the purposes of section 24(2) the Income-tax Officer may allow the assessee- (i) either to first set off the speculation losses carried forward from an earlier year against the speculation profits of the current year and then to set off the current year's losses from other sources against the remaining part, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peculation losses of the earlier years and if that is done, then the question referred to us shall have to be answered against the revenue. Applying the provisions of the above circular of the Central Board of Revenue, we hold that the taxing authorities and the Tribunal were not justified in refusing to allow the set-off of carried forward losses of speculation business against the speculation profit of Rs. 11,369 of the assessment year 1958-59. Thus, the question referred to us is answered in the negative and against the revenue. There will be no order as to costs since the provisions of this circular were not brought to the notice of any of the taxing authorities or the Tribunal when the assessee's matter was heard by them. - - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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