NAVNITLAL AMBALAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) AT the instant of the assessee the Tribunal has referred to us under section 66(1) of the Indian Income -tax Act, 1922, the following question for our determination :

(2.) AMBALAL Narsidas, 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 by the Income -tax Officer to be carried forward in earlier years and has been brought forward by the assessee to this year.

(3.) 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 the provisions of section 6 and 10 thereof. On a plain reading of the circular, to which our attention is invited, the question referred to us can be answered without discussing the provisions of the statue. We may point out that a Division Bench of this court in the case of Tata Iron and Steel Co. Ltd. v. N. C. Upadhyaya has pointed out that the circulars issued by the Board would be binding on the Income -tax Officers and must be given effect to by this court. However, a note of caution was struck by the court by observing that the binding nature of circulars issued by the Central Board of Revenue must be confined to tax laws and that also for the purpose of giving administrative relief to the taxpayer and not for the purpose of imposing a burden on him. If such is the effect to be given to the circular then we have to consider whether on the basis of the circular relied upon, it is possible for us to answer the question without going into the provisions of section 24 and the other relevant sections. On September 12, 1960 (Circular No. 23 (XXXIX -4) D of 1960) bearing No. F.No. 4 (124) -60/TPL. C.B.R. was issued. This circular relates to adjustment of speculation profits in the current year against the carried forward speculation loss. The relevant part of the circular is as under :