COMMR OF INCOME TAX Vs. JIWANMAL BHUTURIA

JUDGEMENT

(1.) This is a reference made at the instance of the Commissioner of Income-tax, West Bengal, under Section 66 (1) of the Indian Income-tax Act in which the following question has been framed for the opinion of the Court:

(2.) The assessee carried on business in silver, hessian, jute etc. and also had a money-lending business. The assessment year in question is the year 1941-42. The profit on the silver business was computed at Rs. 26801/- but in the jute hessian etc business there was a loss of Rs. 18228/-. The profits in these activities which are referred to as the speculation business for the assessment year was therefore Rs. 8573/-. The profit of the money-lending business during the assessment year was computed at Rs. 20087/-.

(3.) In the assessment year 1940-41 there was a loss in the silver business amounting to Rs. 30435/- which was carried forward to the 1941-42 assessment year. After deducting the profit of Rs. 8573/- in what was called the speculation business from the loss thus carried forward there was still a loss of Rs. 21862/- The assessee claimed that this loss of Rs. 21862/- should not be carried forward to the next year, but it should be adjusted against the profit of Rs. 20087/- in the money-lending business for the assessment year. The Income-tax officer and the Appellate Assistant Commissioner did not allow the claim for the reason that the business of speculating in silver, jute, hessian etc., was not the same business as the money-lending business. The Appellate Tribunal however took a different view and found in favour of the assessee holding that the set off claimed by the assessee was permissible.