Speculative loss claim rejected for lack of reliable contemporaneous records; evidentiary insufficiency treated as a factual finding.

A claim to set off speculative loss failed because the assessee did not produce reliable contemporaneous records, including a complete sauda bahi or equivalent record of all speculative transactions. The authorities treated the defect as evidentiary: vouchers alone did not prove that the full transaction set, including profit-making trades, had been disclosed, and prior acceptance of similar accounts in earlier years did not bind the Department. On those facts, rejection of the loss claim was upheld as a factual finding, and no question of law was held to arise.

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Issues: Whether the assessee had shown a question of law arising from the disallowance of speculative loss claimed under section 66(2), and whether the authorities were justified in rejecting the loss claim for want of reliable supporting records.

Analysis: The application turned on whether the assessee had proved the speculative loss as a matter of fact. The authorities found that no contemporaneous sauda bahi or comparable record of all speculative transactions was maintained, and that the vouchers produced did not establish that the full set of transactions, including profit-making transactions, had been disclosed. The absence of regular and complete records was relevant in judging the truth of the claim, and earlier acceptance of similar accounts in other years did not create estoppel against the Department. On these facts, the refusal to accept the claimed loss was based on evidentiary insufficiency and not on any arbitrary estimate of profits.

Conclusion: No question of law arose. The disallowance of the speculative loss claim was upheld, and the application failed.

Ratio Decidendi: Where an assessee seeks to set off speculative loss, the burden lies on the assessee to prove the loss by reliable and contemporaneous records, and a finding that such proof is lacking is ordinarily a finding of fact, not a question of law.

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