Voluntary disclosure income remains taxable under the Income-tax Act; barred speculation loss cannot be set off against disclosed business income.

Income voluntarily disclosed under the special disclosure scheme remained chargeable under the Income-tax Act, and the disclosed amount had to be computed in accordance with that Act in reassessment. The scheme did not allow the assessee to import a deduction otherwise barred by law or to alter the statutory computation of income. As a result, speculation loss could not be set off against the disclosed business income, and the issue was answered against the assessee.

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Issues: Whether speculation loss could be set off against business income disclosed under the voluntary disclosure scheme notwithstanding the prohibition in section 73(1) of the Income-tax Act, 1961.

Analysis: The disclosure scheme was held to operate on income that was already chargeable to tax under the Income-tax Act. The information in the declaration could be taken into account in reassessment proceedings, and the income disclosed had to be taxed in its entirety when the deduction sought was not permissible under the Act. The scheme did not permit the assessee to alter the computation of income by importing a deduction barred by the Income-tax Act.

Conclusion: Speculation loss could not be set off against the disclosed business income; the question was answered in the negative and against the assessee.

Ratio Decidendi: Income voluntarily disclosed under the special disclosure scheme remains chargeable according to the Income-tax Act, and impermissible deductions cannot be deducted from such disclosed income in reassessment.

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