Set-off of business losses against speculation profits allowed where the statute imposes no express bar on such adjustment.

Normal business losses, including brought forward losses, were held to be set off against profits of speculation business because the Income-tax Act creates only an express restriction on setting off speculation losses against non-speculation income. Section 70(1) permits intra-head set-off between sources under the same head, and Section 72(1) allows carry forward of non-speculation business losses against business profits generally. Although Explanation 2 to Section 28 treats speculation business as distinct, that distinction cannot be extended beyond the statute's express limits, and no additional bar can be read in by implication. The contrary view was treated as unsustainable.

---

---

Issues: Whether normal business losses, including brought forward losses, can be set off against profits of speculation business.

Analysis: The statutory scheme distinguishes speculation business from other business only to the extent expressly provided. Section 73 restricts the set-off of losses in speculation business against non-speculation income, but it does not create a corresponding bar against setting off normal business losses against speculation profits. Section 70(1) permits intra-head set-off of losses from one source against income from another source under the same head, and Section 72(1) allows carry forward of non-speculation business losses against business profits generally. Explanation 2 to Section 28 treats speculation business as distinct, but that distinction cannot be extended beyond the express restriction in the statute. In taxing statutes, nothing can be added by implication, and a casus omissus cannot be supplied by interpretation.

Conclusion: Normal business losses were allowable to be set off against speculation business profits, and the contrary view of the lower authorities was unsustainable.

---