Set-off proviso under section 24(1) limits aggregation of losses, not computation of business income under section 10.

Section 10 of the Indian Income-tax Act, 1922 governs computation of business profits, while section 24(1) applies later, at the stage of setting off losses against income under other heads in determining total income. The proviso to section 24(1) was treated as a limitation on the set-off mechanism alone and not as a restriction on the computation of business income under section 10. On that basis, speculative loss could be set off against profits from another business activity only to the extent permitted by the proviso when section 24(1) was applied.

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Issues: Whether the proviso to section 24(1) of the Indian Income-tax Act, 1922 restricted the assessee from setting off a speculative loss against profits from another business while computing income under section 10(1).

Analysis: Section 10 governs the computation of profits and gains under the head "business, profession or vocation", whereas section 24(1) operates at the later stage when losses under one head are set off against income under another head in arriving at total income. The proviso in question was held to be a limitation on the set-off mechanism under section 24(1), and not a restriction on the computation of business profits under section 10. The speculative loss was therefore not to be taken into account beyond the extent permitted by the proviso when section 24(1) was applied.

Conclusion: The proviso to section 24(1) did not govern computation under section 10(1); the speculative loss could be set off against profits from another business activity, and the question was answered in the affirmative.

Ratio Decidendi: A proviso to the set-off provision in section 24(1) of the Indian Income-tax Act, 1922 cannot be treated as qualifying the computation of business income under section 10; it only limits the set-off available at the stage of aggregation of total income.

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