Set-off of speculative losses against business profits upheld in income computation, with section 24(1) proviso not barring the adjustment.

Speculative losses from sarson transactions were treated as adjustable against profits from the assessee's non-speculative business in computing income under section 10(1). The court held that the proviso to section 24(1) could not be used to disallow that set-off when computing business profits. The adjustment was therefore permitted, and the issue was answered in favour of the assessee.

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Issues: Whether losses from speculative transactions could be set off against profits from non-speculative business in the computation of income, and whether the proviso to section 24(1) could be used to disallow such adjustment.

Analysis: The assessee's claim arose in the computation of business income for the assessment year 1957-58. The transactions in sarson were treated as speculative transactions, and the question was whether the resulting losses could nevertheless be adjusted against profits from the assessee's other business. The Court applied its earlier view that such adjustment is allowable under section 10(1), and that the proviso to section 24(1) does not authorize disallowance of the set-off claimed in the computation of business profits.

Conclusion: The losses from speculative transactions were held to be adjustable against the profits of the assessee's non-speculative business, and the question was answered in the affirmative, in favour of the assessee.

Final Conclusion: The reference was answered for the assessee, with the speculative losses permitted to be adjusted in computing business income.

Ratio Decidendi: Speculative losses are allowable for adjustment against profits from other business in computing income under section 10(1), and the proviso to section 24(1) cannot be invoked to deny that set-off.

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