Taxability of wagering income confirmed: illegal or speculative business receipts remain within income-tax assessment.

Profits from wagering or other illegal speculative business are taxable if they fall within the charging provisions and statutory heads of income. The illegality of the activity does not keep the receipts outside income-tax assessment, and the character of a transaction under the Contract Act does not control taxability under the Income-tax Act. Wagering profits are therefore assessable, and wagering losses are also relevant in computation where the statute so requires.

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Issues: Whether profits or losses arising from wagering contracts are to be taken into account in an assessment for income-tax purposes.

Analysis: The income-tax charge extends to profits arising from business, and the illegality of the activity does not exclude it from taxation. A speculative or gaming venture remains business in substance, and the statutory heads of income cover such profits. The question whether a transaction is gaming or speculative under the Contract Act does not control taxability under the Income-tax Act.

Conclusion: The question was answered in the affirmative. Profits arising from wagering contracts are taxable, and losses from such contracts are also relevant in assessment.

Final Conclusion: Income arising from wagering or other illegal speculative business is not exempt from assessment merely because the underlying activity is unlawful.

Ratio Decidendi: Income derived from an illegal or wagering business is taxable if it falls within the statutory heads of income, because illegality does not take the receipts outside the charging provisions of the Income-tax Act.

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