Carry-forward of speculative losses by a registered firm is denied where the later tax scheme reallocates the loss to partners.

The 1961 Income-tax Act displaced the earlier right to carry forward speculative losses where its transitional and set-off scheme applied. Although unabsorbed speculative losses under the 1922 Act were treated as substantive rights, section 75 required losses of a registered firm to be apportioned to partners, and only partners could then carry forward and set off such losses under section 73. Section 297(2) operated as a self-contained repeal and saving code, so the earlier right under section 24(2) was not preserved for the firm beyond what the new Act expressly saved. The reference was answered against the assessee and in favour of the Revenue.

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Issues: Whether speculative losses incurred in assessment years governed partly by the repealed Income-tax Act, 1922, could, after the Income-tax Act, 1961 came into force, be carried forward and set off against the speculation profits of a registered firm for assessment year 1964-65.

Analysis: Under the 1922 Act, the right to carry forward unabsorbed speculative losses was treated as a substantive right. However, the 1961 Act made a specific provision for registered firms in section 75, under which losses not set off against the firm's income are to be apportioned between the partners, and only the partners are entitled to carry forward and set off such losses under section 73. The saving principle in section 6(c) of the General Clauses Act applies only unless a different intention appears. Section 297(2) of the 1961 Act is a self-contained repeal and saving code, and its scheme shows that, for matters covered by it, the old law is not carried forward as such where the new Act provides otherwise. The earlier right under section 24(2) of the 1922 Act therefore could not survive unchanged so as to allow the registered firm itself to carry forward the speculative losses under the new regime.

Conclusion: The question was answered in the negative. The speculative losses could not be carried forward and adjusted by the registered firm under the 1961 Act, and the result was in favour of the Revenue.

Final Conclusion: The reference was disposed of by holding that the repeal of the 1922 Act and the scheme of the 1961 Act prevented the assessee-registered firm from claiming carry forward and set-off of the speculative losses in the manner asserted.

Ratio Decidendi: Where a repealing and saving provision in a later Act forms a self-contained code and manifests an intention to govern the transitional field, the earlier accrued right is not preserved beyond the extent expressly saved, and the new statutory scheme prevails.

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