R. S. PATHAK J. - The assessee, which is registered firm, carried on business in grain and also entered into certain transactions in respect of sarson. During the assessment proceedings for the assessment year 1957-58, the assessee claimed that the losses form the transactions in sarson should be adjusted against the profits from its other business. It alleged that the adjustment should be allowed because the transactions were hedging transactions. The Income-tax Officer, however, found that the transactions were not hedging transactions but were speculative transactions and by reference to the proviso to section 24(1) held that the assessee was not entitled to an adjustment of the losses form those speculative transactions against the profits of the other business. This finding was upheld by the Appellate Assistant Commissioner and thereafter by the Income-tax Appellate Tribunal. The Appellate Tribunal has, upon these facts referred the following question :
'Whether on a true interpretation of sub-section (1) of section 24 of the Indian Income-tax Act, the losses of Rs. 6,129 and Rs. 20,471 suffered by the assessee in speculative transactions could be set off against the assessees income from non-speculative business ?'
We have held in Jagannath Mahadeo Prasad v. Commissioner of Income-tax (Income-tax Reference No. 130 of 1960, decided on April 14, 1964), that an assessee is entitled to an adjustment of speculative losses against the profits from the other business in the computation of income, profits and gains under section 10(1) and that the Income-tax Officer is not entitled to disallow the claim to such adjustment by reference to the proviso to section 24(1). We accordingly answer the question in the affirmative.
A copy of this judgment under the seal of the court and the signature of the Registrar shall be sent to the Appellate Tribunal. The assessee shall be entitled to its costs which we assess at Rs. 100. Counsels fee is assessed at Rs. 100.
Question answered in the affirmative.