| Case ID |
4299a2f7-e2da-442d-b6f7-45a5fba7b83f |
| Body |
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| Case Number |
IT REFERENCE No. 29 OF 1956 |
| Decision Date |
Sep 03, 1956 |
| Hearing Date |
|
| Decision |
The court ruled that the assessee was not entitled to deduct speculative losses from business profits under section 24(1) of the Income-tax Act, 1922. The court emphasized that the computation of profits and gains must precede any consideration for set-off. The proviso to section 24(1) restricts the ability to account for speculative losses except when there are profits from another speculative business. Hence, the assessee's claim to set off was rejected, reinforcing the interpretation of the Income-tax Act regarding speculative transactions. |
| Summary |
In the case of Keshavlal Premchand v. Commissioner of Income Tax, the Bombay High Court addressed the complex issue of set-off of losses in speculative transactions under the Income-tax Act. The court highlighted that losses incurred in speculative businesses cannot be set off against profits of the same business unless profits are derived from another speculative source. This ruling clarifies the legal framework surrounding speculative losses, emphasizing the need for clear computation of profits before any set-off can be claimed. The decision is pivotal for taxpayers engaged in speculative trading, as it delineates the boundaries for loss claims and reinforces compliance with the provisions of the Income-tax Act. The case references several precedents, providing a comprehensive understanding of the legal landscape concerning income tax and speculative losses, which is crucial for legal practitioners and taxpayers alike. Keywords such as 'Income-tax Act', 'speculative losses', 'set-off', and 'Bombay High Court' are integral for understanding the implications of this ruling. |
| Court |
Bombay High Court
|
| Entities Involved |
Not available
|
| Judges |
Chagla, C.J.,
Tendolkar, J.
|
| Lawyers |
N.A. Palkhivala,
B.A. Palkhivala,
G.N. Joshi
|
| Petitioners |
Keshavlal Premchand
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1957 SLD 172,
(1957) 31 ITR 7
|
| Other Citations |
CIT v. Murlidhar Mathurawalla [1948] 16 ITR 146,
Mohanlal Hiralal v. CIT [1952] 22 ITR 448,
CIT v. C.P. Syndicate [1952] 22 ITR 493,
CIT v. Hira Mall Narain Dass [1953] 24 ITR 199,
Parasram Jethanand v. CIT [1956] 29 ITR 818,
Mishrimal Gulabchand of Bewar, In re [1950] 18 ITR 75,
Raghunath Prasad v. CIT [1955] 28 ITR 45
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
73,
24(1)
|