Judgment

BHARGAVA, J. : The respondent is a firm which, for purposes of assessment under the Income-tax Act (hereinafter referred to as the Act"), was registered under Section 26-A of the Act during the assessment years 1958-59, 1959-60, and 1960-61. The respondent was earning income from property, ready business in kappas, and also from speculation business carried on an extensive scale. During the assessment year 1958-59, the income from property was assessed at Rs. 1,369 and from ready business at Rs. 28,449. There was a loss of Rs. 6,26,606 in the speculation business. The Income-tax Officer. in making the assessment for that year charged tax on the total of the income from property and ready business which amounted to Rs. 29,818. The loss of Rs. 6,26,606 was not set off against this profit in view of the provisions of the first proviso to S. 24 (1) of the Act. This loss was, however, apportioned between the partners by the Income-tax Officer, purporting to act under the second proviso to the said sub-section. Similarly, in the next assessment year 1959-60, where there was income from property and loss in ready business as well as speculation business, no tax was imposed, as th