Judgement

SABYASACHI MUKHARJI, J.:- This is an appeal from the judgment and order of the High Court of Allahabad dated 25th February, 1971. The assessee is a partnership firm which at the relevant time enjoyed the status of a registered firm for the assessment years 1960-61, 1961-62 and 1962-63. In the assessment proceedings for the assessment year 1960-61, the assessee suffered a loss of Rs. 60,054/- in the speculation business which was to be carried forward for adjustment against speculation profits of future years. For the assessment year 1961-62 also, the assessee had suffered a loss amounting to Rs. 6,839/- in speculation business and this was also to be carried forward for adjustment against speculation profits of future years. For the assessment year 1962-63 which is the year with which this appeal is concerned, the assessee made a profit of Rs. 58,102/- from speculation business. In the assessment proceedings for that year the assessee claimed that a loss of Rs. 60,054/- suffered in respect of the assessment year 1960-61 and the loss of Rs. 6,839/- suffered in respect of the assessment year 1961-62 should be set off against this speculation profit of Rs. 58,102/- for this year. If that had been done, the speculation profits of the year under consideration would have been absorbed completely by the losses brought forward from the preceding years.

2. The Income-tax Officer, however, rejected the assessees claim. He held that as the assessee was a registered firm, the losses could only be carried forward and set off only by the partners and not by the firm. The appeal by the assessee before the Assistant Appellate Commissioner was dismissed. The assessee went up in appeal to the Tribunal. The Tribunal held that the right to carry forward the losses relating to the assessment years 1960-61 and 1961-62 was governed by the Income-tax Act, 1922 (hereinafter called the 1922 Act) and that S. 75(2), Income-tax Act, 1961, which was applicable to the assessment year 1960-61 had no application to the facts of this case. The Tribunal was of the view that when an Act was passed repealing an earlier enactment, it could not be said to supersede any right already accrued under the repealed enactment unless there was something in the repealing Act to indicate that clearly. The Tribunal, therefore, held that the assessee was entitled to have the losses brought forward from the preceding two years and set off against the profits earned for the year 1962-63 and accordingly allowed the appeal.

3. The revenue sought for reference to the High Court of Allahabad on the following question :

"Whether, the assessee is, in law, entitled to set off of the speculation losses suffered in the assessment years 1960-61 and 1961-62, against the speculation profits of the previous year?"

4. The High Court considering the provisions of S. 75 of 1961 Act came to the conclusion that a right had accrued to the assessee by virtue of 1922 Act which entitled him to have the losses from speculation business in respect of the assessment year 1960-61 and 1961-62 to be carried forward and set off against the profits in speculation business of future years. The High Court was of the view that that was a right which had accrued to it before the 1961 Act was brought into force. The High Court came to the conclusion that by virtue of S. 6, General Clauses Act, that right continued to subsist. The High Court, therefore, was of the view that the Tribunal was right in holding that the assessee was entitled to set off the speculation losses suffered in the assessment years 1960-61 and 1961-62 against the speculation profits of the previous year 1962-63.

5. In appeal on behalf of the revenue before us, it was contended that the High Court was in error. Our attention was drawn to the provisions of S. 24(2) of 1922 Act which, inter alia, provided that where any assessee sustained any loss of profits or gains in any year, being a previous year not earlier than the previous year for