1. The question that we have to consider and decide in this reference lies in a very narrow compass, although it has given rise to a very interesting debate at the Bar. There was a loss of Rs. 19,723 in a speculative business carried on by the assesses in the year of account and the assessees contention was that he was entitled to take this loss into account in arriving at the profits and gains of his business.

The Taxing Department rejected that contention on the ground that by reason of the first proviso to Section 24(1), Income-tax Act the assessee was not entitled to take into consideration a speculative loss, and that contention has been upheld by the Tribunal. The assessee also had raised an issue before the Tribunal that this was not a speculative loss, but that issue has not been pressed before us by Mr. Palkhivala.

2. Now Section 24(1) deals with set off of a loss in computing aggregate income and, as is now well settled, the scheme of that section is to entitle an assessee to claim a set off in respect of a loss under one head against a profit under another head, and the proviso to that section which was incorporated in the Income-tax Act in 1953 is to the followi