AJIT K. SENGUPTA, J.

( 1 ) IN this reference under Section 256 (1) of the Income-tax Act, 1961, the following questions of law have been referred to this court for the assessment year 1985-86 :"1. Whether, on the facts and in the circumstances of the case and also on a proper interpretation of Sections 71 and 72 of the Income-tax Act, 1961, the Tribunal was correct in law in holding that the speculation profit of the current year would not be available for set off under Section 70 of the Income-tax Act, 1961, against the current business loss of the assessee before adjustment under Sub-section (2) of Section 73 of the Income-tax Act, 1961 whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in upholding the Commissioner of Income-tax (Appeals)'s order that speculation profit of the current year should first be adjusted against the speculation loss of earlier years and not against the current year's business loss ?

( 2 ) SHORTLY stated, the facts are as under : the assessee is an investment company, During the year, the assessee earned speculation profit of Rs. 4,60,475. The Assessing Officer adjusted the speculation profit of the assessee aga

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