MITTER, J.

1. THE questions referred to this Court under s. 66(2) of the Act are as follows:

"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the transactions between the assessee and M/s Kedar Nath Hariram were speculative transactions within the meaning of the expression used in s. 24(1) of the Indian IT Act? (2) Whether, on the facts and in the circumstances of the case the Tribunal erred in rejecting the set-off of the loss claimed by the assessee of Rs. 40,572 under s. 24(1) of the Indian IT Act?"

2. THE facts taken from the statement of case are as follows : THE assessment year concerned is 1953-54, the corresponding accounting year being 2008 Gujarati Diwali year ending on 18th Oct., 1952. THE assessee is a member of the Gunny Trades Association and is a registered dealer in jute and hessian. In the accounting year mentioned above, the assessee entered into three transactions for purchase and sale of hessian bags, heavy cess, etc., with Kedar Nath Hariram. Under the first contract, the assessee agreed to sell to the said firm 500 bales of heavy cess at the rate of Rs. 180 per hundred bags, on 1st Sept., 1951. Out