G.K.MITTER, J.

1. IN this reference under s. 66(1) of the INdian IT Act, the point of law involved is whether loss incurred by the assessee in a speculative business can be set off towards profits and gains of his other business not of a speculative nature arising to him in the same year under s. 24(1) of the Act read with the first proviso thereto. The relevant portion of s. 24(1) with the proviso is as follows :

"24 (1) Where any assessee sustains a loss of profits or gains in any year under any of the heads mentioned in s. 6, he shall be entitled to have the amount of the loss set off against his income, profits or gains under any other head in that year : Provided that in computing the profits and gains chargeable under the head 'Profits and gains of business, profession or vocation', any loss sustained in speculative transactions which are in the nature of a business shall not be taken into account except to the extent of the amount of profits and gains, if any, in any other business consisting of speculative transactions."

2. THE assessment year of the assessee-company for the purpose of this reference is 1953-54, the corresponding accounting year being the financial y