Judgment :- 1. A common question mentioned hereunder has been referred to this Court by the Appellate Tribunal, Cochin Bench, under S.256 (1) of the Income-tax Act, 1961: 'Whether, on the facts and in the circumstances of the case, and on a true interpretation of the various provisions of the Income tax Act, 1961, the Tribunal was correct in holding that a registered firm was not entitled to have its losses in speculation business carried forward for set off against future profits in speculation business." 2. The following are the facts. The assessee is a registered firm carrying on business in hill produce, coconut oil, etc. at Palai, Cochin and Alleppey. Apart from regular trade in these commodities, the assessee was also carrying on a business in speculation. For the assessment year 1964-65 the assessee declared a loss of Rs. 33,013/-relating to speculation business and the Income-tax Officer, on assessment, determined the loss at Rs. 40,510/-. For the assessment year 1965-66 the assessee declared a profit of Rs. 6,902/- from the speculation business, but on assessment, the Income-tax Officer fixed the loss at Rs. 598/-. For the assessment year 1966-67 the assessee declared a profit of Rs. 1.43.764/-from the speculation business. But, on assessment, the Income-tax Officer fixed the income from this business at Rs. 1,36,264/-. 3. In apportioning the assessee's income among its partners under S.67 of the Income-tax Act, the Income-tax Officer also apportioned the speculation business losses determined by him for the assessment years 1964-65 and 1965-66. Similarly, for the assessment year 1966-67 he apportioned the speculation business profit determined on assessment, among the partners under S.67. The assessee's contention that the speculation business loss incurred by the assessee-firm during the previous years 1964-65 and 1965-66 should not have been apportioned between the partners, but should have been carried forward and set off against the speculation business profit made by the assessee for the year 1966-67 was negatived by the Income-tax Officer. 4. The assessee appealed against the orders of assessment to the Appellate Assistant Commissioner and be, following the decision of the Supreme Court in Commissioner of Income-tax, Gujarat v. Kantilal Nathuchand Sami (63 ITR. 4. The assessee appealed against the orders of assessment to the Appellate Assistant Commissioner and be, following the decision of the Supreme Court in Commissioner of Income-tax, Gujarat v. Kantilal Nathuchand Sami (63 ITR. 318) allowed the assessee's appeals on this point and held that speculation business loss of the assessee's firm should have been carried forward and set off against its future speculation business profits and should not have been apportioned among its partners as was done by the Income-tax Officer. On second appeal by the Department, the Appellate Tribunal set aside the order of the Appellate Assistant Commissioner and restored that of the Income-tax Officer. Aggrieved by that decision the assessee applied for reference and it is under these circumstances that this question has come up for consideration. 5. In this connection it has to be noted that in S.70 to 75 provision is made in the Act for set off and carry forward of loss incurred by the assessees under various heads of income. In S.70 it is provided that where the net result for any assessment year in respect of any source of income other than capital gain is a loss, the said loss is allowed to be set off against his income from any other source under the same head. In S.71 it is provided that in respect of a loss which could not be set off under S.70 it can be set off against the income from any other head subject to other provisions of chapter VI. For loss incurred in business, profession and vocation, S.72 allows set off and carry forward of such loss to subsequent years except in the case of loss incurred in speculation business. So far as the latter loss is concerned S.73 provides that it can be set off only against speculation business profits and that it can be carried forward and set off only against profits in speculation business in the subsequent years. S.74 provides for set off and carry forward of losses in capital gains. If the assessee is a registered firm, S.75(1) provides that if the loss cannot be set off against any income it should be apportioned among the partners and the partners can claim the benefits of S.70, 71, 72, 73 and 74. S.74 provides for set off and carry forward of losses in capital gains. If the assessee is a registered firm, S.75(1) provides that if the loss cannot be set off against any income it should be apportioned among the partners and the partners can claim the benefits of S.70, 71, 72, 73 and 74. It is also stated in S.75 (2) that this carry forward and set off under the above sections is not allowable to an assessee, being a registered firm. S.75 reads as follows: 75(1). Where the assessee is a registered firm, any loss which cannot be set off against any other income of the firm shall be apportioned between the partners of the firm, and they alone shall be entitled to have the amount of the loss set off and carried forward for set off under S.70, 71, 72, 73 and 74. (2) Nothing contained in sub s. (1) of S.72, sub s. (2) of S.73, or sub s. (1) of S.74 shall entitle any assessee, being a registered firm, to have its loss carried forward and set off under the provisions of the aforesaid sections." Sub-s. (2) clearly applies to the assessment in this case. But, it is contended that the sub-s. (2) must be read along with and as part of sub-s. (1) and so reading the field of operation of sub-s. (2) should be limited to those cases where loss has been apportioned between the partners. In other words, it is contended that this provision is intended only as a prohibition against double relief in respect of the same loss in the hands of the same assessee and that if the loss has been apportioned between and allowed to be carried forward by the partners, to avoid double relief alone S.75(2) has been enacted. According to the assessee, no loss has been set off in assessing the tax on the firm, and therefore in respect of an assessment of tax on the registered firm this S.75(2) cannot be made applicable. There is no scope for such a restricted construction. There is no ambiguity in the language used in sub-s. (2). The plain grammatical construction of that sub-section leads only to one conclusion, viz., it makes an inroad into the general right to set off and carry forward of losses conferred on registered firms by the preceding three sections. There is no scope for such a restricted construction. There is no ambiguity in the language used in sub-s. (2). The plain grammatical construction of that sub-section leads only to one conclusion, viz., it makes an inroad into the general right to set off and carry forward of losses conferred on registered firms by the preceding three sections. When the legislature enacts that a registered firm is not entitled to carry forward and set off, the loss in respect of a speculation business, full effect must be given to that provision. 6. The Supreme Court decision referred to above, viz., Commissioner of Income-tax, Gujarat v. Kantilal Nathuchand, Sami (63 ITR. 318) was a case which arose under S.24 of the Income-tax Act, 1922. Under the earlier Act there was no section similar to S.75(2) and therefore the Supreme Court held that a registered firm can also carry forward and set off speculation business loss against speculation business profit in subsequent years. That decision has absolutely no application to an assessment under the provisions of the new Act. The decision of the Appellate Tribunal is correct. Therefore the common question in all the references is answered in the affirmative and against the assessee. The parties shall bear their costs. 7. A copy of this judgment shall be forwarded to the Appellate Tribunal, Cochin Bench, as required by law for each of the references Nos. 100 to 102 of 1970.