H.D.DEVASIA & CO., KERALA vs COMMISSIONER OF INCOME TAX, KERALA

The Supreme Court held that under Section 73 of the Income Tax Act, 1961, a registered firm cannot carry forward its losses in speculation business to set off against future profits. The Court clarified that such losses must be apportioned among the partners, who alone are entitled to set off the losses as per Section 75. The judgment distinguished the earlier case of C.I.T., Gujarat v. Kantilal Nathuchand Sami, emphasizing that the provisions of the 1961 Act significantly differ from those of the 1922 Act, thereby affirming the High Court's decision against the assessee.