AI Drafter 
TaxTMI 
TaxTMI 
2004 (3) TMI 29
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....e notice. The notice set out the relevant facts which were to the extent relevant for the present as under: "For the years 1990-91 to 1993-94 assessment was concluded and the income of the firm was determined as loss. Shares of each of the partners was also determined separately which was also a loss and ordered to be carried forward for set off in subsequent years. With the omission of sections 19A and 19C of the KAIT Act, 1957, from April 1,1994, the income of the firm is taxable under section 19 and the share of the loss of the firm can only be set off against the income of the firm under section 15 of the KAIT Act, 1957. Share of loss of the partners in the firm becomes the loss in the hands of the partner liable to be carried forward as if the loss is incurred by the partner himself. In view of the above scheme of the Act, assessment order dated April 19,1996, of the assessing authority ordering set off of loss of the partners of the previous years in the income of the firm and further ordering, that the remaining loss to be carried forward to subsequent years for set off in the income of the firm is erroneous, improper and prejudicial to the interest of the Governmen....
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....absorbed losses to the extent of Rs. 1,18,56,221. Appearing for the appellants Mr. Naganand, learned senior counsel, argued that the Karnataka Taxation Laws (Amendment) Act, 1994, had omitted sections 19A, 19B, 19C and subjected registered firms to a uniform tax rate of 40 per cent, on their total agricultural income. While doing so, the Legislature had according to learned counsel omitted to make a provision under which unabsorbed losses allocated to the partners of such firms in the previous years could be allowed to be set off against the future income of the firms. He contended that since the State enactment was aimed at introducing a scheme similar to the one that was introduced by Parliament in so far as the payment of income-tax by registered firms was concerned, the absence of a provision like section 75 of the Income-tax Act permitting set off against unabsorbed losses was nothing but an unintended omission, which this court could remedy in order to remove the inequitable consequences flowing from the same. Relying upon the decision of the Supreme Court in CIT v. J.H. Gotla [1985] 156 ITR 323, learned counsel argued that the speech made by the Finance Minister in the St....
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....re in the income of the firm by the Karnataka Taxation Laws (Amendment) Act, 1994. Consequently, registered partnership firms became liable to tax in terms of section 19 of the Act read with Part II of the Schedule as amended at 40 per cent, of the total agricultural income earned by them. The amendments incorporated by the Karnataka Act No. 18 of 1994 left free the share of profit allocated to each partner in his hands from any further liability. The amended provisions did not envisage allocation of loss to a partner or its being set off against his other income. Suffice it to say that the scheme underlying the earlier provisions stood abrogated and substituted by a new scheme which could but significantly did not provide for allocation of shares or carrying forward or setting off of losses by the partners against their income. The appellants all the same argue that the loss allocated to the partners is in essence, the loss of the firm itself, and that where the partner has ceased to be assessable on his share of income, the loss allocated to him will become incapable of being set off against other income of the partner and should therefore revert to the firm thereby entitling the....
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....or may not culminate in amendment to statutory provisions. Even where amendments are proposed, the broad proposal initially made may undergo a change and may be passed only in a modified form. In the circumstances, the absence of a provision by which unabsorbed losses in the hands of the partners would revert to the firm for being set off against its future income cannot be said to be an unintended omission as was sought to be argued on behalf of the appellants. One of the corollaries to the general rule of literal construction is that nothing is to be added or taken from a statute unless there are adequate grounds to justify the inference that the Legislature intended something which it omitted to express. It is also one of the settled principles of construction that although a court cannot supply a real casus omissus it should not so interpret a statute as to create a casus omissus when there is really none. In Smt. Tarulata Shyam v. CIT [1977] 108 ITR 345 (SC), the court held that even if there be a casus omissus, the defect can be remedied only by legislation and not by judicial interpretation. The court observed: "To us, there appears no justification to depart from t....
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....ld never have been intended by the Legislature, the court might modify the language used by the Legislature so as to achieve the intention of the Legislature and produce a rational construction. The task of interpretation of a statutory provision is an attempt to discover the intention of the Legislature from the language used. It is necessary to remember that language is at best an imperfect instrument for the expression of human intention. It is well to remember the warning administered by Judge Learned Hand that one should not make a fortress out of the dictionary but remember that statutes always have some purpose or object to accomplish and sympathetic and imaginative discovery is the surest guide to their meaning." In the case at hand, the scheme introduced by the amendment brought in the year 1994 does not provide for reversion of the unabsorbed losses to the partnership concern. There is a clear omission of any such provision in the amended Act. The legal position relevant to such cases is fairly well settled by the decisions of the Supreme Court that a matter which should have been but has not been provided for in a statute cannot be supplied by the courts for doing so ....