1996 (3) TMI 80

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....on and opinion : "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the assessee could not claim to set off the entire disclosed income pertaining to the assessment years 1972-73 to 1975-76 against the addition to the income for the assessment year 1974-75 ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in dividing the disclosed income of Rs. 31,600 into four equal parts and considering each part as the income disclosed in respect of a particular assessment year?" The facts lie in a narrow compass. The assessee is a firm registered under the Partnership Act and under the Income-tax Act for the assessment year 1974-....

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....see then filed an application under section 256(1) of the Income-tax Act, 1961 (for short, "the Act"). The case was not stated. It, then, filed an application under section 256(2) of the Act. This court, then, directed the Tribunal to state the case and refer the aforesaid questions. The Tribunal then stated the case and referred the questions. We have heard Shri G. M. Chaphekar, learned senior advocate, with Smt. Meena Chaphekar for the applicant and Shri D. D. Vyas, learned counsel for the non-applicant-Department. The Commissioner of Income-tax, Bhopal, issued a certificate in favour of the assessee showing a disclosure of the amount as Rs. 31,600. This amount is built up of Rs. 21,130 as cash, Rs. 8,890 as tax paid and Rs. 1,580 a....

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....ould normally be accepted. The Department has shown nothing to show as to why the choice indicated by the assessee should be spurned. It is not shown to us that the Department had any right to divide the amount by the number of assessment years and to take such amount for the purpose of adjustment. When the assessee intended it to be substantially --- for the assessment year 1974-75, then, a different yardstick as --- used is impermissible in law. It is in the area of legislative ambiguities, yet not receding, that courts have to fill gaps, clear doubts and mitigate hardships. In the words of judge Learned Hand, spoken in Cabell v. Markhan [1945] 148 F 2d 737, 739, we get enough light to locate the correct path : "It is one of sure....