Judgment— These appeals raise a question of some complexity on the interpretation of the provisions of the Income-tax Act, 1961 (the 1961 Act), in regard to which there is a difference of opinion among various High Courts. In the judgment under appeal, reported in (1975) .101 ITR 658 (Guj), the Gujarat High Court has answered the question raised in favour of the Revenue and against the assessees. Hence these appeals by the assessee, M/ s. Garden Silk Weaving Factory, Surat.

2. The two appeals relate to the assessment years 1967-68 and 1968-69 for which the relevant previous years were the Saka years 2022 and 2023 respectively. The question arises in similar circumstances for both the years. We shall set out the facts relevant for the assessment year 1968-69 as the appeals and reference in respect of that year were disposed of earlier than those pertaining to the assessment year 1967-68.

3. The assessee, M/s.Garden SilkWeaving Factory, is a registered firm. For the assessment year in question, it returned a total income of Rupees 3,94,483/- and a provisional assessment, under Section 141 of the Act, was made accepting the income returned. Subsequently, the Income-tax Officer found tha