JUDGMENT : 1. Heard learned standing counsel for the Income Tax Department and Mr. Misra, learned counsel for the assessee. 2. On being moved by an application u/s 256(2) of the Income Tax Act, 1961 (in short, "the Act"), this court directed the Income Tax Appellate Tribunal, Cuttack Bench, Cutlack (in short, " the Tribunal"), to state a case and refer the following question for opinion : " Whether, on the facts and in the circumstances of the case, payment of interest to a partner would not be available for deduction u/s 40(b) of the Income Tax Act ?" 3. Pursuant to the direction, the Tribunal has stated a case. 4. The fact situation as evident from the statement of case drawn up by the Tribunal is as follows : 5. M/s. Taratarini Motor Service (hereinafter referred to as " the assessee " ) is a partnership firm. It filed a return for the assessment year 1978-79 disclosing income of Rs. 91,170. The Assessing Officer determined the income at Rs. 1,65,760. Computation was done in the following manner. (Rs.) (i) Income from bus plying 1,12,000 (ii) Income from truck plying 2,000 (iii) Interest paid to partners, added back 37,764 (iv) Income from undisclosed sources 14,000 6. Addition of interest paid to the partners is the subject-matter of dispute. 7. According to the assessee, the Revenue having applied a flat rate of income in respect of the buses, it was not open to make further addition in relation to the interest paid, since that is supposed to have been taken into consideration while computing the net income from each bus. The stand of the Revenue, on the other hand, is that determination was made after taking into consideration allowable expenses, and interest paid to the partners being statutorily required to be added back, there is nothing wrong in making the addition. The Tribunal found that once a flat rate is applied, all probable expenses including payment of interest to the partners was taken jiote of, and therefore, directed deletion of the amount. 8. From the records, we find that the Assessing Officer proceeded on the basis that in the earlier years the net income from each bus was estimated at Rs. 8,000 and income from 14 buses was determined at Rs. 1,12,000, after leaking adjustment for all allowable expenses. 8. From the records, we find that the Assessing Officer proceeded on the basis that in the earlier years the net income from each bus was estimated at Rs. 8,000 and income from 14 buses was determined at Rs. 1,12,000, after leaking adjustment for all allowable expenses. We find that a reference has been made to the results of the earlier years. No definite material could be produced before us by the parties as to whether in the past while adopting an income of Rs. 8,000 per bus, interest paid to the partners was taken note of. It could not be also explained whether payment of interest was a new feature. It is true that each assessment year is a separate unit, and strictly speaking, principles of res judicata are not applicable. But results of past years certainly provide a basis for assessment, when a best judgment of assessment is made. The Tribunal came to an abrupt conclusion that the net income estimated took into consideration all probable expenses which included interest paid to the partners. No material has been referred to in support of this conclusion. Therefore, instead of answering the question referred to us, we feel that the interest of justice would be best served if the matter is reheard by the Tribunal. It shall consider whether in the earlier years the aspect of payment of interest to the partners was taken note of, while net income from each bus was fixed at Rs. 8,000, and shall reconsider all relevant aspects relating to the question. 9. Reference is, accordingly, disposed of. No costs.