DCIT, Circle 10, Kolkata V. M/s. West Bengal Industrial Infrastructure Development Corporation, Kolkata

ITA 2011/KOL/2009

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78403 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2014
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 26-11-2009
• Court: TRIBUNAL
• Department Lawyers: GIAYASUDDIN ANSARI
• Keywords: Rule of consistency; Reasonable cause
• Section: 143(3); 263

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE , /AND , ! ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI SHAMIM YAHYA, AM] ' / I.T.A NO.2011/KOL/2009 #$ %&/ ASSESSMENT YEAR: 2006-07 & ' / I.T.A NO.1764/KOL/2010 #$ %&/ ASSESSMENT YEAR: 2007-08 DEPUTY COMMISSIONER OF INCOME-TAX, VS. WEST BENGA L INDUSTRIAL INFRASTRUCTURE CIRCLE-10, KOLKATA. DEVELOPMENT CORPORATION (PAN: AAACW3073C) (() /APPELLANT ) (*+()/ RESPONDENT ) DATE OF HEARING: 30.06.2014 DATE OF PRONOUNCEMENT: 18.07.2014 FOR THE APPELLANT: SHRI GIAYASUDDIN ANSARI, JCIT (S R. DR) FOR THE RESPONDENT: SHRI SANJAY BHATTACHARYA / ORDER PER SHRI MAHAVIR SINGH, JM : BOTH THESE APPEALS BY REVENUE ARE ARISING OUT OF SE PARATE ORDERS OF CIT(A)-XII, KOLKATA IN APPEAL NO. 292/XII/CIR-10/08-09 AND 866/ XII/CIR-10/09-10 DATED 28.08.2009 AND 16.06.2010 RESPECTIVELY. ASSESSMENT S WERE FRAMED BY DCIT, CIRCLE- 10, KOLKATA U/S. 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEARS 2006-07 AND 2007-08 VIDE HIS SEPARATE ORDERS DATED 18.12.2008 AND 22.12.2009 RESPECTIVELY. 2. FIRST COMMON ISSUE IN THESE TWO APPEALS OF REVEN UE IS AS REGARDS TO THE ORDER OF CIT(A) ALLOWING DEDUCTION U/S. 80IA OF THE ACT DESP ITE THE FACT THAT ASSESSEE COMPANY DID NOT FULFILL ALL ESSENTIAL CONDITIONS. FOR THIS, REVENUE HAS RAISED IDENTICALLY WORDED 2 ITA NO.2011/K/2009 & ITA NO.1764/K/2010 W.B. INDUSTRIAL INFRASTRUCTURE DEV. CORPN AY 20006 -07 & 2007-08 GROUNDS IN BOTH YEARS. HENCE, WE WILL TAKE UP THE GROUND AS RAISED IN ITA NO. 2011/K/2009 FOR AY 2006-07, WHICH READS AS UNDER: 1. THAT UNDER THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, LD. CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S. 80IA OF THE I. T. ACT AMOUNTING TO RS.89,93,970/- THOUGH THE ASSESSEE COMPANY DID NOT FULFILL ALL THE ESSENTIAL CONDITIONS FOR GETTING THE SAME. 3 . AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE ST ATED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF ASSESSEE AND AGAINST REVENUE B ECAUSE THE AO IN AY 2003-04, 2004-05 AND CIT(A) IN AY 2005-06 HAS ALREADY ALLOWE D THE CLAIM OF THE ASSESSEE AND REVENUE HAS NOT FILED ANY APPEAL AGAINST THE SAME. EVEN THE AO IN AY 2008-09 AND 2009-10 HAS ALSO ALLOWED THE CLAIM OF DEDUCTION U/S . 80IA OF THE ACT. HE ENCLOSED THE COPIES OF THIS ASSESSMENT ORDER FOR AY 2003-04, 200 4-05, 2008-09 AND 2009-10 IN ASSESSEES PAPER BOOK AT PAGES 1 TO 33. WHEN THIS WAS PUT TO LD. SR. DR, HE ARGUED THAT EACH YEAR IS INDEPENDENT YEAR AND THERE IS NO CO-RE LATION BETWEEN INTERMITTENT YEARS. WE FIND THAT THE CIT(A) EXACTLY THE SAME ISSUE HAS DEA LT WITH IN AY 2005-06 VIDE PARA 4.3.3 AND 4.3.4 AS UNDER: 4.3.3. I HAVE CAREFULLY CONSIDERED THE SUBMISSION S OF THE LD. AR OF THE APPELLANT AND ALSO THE REASONS STATED BY THE A.O N THE ASSESSMENT ORDER. AS SEEN FROM THE FACTS, IN THE A.Y. 2003- 04, DEDUCTIO N U/S. 80-IA WAS DENIED ON MORE OR LESS SIMILAR GROUNDS AS IN THE PRESENT APPE AL. ON APPEAL, THE ITAT BY THEIR ORDER DT. 22.6.07 SET ASIDE THE ORDER AND DIR ECTED THE A.O TO CONSIDER THE CLAIM AFRESH. BUT FRESH ASSESSMENT HAS NOT BEEN MAD E BY THE A.O TILL THE COMPLETION OF ASSESSMENT FOR THE YEAR UNDER APPEAL I.E. 7.12.2007. FOR THE A.Y. 2004-05, ORDER U/S. 1 43(3) WAS PASSED ON 30.11.06 WHERE THE CLAIM FOR DEDUCTION U/S. 80-IA WAS ALLOWED ON SIMILAR SET OF FACTS/ACTIVITIES. THERE IS NOTHING ON RECORD THAT ANY PROCEEDING U/S. 147/154/ 263 HAS BEEN INITIATED FOR THE A.Y. 2004-05. THE FACTS ARE SAME IN THE PRESENT YEAR UNDER APPEAL IN VIEW OF THE FACT THAT THE AUDIT REPORT IN FORM NO. 10CCB WA S FURNISHED BEFORE COMPLETION OF THE ASSESSMENT. IT IS NOW SETTLED LAW THAT THE DEDUCTION CAN BE ALLOWED EVEN IF THE PRESCRIBED AUDIT CERTIFICATE IS SUBMITTED BEFORE COMPLETION OF THE ASSESSMENT. RELIANCE CAN BE PLACED ON CIT VS. P ANAMA CHEMICAL WORKS (2007) 207 CTR(MP) 249], CIT VS. RAI BAHADUR BISSES WARLAL MOTILAL MALWASIE TRUST, 195 ITR 825 (CAL.) AND MURALI EXPO RT HOUSE AND OTHERS VS. CIT 238 ITR 257 (CAL.). THE A.OS RELIANCE ON THE O RDER OF ASSESSMENT FOR A.Y. 2003-04 WHICH STANDS SET ASIDE IN DENYING DEDUCTION U/S. 80-IA CANNOT BE JUSTIFIED. IT IS A FACT THAT THE APPELLANT COMPANY CAME INTO EXISTENCE FROM 1973 AND CONTINUED THE SAME BUSINESS ACTIVITIES EVEN AFT ER 1.11.95. THE DEDUCTION U/S. 10(20A) WAS GIVEN UPTO A.Y. 2002-03. THE DEDUC TION WAS ALSO GIVEN IN A.Y. 2004-05 U/S. 80-IA. HOWEVER THE SAME DEDUCTION WAS DENIED IN A.Y. 2003-04. 3 ITA NO.2011/K/2009 & ITA NO.1764/K/2010 W.B. INDUSTRIAL INFRASTRUCTURE DEV. CORPN AY 20006 -07 & 2007-08 HOWEVER THE ASSESSMENT WAS LATER SET ASIDE BY THE I TAT FOR RE-EXAMINATION BY THE A.O ON THIS ISSUE. IT IS TRUE THAT RES JUDICATA IS NOT APPLICABLE IN INCOME TAX ASSESSMENTS. HOWEVER COURTS HAVE HELD THAT THERE MU ST BE SOME REASONABLE CAUSE OR JUSTIFICATION TO DEVIATE FROM CONCLUSIONS ARRIVED OR INFERENCE DRAWN IN EARLIER YEARS. AS REGARDS THE CONDITIONS PRESCRIBED U/S. 80-IA, TH E A.O IS OF THE VIEW THAT THE BUSINESS ACTIVITIES CARRIED OUT BY THE APPELLANT CO MPANY ARE NOT COVERED U/S. 80-IA TO GET DEDUCTION. THE LD. AR OF THE APPELLANT ARGUED VEHEMENTLY THAT THE ACTIVITIES UNDERTAKEN BY THE APPELLANT ARE VERY MUC H COVERED UNDER THE TERM INFRASTRUCTURE FACILITIES AND HENCE ELIGIBLE FOR DE DUCTION. LT IS ALSO SUBMITTED THAT THE APPELLANT HAD BEEN UNDERTAKING NEW PROJECT S AND THE PROJECTS WERE IN THE NATURE OF INFRASTRUCTURE FACILITIES. AS SEEN FR OM THE FACTS, L FIND THAT TH WORKS UNDERTAKEN BY THE APPELLANT ARE IN THE NATURE OF INFRASTRUCTURE FACILITIES LIKE WATER/DRAINAGE SYSTEM, ROADS IN THE INDUSTRIAL AREA. THE DEFINITION OF INFRASTRUCTURE FACILITIES HAS ALMOST REMAINED THE SAME EVEN AFTER THE AMENDMENT W.E.F. A.Y. 2002-03. 4.3.4 IN VIEW OF THE FACTS, I AM OF THE VIEW THAT T HE APPELLANT COMPANY IS ELIGIBLE TO CLAIM DEDUCTION U/S. 80-IA AS ITS ACTIVITIES ARE COVERED UNDER INFRASTRUCTURE FACILITIES. I DIRECT THE A.O TO ALLOW THE CLAIM OF DEDUCTION U/S. 80-IA OF THE ACT. THE APPELLANT SUCCEEDS ON THIS COUNT. 4. EVEN WE HAVE GONE THROUGH THE ASSESSMENT ORDERS FOR ALL THESE YEARS I.E. AY 2003-04, 2004-05, 2008-09 AND 2009-10 AND SEEN THAT EXACTLY THE SIMILAR ISSUE HAS BEEN ALLOWED BY THE AO HIMSELF. AS REGARDS TO THE ARGUM ENT OF LD. DR THAT THIS IS A VERY OLD COMPANY ESTABLISHED IN THE YEAR 1995 I.E. W.E.F. 01 .04.1995, WHEN THE ENTERPRISES HAS STARTED OR START OPERATING AND MAINTAINING INFRAST RUCTURE FACILITY. ACCORDING TO LD. SR. DR, ASSESSEE COMPANY CAME INTO EXISTENCE W.E.F 16.1 1.1997. HENCE, ACCORDING TO HIM, THE BENEFIT OF SECTION 80IA OF THE ACT CANNOT BE EX TENDED BEYOND 10 YEARS. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE VEHEME NTLY CONTESTED THIS ARGUMENT AND STATED THAT WEST BENGAL INDUSTRIAL INFRASTRUCTURE D EVELOPMENT CORPORATION (WBIIDC) IS A BODY CORPORATE OF GOVT. OF INDIA WHICH WAS FOR M WITH THE OBJECT OF PROVIDING INFRASTRUCTURE FACILITIES LIKE ROADS, WATER SUPPLY, POWER, HOUSING ACCOMMODATION, RAILWAY SITE, ETC. IN THE BACKWARD INDUSTRIAL AREAS OF THE STATE OF WEST BENGAL AND ALSO TO DEVELOP SOCIAL INFRASTRUCTURE FACILITIES IN THE ADJ OINING AREAS OF THE INDUSTRIAL GROWTH CENTRES DEVELOPED BY IT. AS THE APPELLANTS BUSINE SS HAD BEEN TOWARDS PROVIDING OF INFRASTRUCTURE FACILITIES, THE APPELLANT CLAIMED DE DUCTION U/S. 80IA/(4)(I) ON EACH OF THE 4 ITA NO.2011/K/2009 & ITA NO.1764/K/2010 W.B. INDUSTRIAL INFRASTRUCTURE DEV. CORPN AY 20006 -07 & 2007-08 PROJECTS. THE ASSESSEE BEFORE THE AO ALSO SUBMITTED THE COMPLETE WORKING OF THE CORPORATION VIDE LETTER DATED 11.12.2008 AND THE RE LEVANT PORTION READS AS UNDER: (I) THE OBJECTS OF WBIIDC ARE TO DEVELOP INFRASTRU CTURE FACILITY LIKE ROAD, WATER SUPPLY, POWER, HOUSING ACCOMMODATION, RAILWAY SITE ETC. IN THE BACKWARD INDUSTRIAL AREAS OF THE STATE OF WEST BENGAL IN ACC ORDANCE WITH THE DIRECTIONS OF THE GOVERNMENT OF WEST BENGAL. SIMULTANEOUSLY, WBII DC ALSO DEVELOPS SOCIAL INFRASTRUCTURE FACILITIES FOR THE ADJOINING AREAS O F INDUSTRIAL GROWTH CENTRES DEVELOPED BY IT. (II) AS PER THE DIRECTIONS OF THE GOVERNMENT OF WES T BENGAL, WBIIDC ACQUIRES AND HOLDS LANDS FOR CARRYING OUT ITS OBJECTS IN DEVELOP ING INFRASTRUCTURE FACILITIES THREAT, AND LEASES, SELLS, EXCHANGES OR OTHERWISE T RANSFERS THE CONCERNED DEVELOPED PROPERTIES TO ENTREPRENEURS WHO ARE DESIRING TO SET UP THEIR INDUSTRIES THEREAT WBIIDC MAINTAINS AND OPERATES THE ABOVE- MENTIONED INFRASTRUCTURE FACILITIES DEVELOPED BY IT AT THE GROWTH CENTRES. (III) WBIIDCS BUSINESS OF DEVELOPING INDUSTRIAL IN FRASTRUCTURE FOR THE GROWTH AND DEVELOPMENT OF INDUSTRIES ON A WELL-PLANNED BASIS I N THE STATE OF WEST BENGAL, INTER ALIA, INCLUDES: (A) UNDERTAKING DEVELOPMENT WORK IN RELATION TO WATER S UPPLY. (B) UNDERTAKING OF DEVELOPMENT WORK IN RELATION TO DRAI NAGE (I.E. SANITATION AND STORAGE SYSTEM) (C) UNDERTAKING OF DEVELOPMENT WORK IN RELATION TO ROADS ALL THE ABOVEMENTIONED ACTIVITIES ARE INCLUDED IN T HE DEFINITION OF INFRASTRUCTURE FACILITIES AS PER THE EXPLANATION TO SECTION 80-IA( 4) OF THE INCOME-TAX ACT, 1961. (IV) WBIIDC WAS INCORPORATED IN 1973 AND FROM TIME TO TIME IT HAD BEEN ENGAGED IN THE DEVELOPMENT OF VARIOUS INFRASTRUCTURE FACILI TIES ESPECIALLY IN THE BACKWARD AREAS OF WEST BENGAL AND NUMBER OF PROJECTS WERE SU CCESSFULLY COMPLETED BY WBIIDC. DURING THE FINANCIAL YEAR 2005-06, RELEVANT FOR THE A. Y. 2006-07, CERTAIN PARTICULAR INFRASTRUCTURE PROJECTS WHICH HA D BECOME OPERATIVE EITHER IN THE F. Y. 2005-06 ITSELF OR SOME YEARS EARLIER, PRODUCE D INCOMES FOR WBIIDC. IT MAY KINDLY BE NOTED THAT NONE OF THE PROJECTS FROM WHIC H WBIIDC EARNED INCOMES, HAD COMMENCED LONG AGO. THE INFRASTRUCTURE PROJECTS FRO M WHICH WBIIDC EARNED INCOMES DURING THE FINANCAL YEAR 2005-06 (RELEVANT TO A. Y. 2006-07) BECAME OPERATIVE AFTER SEPTEMBER, 2002 AND ACCORDINGLY, IT IS SUBMITTED THAT THE A. Y. 2006-07 FALLS WITHIN THE 15 YEARS PERIOD AS SPECIFI ED IN SECTION 80-IA (2) DURING WHICH DEDUCTON U/S. 80-IA IS ALLOWABLE. (V) WBIIDCS INCOMES, INTER ALIA, INCLUDE THE CHARG ES IT RECOVERS FROM THE ENTREPRENEURS FOR AVAILING OF THE INFRASTRUCTURE FA CILITIES DEVELOPED, MAINTAINED AND OPERATED BY WBIIDC. 5 ITA NO.2011/K/2009 & ITA NO.1764/K/2010 W.B. INDUSTRIAL INFRASTRUCTURE DEV. CORPN AY 20006 -07 & 2007-08 (VI) IN THE INCOME AND EXPENDITURE ACCOUNT FOR THE F. Y. 2005-06 (RELEVANT TO A. Y. 2006-07) THE INCOMES OF THE WBIIDC HAD BEEN FROM TH E INFRASTRUCTURE FACILITIES WHICH HAD BEEN PROVIDED BY IT TO VAROUS ENTREPRENE URS. FOR EXAMPLE, THE FOLLOWING INCOMES AMONG OTHERS, MAY BE MENTIONED- (A) WATER AND ELECTRIC SUPPLY CHARGES RS.1,31,12 ,352 (B) MAINTENANCE AND SERVICE CHARGES (IN RELATION TO ROADS/DRAINAGE SYSTEM PROVIDED BY THE APPELLANT) RS.1,02,39,238 (C) RECOVERY OF OVERHEAD ON DEVELOPMENT COST RELATI NG CONSTRUCTION OF ROADS, WATER SUPPLY PROJECTS, DRAINAGE SYSTEM RS. 49,27,639 (D) AGENCY CHARGES RS. 57,87,807 5. FROM THE ABOVE FACTS AND CIRCUMSTANCES OF THE CA SE, WE FIND THAT THE ASSESSEES OBJECTS ARE TO DEVELOP INFRASTRUCTURE FACILITIES LI KE ROADS, WATER SUPPLY, POWER, ACCOMMODATION, RAILWAY SITE ETC. IN THE BACKWARD IN DUSTRIAL AREAS OF THE WEST BENGAL. THE ASSESSEE ALSO DEVELOPS SOCIAL INFRASTRUCTURE FA CILITIES IN THE ADJOINING AREAS OF THE INDUSTRIAL GROWTH CENTRES. THE ASSESSEE ACQUIRES L AND, IN LIEU OF DIRECTIONS OF GOVT. OF WEST BENGAL, AND DEVELOPED THE SAME BY PROVIDING RO AD, SEWERAGE, DRAINAGE, ELECTRICITY, WATER SUPPLY, OTHER ANCILLARY AND BASI C COMMON FACILITIES. THEREAFTER, ASSESSEE DISTRIBUTES THE DEVELOPED LAND AMONG THE E NTREPRENEURS WHO ARE INTERESTED IN SETTING UP OF THEIR INDUSTRIES IN THE STATE OF WEST BENGAL. A NUMBER OF PROJECTS WERE SUCCESSFULLY COMPLETED BY THE ASSESSEE ALL ALONG AN D ON THESE PROJECTS ASSESSEE CLAIMED DEDUCTION U/S. 80IA(4) OF THE ACT AND EVEN NOW REVE NUE HAS ACCEPTED THE CLAIM OF THE ASSESSEE AND THE AO IN ASSESSMENT ORDER ITSELF FOR THE AYS 2003-04, 2004-05, 2008-09 AND 2009-10 HAS ALLOWED THE CLAIM OF THE ASSESSEE. EVEN IN AY 2005-06, THE CIT(A) ALLOWED THE CLAIM OF ASSESSEE QUA THIS DEDUCTION AN D REVENUE HAS NOT FILED ANY APPEAL AGAINST THE ORDER OF CIT(A). THE ASSESSEE FILED PRESCRIBED AUDIT REPORTS IN RESPECT OF EACH OF THE UNITS FOR WHICH DEDUCTION WAS CLAIMED U /S. 80IA OF THE ACT AND SUBMITTED BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCE EDINGS. EVEN ON MERITS ASSESSEE IS ELIGIBLE FOR THE CLAIM OF DEDUCTION U/S. 80IA(4) OF THE ACT AS THE CIT(A) HAS ELABORATELY DISCUSSED THE ISSUE, TO WHICH WE AGREE. EVEN ON TH E PRINCIPLE OF CONSISTENCY, THIS ISSUE IS COVERED. HONBLE SUPREME COURT IN THE CASE OF RA DHASAOMI SATSANG VS. CIT(1992) 193 ITR 321 (SC), WHEREIN IT HAS HELD AS UNDER: 6 ITA NO.2011/K/2009 & ITA NO.1764/K/2010 W.B. INDUSTRIAL INFRASTRUCTURE DEV. CORPN AY 20006 -07 & 2007-08 ONE OF THE CONTENTIONS WHICH THE LEARNED SENIOR COU NSEL FOR THE ASSESSEE- APPELLANT RAISED AT THE HEARING WAS THAT IN THE ABS ENCE OF ANY CHANGE IN THE CIRCUMSTANCES, THE REVENUE SHOULD HAVE FELT BOUND B Y THE PREVIOUS DECISIONS AND NO ATTEMPT SHOULD HAVE BEEN MADE TO REOPEN THE QUES TION. HE RELIED UPON SOME AUTHORITIES IN SUPPORT OF HIS STAND. A FULL BENCH O F THE MADRAS HIGH COURT CONSIDERED THIS QUESTION IN T.M.M SANKARALINGA NADAR & BROS. & ORS, V. COMMISSIONER OF INCOME-TAX, MADRAS, 4 ITC 226. AFTER DEALING WITH THE CON- CESSION THE FULL BENCH EXPRESSED THE FOLLOWING OPIN ION: 'THE PRINCIPLE TO BE DEDUCTED FROM THESE TWO CASES IS THAT WHERE THE QUESTION RELATING TO ASSESSMENT DOES NOT VARY WITH THE INCOME EVERY YEAR BUT DEPENDS ON THE NATURE OF THE PROPERTY OR A NY OTHER QUESTION ON WHICH THE RIGHTS OF THE PARTIES TO BE TAXED ARE BASED, E.G., WHETHER A CERTAIN PROPERTY IS TRUST PROPERTY OR NOT, IT HAS N OTHING TO DO WITH THE FLUCTUATIONS IN THE INCOME; SUCH QUESTIONS IF DECID ED BY A COURT ON A REFERENCE MADE TO IT WOULD BE RES JUDICATA IN THAT THE SAME QUESTION CANNOT BE SUBSEQUENTLY AGITATED.' ONE OF THE DECISIONS REFERRED TO BY THE FULL BENCH WAS THE CASE OF HOYSTEAD & ORS. V. COMMISSIONER OF TAXATION 1926 AC 155. SPEAK ING FOR THE JUDICIAL COMMITTEE LORD SHAW STATED: 'PARTIES ARE NOT PERMITTED TO BEGIN FRESH LITIGATIO NS BECAUSE OF NEW VIEWS THEY MAY ENTERTAIN OF THE LAW OF THE CASE, OR NEW VERSIO NS WHICH THEY PRESENT AS TO WHAT SHOULD BE PROPER APPREHENSION BY THE COURT OF THE LEGAL RESULT EITHER OF THE CONSTRUCTION OF THE DOCUMENT OR THE WEIGHT OF CERTA IN CIRCUM- STANCES. IF THIS WERE PERMITTED LITIGATION WOULD HAVE NO END, EXCEPT WHEN LEGAL INGENUITY IS EXHAUSTED. IT IS A PRINCIPAL OF LAW THAT THIS CANNOT BE PERMIT TED, AND THERE IS ABUNDANT AUTHORITY REITERATING THAT PRINCIPLE. THIRDLY, THE SAME PRINCIPLE - NAMELY, THAT OF SETTING TO REST RIGHTS OF LITIGANTS, APPLIES TO THE CASE WHERE A POINT, FUNDAMENTAL TO THE DECISION, TAKEN OR ASSUMED BY THE PLAINTIFF AND TRAVERSABLE BY THE DEFENDANT, HAS NOT BEEN TRAVERSED. IN THAT CASE ALSO A DEFENDA NT IS BOUND BY THE JUDGMENT, ALTHOUGH IT MAY BE TRUE ENOUGH THAT SUBSEQUENT LIGH T OR INGENUITY MIGHT SUGGEST SOME TRAVERSE WHICH HAD NOT BEEN TAKEN.' THESE OBSERVATIONS WERE MADE IN A CASE WHERE TAXATI ON WAS IN ISSUE. THIS COURT IN PARASHURAM POTTERY WORKS CO. LTD. V. INCOME-TAX OFF ICER, CIRCLE 1, WARD A, RAJKOT, 106 ITR 1 AT P. 10 STATED: 'AT THE SAME TIME, WE HAVE TO BEAR IN MIND THAT THE POLICY OF LAW IS THAT THERE MUST BE A POINT OF FINALITY IN ALL LEGAL PROCEEDING S, THAT STALE ISSUES SHOULD NOT BE REACTIVATED BEYOND A PARTICULAR STAGE AND THAT LAPS E OF TIME MUST INDUCE REPOSE IN AND SET AT REST JUDICIAL AND QUASI-JUDICIAL CONTROV ERSITE AS IT MUST IN OTHER SPHERES OF HUMAN ACTIVITY.' ASSESSMENTS ARE CERTAINLY QUASI -JUDICIAL AND THESE OBSERVATIONS EQUALLY APPLY. 7 ITA NO.2011/K/2009 & ITA NO.1764/K/2010 W.B. INDUSTRIAL INFRASTRUCTURE DEV. CORPN AY 20006 -07 & 2007-08 WE ARE AWARE OF THE FACT THAT STRICTLY SPEAKING RES JUDICATA DOES NOT APPLY TO INCOME-TAX PROCEEDINGS. AGAIN, EACH ASSESSMENT YEAR BEING A UNIT, WHAT IS DECIDED IN ONE YEAR MAY NOT APPLY IN THE FOLLOWING YEAR BUT WHERE A FUNDAMENTAL ASPECT PERMEATING THROUGH THE DIFFERENT ASSESSMENT YEARS HAS BEEN FOUND AS A FACT ONE WAY OR THE OTHER AND PARTIES HAVE ALLOWED THAT POSITION TO BE SUSTAINED BY NOT CHALLENGING THE ORDER, IT WOULD NOT BE AT ALL APPRO PRIATE TO ALLOW THE POSITION TO BE CHANGED IN A SUBSEQUENT YEAR. ON THESE REASONING S IN THE ABSENCE OF ANY MATERIAL CHANGE JUSTIFYING THE REVENUE TO TAKE A DI FFERENT VIEW OF THE MATTER- AND IF THERE WAS NOT CHANGE IT WAS IN SUPPORT OF THE AS SESSEE- WE DO NOT THINK THE QUESTION SHOULD HAVE BEEN REOPENED AND CONTRARY TO WHAT HAD BEEN DECIDED BY THE COM- MISSIONER OF INCOME-TAX IN THE EARLIER PRO CEEDINGS, A DIFFERENT AND CONTRADICTORY STAND SHOULD HAVE BEEN TAKEN. WE ARE, THEREFORE, OF THE VIEW THAT THESE APPEALS SHOULD BE ALLOWED AND THE QUESTION SH OULD BE ANSWERED IN THE AFFIRMATIVE, NAMELY, THAT THE TRIBUNAL WAS JUSTIFIE D IN HOLDING THAT THE INCOME DERIVED BY THE RADHASOAMI SATSANG WAS ENTITLED TO E XEMPTION UNDER SS. 11 AND 12 OF THE INCOME TAX ACT OF 1961. COUNSEL FOR THE REVENUE HAD TOLD US THAT THE FACTS OF THIS CASE BEING VERY SPECIAL NOTHING SHOULD BE SAID IN A MANNER WHICH WOULD HAVE GENERAL APPLICATION. WE ARE INCLINED TO ACCEPT THIS SUBMISSION AND WOULD LI KE TO STATE IN CLEAR TERMS THAT THE DECISION IS CONFINED TO THE FACTS OF THE CASE A ND MAY NOT BE TREATED AS AN AUTHORITY ON ASPECTS WHICH HAVE BEEN DECIDED FOR GE NERAL APPLICATION. WE FIND THAT IN THE PRESENT CASE BEFORE US, THE CLA IM OF DEDUCTION U/S. 80IA(4) OF THE ACT HAS CONSISTENTLY BEEN ALLOWED BY REVENUE IN FUTURE ASSESSMENT YEARS AND EVEN IN EARLIER ASSESSMENT YEARS. THERE IS NO MATERIAL CHANGE IN T HE FACTS OF THE CASE RATHER THE FACTS ARE EXACTLY IDENTICAL AND CIRCUMSTANCES ARE ALSO SA ME. IN SUCH A SITUATION AND IN THE ABSENCE OF ANY MATERIAL CHANGE, IT IS NOT JUSTIFIAB LE FOR THE REVENUE TO TAKE A DIFFERENT VIEW IN THE MATTER OF DEDUCTION AND IT IS NOT PERMI SSIBLE TO TAKE A DIFFERENT AND CONTRADICTORY STAND IN THIS ASSESSMENT YEAR WITH RE GARD TO SUCH DEDUCTIONS GRANTED IN EARLIER AND SUBSEQUENT YEARS. RESPECTFULLY FOLLOWI NG THE PRINCIPLES OF CONSISTENCY LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF RADHAS OAMI SATSANG, SUPRA, WE DISMISS THIS ISSUE IN THESE APPEALS OF REVENUE. THIS ISSUE OF REVENUES APPEALS IS DISMISSED. 6. THE NEXT ISSUE IN ITA NO. 2011/K/2009, OF REVENU E, IS AS REGARDS TO THE ORDER OF CIT(A) ALLOWING THE DEDUCTION U/S. 80IA OF THE ACT ON INCOME, RENT, SERVICE CHARGES AND OVERHEAD EXPENSES. FOR THIS, REVENUE HAS RAISE D FOLLOWING GROUND NOS. 2 AND 3: 2. THAT UNDER THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, LD. CIT(A) HAS ERRED IN APPRECIATING THE FACT THAT THE INCOME EARNED BY THE ASSESSEE 8 ITA NO.2011/K/2009 & ITA NO.1764/K/2010 W.B. INDUSTRIAL INFRASTRUCTURE DEV. CORPN AY 20006 -07 & 2007-08 COMPANY E.G. INTEREST INCOME, RENT, SERVICE CHARGES , OVERHEAD EXPENSES DO NOT QUALIFY FOR DEDUCTION U/S. 80IA. 3. THAT UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS FAILED TO APPRECIATE THAT INTEREST BEARI NG FUND WAS USED IN THE CAPITAL WORK IN PROGRESS IN SPITE OF FAILURE ON THE PART OF THE ASSESSEE TO SUBMIT ANY WORKING/EVIDENCE IN SUPPORT OF INTEREST OF RS.83.00 LAKH CAPITALIZED IN THE A/CS. 7. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BRIEFLY FACTS ARE THAT AO DURING THE COUR SE OF ASSESSMENT PROCEEDINGS NOTICED FROM THE ACCOUNTS OF THE ASSESSEE THAT THE CAPITAL WORKING IN PROGRESS INCLUDES INTEREST PERTAINING TO INTEREST BEARING LOANS. ACCORDING TO HIM, INTEREST BEARING LOAN WAS USED IN ACQUIRING CAPITAL WORK IN PROGRESS. ACCORDINGLY, H E CONCLUDED THAT THERE WAS SHORT CAPITALISATION OF INTEREST AND EXCESS INTEREST WAS DEBITED TO P&L ACCOUNT. ACCORDINGLY, HE WORKED OUT EXCESS INTEREST AT RS.1.57 CR. AND DI SALLOWED THE SAME. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE ALLOWED THE CLAIM OF THE ASSESSEE VIDE PAR A 5.3 OF HIS APPELLATE ORDER AS UNDER: THE APPELLANT WORKED OUT CAPITALIZATION OF INTERES T RELATED TO INCOMPLETE PROJECTS AND SHOWN UNDER THE HEAD CAPITAL WORK-IN-P ROGRESS. THE A.O CONCLUDED THAT THE APPELLANT SHORT CAPITALIZED THE INTEREST O N GOVERNMENT LOAN AND CLAIMED MORE NTEREST EXPENDITURE IN PROFIT & LOSS ACCOUNT. THUS THE A.O WORKED OUT EXCESS INTEREST EXPENDITURE DEBITED AND DISALLOWED. THE LD. AR OF THE APPELLANT ON THE OTHER HAND ARGUED THAT THE CAPITALIZATION OF INTEREST RELATED TO INCOMPLETE PROJECTS WORKED OUT CORRECTLY AND THE BASIS FOR SUC H CAPITALIZATION HAD BEEN UNIFORMLY FOLLOWED IN ALL THE YEARS AND THAT THE A. O HAD TAKEN INTO CONSIDERATION THE INTEREST FREE LOANS ALSO AND THAT THE INTEREST BEARING LOANS HAD ALSO BEEN UTILIZED TOWARDS INFRASTRUCTURAL FACILITIES APART F ROM REGULAR PROJECTS. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. AR OF THE APPELLANT. I FIND THERE IS MERIT IN THE SUBMISSIONS. THE APPELLANT HA S BEEN CONSISTENTLY FOLLOWING A METHOD TO CAPITALIZE THE INTEREST RELATED TO INCOMP LETE PROJECTS. IT S ALSO A FACT THAT BOTH NTEREST BEARING AND INTEREST FREE LOANS HAVE BEEN USED BOTH FOR PROJECTS AND INFRASTRUCTURE FACILITIES. AS SUCH THE ESTIMATE MADE BY THE A.O TO WORK OUT THE SHORT CAPITALIZATION OF INTEREST IS NO T CORRECT. IN VIEW OF THE FACTS, L DECLINE TO SUPPORT THE VIEW TAKEN BY THE A.O. ACCOR DINGLY, I DIRECT THE A.O TO DELETE THIS ADDITION. THE APPELLANTS GROUND IS ALL OWED. 8. WE FIND THAT ASSESSEE CAPITALIZED INTEREST RELAT ED TO INCOMPLETE PROJECTS WORKED OUT CORRECTLY AND THE BASIS FOR SUCH CAPITALIZATION HAD BEEN UNIFORMLY FOLLOWED IN ALL THE 9 ITA NO.2011/K/2009 & ITA NO.1764/K/2010 W.B. INDUSTRIAL INFRASTRUCTURE DEV. CORPN AY 20006 -07 & 2007-08 YEARS AND THAT THE A.O HAD TAKEN INTO CONSIDERATION THE INTEREST FREE LOANS ALSO AND THAT THE INTEREST BEARING LOANS HAD ALSO BEEN UTILIZED T OWARDS INFRASTRUCTURAL FACILITIES APART FROM REGULAR PROJECTS. AS SUCH, AS COMPUTED BY AO T HE SHORT CAPITALIZATION OF INTEREST, IN ANY WAY, IT IS ONLY A CAPITALIZATION AND NOTHING ELSE. THIS CANNOT BE ADDED AS INCOME OF THE ASSESSEE. THIS PRACTICE ASSESSEE IS CONTINU OUSLY FOLLOWING SINCE LONG AND REVENUE IS ALLOWING THE SAME. HERE ALSO, FOLLOWING THE PRINCIPLE OF CONSISTENCY, WE CONFIRM THE ORDER OF CIT(A) DELETING THE ADDITION. THIS ISSUE OF REVENUES APPEAL IS DISMISSED. 9. IN THE RESULT, BOTH APPEALS OF REVENUE ARE DISMI SSED. 10. ORDER IS PRONOUNCED IN THE OPEN COURT ON 18.07. 2014. SD/- SD/- , ! , (SHAMIM YAHYA ) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 18TH JULY, 2014 -. #/0 1 JD.(SR.P.S.) 2 *3 4 3%5- COPY OF THE ORDER FORWARDED TO: 1 . () / APPELLANT DCIT, CIRCLE-10, KOLKATA. 2 *+() / RESPONDENT M/S. WEST BENGAL INDUSTRIAL INFRASTRU CTURE DEVELOPMENT CORPORATION, 5, COUNCIL HOUSE STREET, 3 RD FLOOR, KOLKATA- 700 001 3 . # ( )/ THE CIT(A), KOLKATA 4. 5. # / CIT KOLKATA 3:; *# / DR, KOLKATA BENCHES, KOLKATA +3 */ TRUE COPY, #