Parner Taluka Sahakari Sakhar Karkhana Ltd., Ahmednagar V. Assistant Commissioner of Income-tax,

ITA 2026/PUN/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1664 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 11-02-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 22-11-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIPUL WAGHMARE
• Assessee Lawyers: S N DOSHI
• Keywords: Business income; Depreciation; Rule of consistency
• Section: 143(3); 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , , !'#'' $ , % & BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 2026/PN/2013 %' ( ')( / ASSESSMENT YEAR : 2010-11 PARNER TALUKA SAHAKARI SAKHAR KARKHANA LIMITED, A/P. DEVIBHOVERE, TAL.-PARNER, AHMEDNAGAR 414307 PAN : AAAAP0849B ....... / APPELLANT ' / V/S. ASSISTANAT COMMISSIONER OF INCOME TAX, AHMEDNAGAR CIRCLE, AHMEDNAGAR / RESPONDENT ASSESSEE BY : SHRI S.N. DOSHI REVENUE BY : SHRI VIPUL WAGHMARE / DATE OF HEARING : 03-05-2016 / DATE OF PRONOUNCEMENT : 29-06-2016 * / ORDER PER VIKAS AWASTHY, JM : THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE OR DER OF COMMISSIONER OF INCOME TAX (APPEALS)-IT/TP, PUNE DATED 05 -09-2013 FOR THE ASSESSMENT YEAR 2010-11. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEA R 2010-11 ON 2 ITA NO. 2026/PN/2013, A.Y. 2010-11 21-09-2010 DECLARING NIL INCOME. DURING THE COURSE OF SCR UTINY ASSESSMENT THE ASSESSING OFFICER OBSERVED THAT THE ASSE SSEE IN THE PROFIT AND LOSS ACCOUNT HAS SHOWN INCOME FROM INTEREST AN D SALE OF SCRAP UNDER THE HEAD OTHER SOURCE. THE ASSESSEE A LSO HAD RENTAL INCOME FROM LEASE OF FACTORY PREMISES WHICH WAS SHOWN IN TH E P & L ACCOUNT UNDER THE HEAD OTHER RECEIPTS, BUT IN THE RE TURN OF INCOME, THE ASSESSEE TREATED THE RENTAL INCOME AS ITS BUSINESS INCOME. THE ASSESSEE IS UNDER LIQUIDATION. THE ASSESSEE THROUGH OFFICIAL LIQUIDATOR ENTERED INTO LEASE AGREEMENT WITH M/S. VAIDYANAT H SAHAKARI SAKHAR KARKHANA LIMITED (VSSK) ON 16-11-2005. THE ASSES SEE LEASED OUT ENTIRE RUNNING SUGAR FACTORY INCLUDING PLANT AND MACHIN ERY, BUILDING, CANE YARD, STORE ROOM, LAND FOR STORAGE OF BAGAS SE ETC. THE ASSESSING OFFICER HELD THAT THE RENTAL INCOME FROM LEASING O UT OF THE FACTORY PREMISES ALONG WITH PLANT AND MACHINERY IS NOT THE BUSINESS INCOME OF THE ASSESSEE BUT INCOME FROM OTHER SOURCES. T HE ASSESSING OFFICER WHILE HOLDING SO, PLACED RELIANCE ON THE DECISION OF HON' BLE SUPREME COURT OF INDIA IN THE CASE OF NEW SAVAN SUGAR A ND GUR REFINING CO. LTD. VS. CIT REPORTED AS 74 ITR 7 (SC). AGGRIEVED BY THE ASSESSMENT ORDER DATED 15-01-2013, T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) UPHELD THE FINDINGS OF ASSESSING OFFICER AND DISMISSED THE APPEAL OF THE A SSESSEE. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNA L AGAINST THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). 3. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ASSAILING THE ORDER OF FIRST APPELLATE AUTHORITY ARE AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE LD. CIT(A) HAS ERRED IN UPHOLDING THE VIEW TAKEN BY THE ASSESSING OFFICER THAT 3 ITA NO. 2026/PN/2013, A.Y. 2010-11 THE LEASE CHARGES RECEIVED ON LEASING THE SUGAR FAC TORY ALONG WITH ENTIRE INFRASTRUCTURE NAMELY PLANT, MACHINERY, CANE YARD, ETC. AS INCOME FROM OTHER SOURCES OVERLOOKING THE ESTABLISH ED LEGAL POSITION THAT THE LEASE CHARGES IN THE GIVEN CIRCUM STANCES CONSTITUTE THE BUSINESS INCOME. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND WITHOUT PREJUDICE TO THE ABOVE GROUND THE LD. CIT(A) HAS ER RED IN NOT ALLOWING THE EXPENDITURE OF THE EXPENSES DEBITED TO THE PROFIT AND LOSS ACCOUNT AS THE ENTIRE EXPENSES HAVE DIRECT NEX US TO THE LEASE CHARGES RECEIVED ALTHOUGH ASSESSED AS INCOME FROM O THER SOURCES AND ALLOWABLE AS DEDUCTION U/S. 57 OF THE I.T. ACT, 1961. 4. SHRI S.N. DOSHI APPEARING ON BEHALF OF THE ASSESSEE SUB MITTED AT THE OUTSET THAT THE ASSESSEE HAD LEASED OUT THE FACTO RY PREMISES ALONG WITH PLANT AND MACHINERY IN NOVEMBER, 2005 I.E. DURING THE FINANCIAL YEAR 2005-06 FOR THE PERIOD OF 6 YEARS. SINCE, THE TIME O F LEASING OUT OF FACTORY PREMISES THE ASSESSEE IN ITS RETURN OF INCOME HAS BEEN DECLA RING LEASE RENTALS AS BUSINESS INCOME. THE ASSESSMENTS IN TH E CASE OF ASSESSEE FOR THE ASSESSMENT YEARS 2007-08, 2008-09 AN D 2009-10 WERE MADE U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). IN THE AFORESAID THREE ASSESSMENT YEAR S, THE ASSESSING OFFICER ACCEPTED THE CLAIM OF ASSESSEE. IT IS ONLY IN THE ASS ESSMENT YEAR 2010-11, THE ASSESSING OFFICER HAS RAISED OBJECTION IN TREA TING THE LEASE RENTAL INCOME AS BUSINESS INCOME. THE LD. AR SUBMITTED THA T THE ASSESSING OFFICER HAS VIOLATED THE RULE OF CONSISTENCY. TH E ASSESSING OFFICER CANNOT ALL OF A SUDDEN TAKE A CONTRARY STAND ON IDENTICAL SET OF FACTS. THE LD. AR IN ORDER TO BUTTRESS HIS SUBMISSIONS ON THE PRINCIPLE OF DOCTRINE OF CONSISTENCY PLACED RELIANCE ON THE FOLLOWING DECISIONS : I. BERGER PAINTS INDIA LTD. VS. COMMISSIONER OF INCOME TAX, 26 6 ITR 99 (SC); II. RADHASOAMI SATSANG VS. COMMISSIONER OF INCOME TAX, 193 IT R 321 (SC); 4 ITA NO. 2026/PN/2013, A.Y. 2010-11 III. CIT VS. EXCEL INDUSTRIES LTD., 358 ITR 295 (SC); AND IV. COMMISSIONER OF CENTRAL EXCISE VS. DOABA STEEL ROLLING MILLS IN CIVIL APPEAL NO. 3400 OF 2003 DECIDED ON 06-07-2011 : 10 TAXMANN.COM 455 (SC). 4.1 ON MERITS THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS UNDER FINANCIAL CRISIS. THE ASSESSEE WAS NOT IN A POS ITION TO RUN THE FACTORY. THE ASSESSEE WAS UNDER LIQUIDATION. THE STA TE GOVT. DECIDED TO LEASE OUT THE SUGAR FACTORY OF ASSESSEE FOR A PERIOD OF 6 YEARS. THE SUGAR COMMISSIONER, MAHARASHTRA GOVT., ISSUED SHORT TENDER NOTICE WHICH IS PLACED AT PAGE 16 OF THE PAPER BO OK. THE LD. AR POINTED OUT THAT A PERUSAL OF THE TENDER NOTICE WOULD SH OW THAT THE TENDERS FOR SUGAR FACTORY OF THE ASSESSEE WERE INVITED FO R LEASE ONLY AND NOT FOR SALE AS WAS IN THE CASE OF OTHER TWO FACTORIES WHICH WERE LISTED IN THE TENDER NOTICE ALONG WITH THE FACTORY OF THE ASSESS EE. THE LD. AR FURTHER POINTED OUT THAT A PERUSAL OF LEASE AGREEMENT W HICH IS AT PAGES 7 TO 15 OF THE PAPER BOOK WOULD SHOW THAT THE DOMINANT INTENTION OF ASSESSEE WAS TO CARRY ON THE BUSINESS AND NOT TO SELL THE FACTORY PREMISES OR THE PLANT AND MACHINERY. THE INTENTION OF TH E ASSESSEE WAS ALWAYS TO RUN THE FACTORY AFTER THE LEASE PERIOD WA S OVER. THE FACTORY HAD COME BACK TO THE ASSESSEE AFTER THE ELAPSE OF LEASE PERIOD. THE LD. AR EMPHASIZED THAT THE TERMS AND CONDITIONS OF THE LEASE AGREEMENT CLEARLY ESTABLISHES THE FACT THAT THE FACTORY LEASE AGREEMENT WAS ENTERED INTO FOR EXPLOITING THE COMMERCIAL ASSETS FOR S PECIFIC PERIOD FOR A CONSIDERATION. THE INTENTION OF THE ASSESSEE WAS NO T TO DISCONTINUE THE BUSINESS. THIS IS EVIDENT FROM THE FACT THA T STOCK OF SUGAR AND OTHER PRODUCTS WERE RETAINED BY THE ASSESS EE AT THE TIME OF LEASE AND THE ASSESSEE WAS FREE TO DEAL WITH THE STOCK S. THE ASSESSEE HAD MAINTAINED INDEPENDENT STAFF TO LOOK AFTER INCIDENTAL ACT IVITIES 5 ITA NO. 2026/PN/2013, A.Y. 2010-11 WHEN THE REST OF FACTORY ALONG WITH PLANT AND MACHINERY W AS LEASED OUT. THE LD. AR FURTHER POINTED THAT A PERUSAL OF LEASE AGREEMENT WOU LD SHOW THAT LEASE CHARGES WERE PAYABLE ON THE BASIS OF PR ODUCTION OF SUGAR I.E. QUANTITY OF SUGAR PRODUCED. THIS CLEARLY DEMONS TRATES THAT THERE WAS DIRECT NEXUS OF ASSESSEE WITH THE BUSINESS. V ARIOUS LICENSES INCLUDING CRUSHING LICENSE, EXCISE LICENSE ETC WERE ALWAYS IN THE NAME OF ASSESSEE. THIS FURTHER PROVES THAT THE ASSESSEE HA D INTENTION TO CONTINUE ITS BUSINESS. THE ASSESSING OFFICER IN THE SCRUTIN Y ASSESSMENT ORDER FOR ASSESSMENT YEAR 2007-08 AFTER DU E VERIFICATION OF THE LEASE AGREEMENT HAD ACCEPTED AND ASSESSED LEASE C HARGES AS BUSINESS INCOME. 4.2 THE LD. AR FURTHER CONTENDED THAT THE DECISION OF HON' BLE SUPREME COURT OF INDIA IN THE CASE OF NEW SAVAN SUGAR A ND GUR REFINING CO. LTD. VS. CIT (SUPRA) ON WHICH THE LOWER AUTHORITIE S HAVE PLACED RELIANCE IS DISTINGUISHABLE ON FACTS. IN THE SAID CASE IT WAS HELD THAT THE ASSESSEE HAD NO INTENTION TO REVIVE THE BUSIN ESS. IN SUCH CIRCUMSTANCES THE HON'BLE APEX COURT HELD THAT THE INCO ME FROM LEASING OUT OF FACTORY WAS NOT THE BUSINESS INCOME. THE LD. AR IN SUPPORT OF HIS CONTENTIONS THAT THE LEASE RENTAL INCOME A RISING FROM LEASING OUT OF FACTORY IS BUSINESS INCOME PLACED RELIANCE ON THE FOLLOWING DECISIONS : I. CHENNAI PROPERTIES & INVESTMENTS LTD. VS. COMMISSIONER OF INCOME TAX, 373 ITR 673 (SC); II. COMMISSIONER OF INCOME TAX VS. VIKRAM COTTON MILLS LTD., 169 ITR 597 (SC); III. SHREE HANUMAN SUGAR & INDUSTRIES LTD. VS. COMMISSIONER O F INCOME TAX, 266 ITR 106 (CAL.); 6 ITA NO. 2026/PN/2013, A.Y. 2010-11 IV. COMMISSIONER OF INCOME TAX VS. PATTESHWARI ELECTRICAL AND ASSOCIATION P. LTD., 282 ITR 61 (ALL.); V. ACIT VS. HINDUSTAN MACHINE TOOLS LTD., 121 ITR 798 (KAR.); 5. PER CONTRA SHRI VIPUL WAGHMARE REPRESENTING THE DEPA RTMENT VEHEMENTLY SUPPORTED THE FINDINGS OF AUTHORITIES BELOW AND SUBMITTED THAT EVERY ASSESSMENT YEAR IS SEPARATE. THE PRINCIPLE OF RES JUDICATA WOULD NOT APPLY UNDER INCOME TAX PROCEEDINGS. THUS, THE CONTENT ION OF THE ASSESSEE THAT IN THE EARLIER ASSESSMENT YEAR NO SU CH ADDITION WAS MADE WILL NOT HOLD ANY GROUND. IN SUPPORT OF HIS SUBMISSION S THE LD. DR PLACED RELIANCE ON THE DECISION OF HON'BLE MADRAS HIGH C OURT IN THE CASE OF CIT VS. HI TECH ARAI LIMITED REPORTED AS 321 ITR 477 (MAD) AND THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF COMM ISSIONER OF WEALTH TAX VS. MEATTLERS (P) LTD. REPORTED AS 156 ITR 569 (DEL). ON MERITS THE LD. DR SUBMITTED THAT THE ASSESSEE HAS LEASED OUT ITS FACTORY ALONG WITH PLANT AND MACHINERY. THERE WAS NO QUESTION OF REVIVING THE BUSINESS AS THE ASSESSEE WAS ALREADY UNDER LIQUIDATION. T HE LD. DR PRAYED FOR DISMISSING THE APPEAL OF THE ASSESSEE AND CONFIR MING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS). 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. WE HAVE ALSO EXAMINED THE DOCUMENTS ON RECORD REFERRED BY THE LD. AR OF THE ASSESSEE DURING THE COURSE OF MAKING SUBMISSION. T HE QUESTION, WHETHER THE LEASE RENTAL INCOME RECEIVED BY THE ASSESSE E IS BUSINESS INCOME OR INCOME FROM OTHER SOURCES IS A MIXED QUEST ION OF FACT AND LAW. THE CIRCUMSTANCES AND TERMS AND CONDITIONS UNDER W HICH THE BUSINESS ASSETS HAVE BEEN LEASED OUT HAVE TO BE EXAMIN ED THREADBARE TO ARRIVE AT A DEFINITE CONCLUSIVE. 7 ITA NO. 2026/PN/2013, A.Y. 2010-11 7. IN THE PRESENT CASE, UNDISPUTEDLY THE ASSESSEE WAS UNDER LIQUIDATION. DUE TO FINANCIAL CRUNCH FACED BY THE ASSESSEE, OSTENSIBLY A PROPOSAL WAS MADE TO LEASE OUT THE FACTORY PREMISES ALON G WITH THE PLANT AND MACHINERY. THE LD. AR HAS DRAWN OUR ATTENTION TO THE SHORT TENDER NOTICE ISSUED BY THE COMMISSIONER OF SUGAR, MAHARA SHTRA STATE, PUNE WHICH IS AT PAGE 16 OF THE PAPER BOOK. A PERUSAL O F THE SHORT TENDER NOTICE SHOWS THAT TENDERS WERE INVITED FOR LEASING OUT OF 3 SUGAR FACTORIES INCLUDING THAT OF ASSESSEE. IN SO FAR AS THE OTH ER TWO SUGAR FACTORIES IT WAS STATED IN THE TENDER NOTICE THAT AFTER E XPIRY OF LEASE PERIOD THE ENTIRE PROPERTY OF THE SUGAR FACTORY WAS TO BE SOLD TO THE LESSEE. IN RESPECT OF THE ASSESSEE THERE WERE SPECIFIC R EMARKS THAT THE FACTORY IS FOR LEASE ONLY AND NOT FOR SALE. A LEASE AGREEMENT WAS ENT ERED INTO BETWEEN THE ASSESSEE THROUGH THE LIQUIDATOR AND VS SK FOR THE PERIOD OF 6 YEARS. A PERUSAL OF LEASE AGREEMENT REVEAL THAT DURING THE LEAS E PERIOD THE LESSEE IS ENTITLED TO USE PLANT AND MACHINERY FOR SUGA R PRODUCTION, OFFICE PREMISES, WORKSHOP, SUGAR GODOWNS, STORAGE TANKS C ANE YARD AND OTHER ASSETS RELATED TO THE PRODUCTION OF SUGAR. THE E XISTING STOCK OF SUGAR AND OTHER BY-PRODUCTS LYING IN THE PREMISES OF FAC TORY WERE THE PROPERTY OF ASSESSEE. THE LESSEE WAS NOT ENTITLED TO C LAIM ANY GRANTS OR SUBSIDIES FROM THE MAHARASHTRA GOVT. OR CENTRAL GOVT. IN RESPECT OF SUGARCANE CRUSHED AND SUGAR PRODUCED DURING THE PERI OD OF LEASE AGREEMENT, EXCEPT FOR THE RELIEF PACKAGE DUE TO DROUGHT CONDITION. ANY SUBSIDY OR GRANT INCLUDING PACKAGES DECLARED BY THE STAT E GOVT. OR THE CENTRAL GOVT. SHALL BE RESERVED FOR THE ASSESSEE. AS PE R AGREEMENT THE LESSEE HAD TO CARRY ON PRODUCTION OF SUGAR WITH THE EXIS TING STAFF WITHOUT DISTURBING THERE TERMS AND CONDITIONS OF SERVICE. THE LESSEE WAS NOT AUTHORIZED TO RECRUIT ADDITIONAL STAFFS. IF AT ALL ANY ADDITIONAL STAFF WAS REQUIRED TO BE RECRUITED BY THE LESSEE THEIR EM PLOYMENT SHALL 8 ITA NO. 2026/PN/2013, A.Y. 2010-11 CEASE AFTER THE TERMINATION OF LEASE PERIOD. THE LESSEE W AS NOT ENTITLED TO MORTGAGE PLANT AND MACHINERY OR OTHER EQUIPMENT OF T HE ASSESSEE. THE STORES AND SPARES WHICH WERE OWNED AND POSSESSED BY THE ASSESSEE REQUIRED FOR DAY TO DAY RUNNING OF THE FACTORY WOULD BE MADE AVAILABLE BY THE ASSESSEE ON THE PAYMENT AT COST OR MA RKET PRICE, WHICHEVER IS HIGHER. AS FAR AS THE LICENSES WERE CONCERNE D THE LESSEE WOULD CARRY ON THE ACTIVITIES ON THE LICENSES IN THE NAME OF THE ASSESSEE. THUS, A CLOSE EXAMINATION OF VARIOUS TERMS AN D CONDITIONS OF LEASE AGREEMENT CLEARLY SHOW THAT THE INTENTION WAS NO T TO OUT RIGHTLY DISPOSE OFF THE FACTORY PREMISES BUT TO EXPLOIT THE BUSINESS ASSET. 8. THE REVENUE HAS NOT DISPUTED THE FACT THAT AFTER THE TERMINATION OF LEASE HOLD PERIOD THE FACTORY PREMISES HAD COME BACK T O THE ASSESSEE. THE LD. AR HAS POINTED OUT THAT IN THE PRECED ING ASSESSMENT YEARS I.E. ASSESSMENT YEARS 2007-08, 2008-09 AND 2009-1 0 IN SCRUTINY ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAD ACCEPTE D THE CLAIM OF THE ASSESSEE. OSTENSIBLY, IN SCRUTINY ASSESSMENT PROCEED INGS THE ASSESSING OFFICER HAD EXAMINED ALL THESE FACTS AND THEREAFTE R ACCEPTED THE CLAIM OF THE ASSESSEE. THE LD. AR HAS ALSO PLACED ON RECORD A COPY OF THE ASSESSMENT ORDER FOR ASSESSMENT YEARS 2008-09 AND 2009-10. A PERUSAL OF THE ASSESSMENT ORDER PASSED U/S. 143(3) FOR TH E AFORESAID ASSESSMENT YEARS REVEAL THAT THE ASSESSING OFFICER HAS GIVEN A CATEGORIC OBSERVATION THAT THE ASSESSEE HAS GIVEN ITS PREMISES INC LUDING PLANT AND MACHINERY ON LEASE RENT TO VSSK. THUS, IT WAS THE WELL THOUGHT AND CONSCIOUS ACTION ON THE PART OF ASSESSING OFFICER TO H AVE ACCEPTED THE CONTENTIONS OF THE ASSESSEE. THE LD. AR OF THE ASSESSEE IN SUPPORT OF HIS SUBMISSIONS ON THE PRINCIPLE OF DOCTRINE OF CONSISTENCY HAS PLACED RELIANCE ON THE DECISION OF HON'BLE SUPREME COURT OF INDIA IN THE CASE OF R ADHASOAMI 9 ITA NO. 2026/PN/2013, A.Y. 2010-11 SATSANG VS. COMMISSIONER OF INCOME TAX (SUPRA). IN THE SA ID CASE THE HON'BLE APEX COURT HAS HELD THAT WHEN THE INCOME DERIVE D BY THE ASSESSEE WAS CLAIMED TO BE EXEMPTION U/S. 11 & 12 OF THE ACT AND THE SAME WAS ALLOWED, IN THE ABSENCE OF ANY MATERIAL CHANGE A DIFFERENT VIEW THAN THAT TAKEN IN EARLIER YEARS, COULD NOT BE TAKE N. THE HON'BLE APEX COURT FURTHER, ON THE PRINCIPLE OF RES DUDICATA IN INC OME TAX PROCEEDINGS HELD AS UNDER : 9. WE ARE AWARE OF THE FACT THAT, STRICTLY SPEAKIN G, RES JUDICATA DOES NOT APPLY TO INCOME TAX PROCEEDINGS. AGAIN, EACH AS SESSMENT YEAR BEING A UNIT, WHAT IS DECIDED IN ONE YEAR MAY NOT APPLY I N THE FOLLOWING YEAR BUT WHERE A FUNDAMENTAL ASPECT PERMEATING THROUGH T HE DIFFERENT ASSESSMENT YEARS HAS BEEN FOUND AS A FACT ONE WAY O R THE OTHER AND PARTIES HAVE ALLOWED THAT POSITION TO BE SUSTAINED BY NOT CHALLENGING THE ORDER, IT WOULD NOT BE AT ALL APPROPRIATE TO ALLOW THE POSITION TO BE CHANGED IN A SUBSEQUENT YEAR. ON THESE REASONINGS, IN THE ABSENCE OF ANY MATERIAL CHANGE JUSTIFYING THE REVENUE TO TAKE A DIFFERENT VIEW OF THE MATTER AND, IF THERE WAS NO CHANGE, IT WAS IN SUPPORT OF THE ASSESSEE WE DO NOT THINK THE QUESTION SHOULD HAVE BEEN REOPENED AND CONTRARY TO WHAT HAD BEEN DECIDED BY THE COMMISSIONER OF INCOME TAX IN THE EARLIER PROCE EDINGS, A DIFFERENT AND CONTRADICTORY STAND SHOULD HAVE BEEN TAKEN. WE ARE, THEREFORE, OF THE VIEW THAT THESE APPEALS SHOULD BE ALLOWED AND T HE QUESTION SHOULD BE ANSWERED IN THE AFFIRMATIVE, NAMELY, THAT THE TR IBUNAL WAS JUSTIFIED IN HOLDING THAT THE INCOME DERIVED BY THE RADHASOAMI SA TSANG WAS ENTITLED TO EXEMPTION UNDER SECTIONS 11 AND 12 OF T HE INCOME TAX ACT OF 1961. 9. IN THE PRESENT CASE THE REVENUE HAS NOT BEEN ABLE TO SHOW FROM THE RECORDS THAT THERE WERE ANY DISTINGUISHABLE FEATURES IN THE ASSESSMENT YEAR UNDER APPEAL FROM THE EARLIER ASSESSMEN T YEARS WHICH WARRANTS CHANGE OF VIEW. THUS, IN VIEW OF THE FACTS AND CIR CUMSTANCES OF THE CASE AND WELL SETTLED LAW, THE REVENUE CANNOT BE PERMITTED TO TAKE A CONTRARY VIEW MERELY ON THE GROUND THAT THE P RINCIPLE OF RES JUDICATA DOES NOT APPLY IN THE INCOME TAX PROCEEDINGS. THE PRIN CIPLE OF CONSISTENCY HAS BEEN TIME AND AGAIN EMPHASIZED BY THE H ON'BLE APEX COURT AND VARIOUS HON'BLE HIGH COURTS HAS TO BE FOLLOWED. TAKING A DIVERGENT VIEW ON SAME SET OF FACTS UNDER IDENTICAL CIRCUMS TANCES 10 ITA NO. 2026/PN/2013, A.Y. 2010-11 WOULD LEAD TO UTTER CHAOS AND WOULD PUT JUDICIAL DISCIPLINE I N HAYWIRE. THEREFORE, THE CLAIM OF THE ASSESSEE IS LIABLE TO BE ALLOWED ON THIS GROUND AS WELL. 10. THE LD. DR IN SUPPORT OF HIS CONTENTIONS HAS PLACED RELIA NCE ON THE DECISION OF HON'BLE MADRAS HIGH COURT IN THE CASE OF C IT VS. HI TECH ARAI LIMITED (SUPRA) AND THE DECISION OF HON'BLE DELHI HIG H COURT IN THE CASE OF COMMISSIONER OF WEALTH TAX VS. MEATTLERS (P) LTD. (SUPRA). AFTER CONSIDERING THE SAME WE ARE OF THE CONSID ERED VIEW THAT THE SAME ARE DISTINGUISHABLE AND WOULD NOT APPLY IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. 11. IN GROUND NO. 2, THE ASSESSEE HAS ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN NOT ALLOWING THE EXPE NDITURE DEBITED TO THE PROFIT AND LOSS ACCOUNT. A PERUSAL OF THE IMPUGNED ORDER SHOWS THAT THE ASSESSEE HAS CLAIMED BUSINESS EXPENDITUR E OF ` 1,70,91,717/-. IN THE ABSENCE OF ANY CORROBORATIVE EVIDE NCE THE ASSESSING OFFICER HAS GRANTED AD HOC EXPENDITURE OF ` 5,00,000/- TOWARDS ADMINISTRATIVE AND LEGAL EXPENSES AND DEPRECIATION ` 85,84,412/-. THE LD. AR IN SUPPORT OF HIS SUBMISSIONS HAS D RAWN OUR ATTENTION TO THE PROFIT AND LOSS ACCOUNT AND BALANCE SHE ET AS ON 31-03-2010, WHEREIN VARIOUS EXPENDITURES ARE SHOWN TO H AVE INCURRED TOWARDS EMPLOYEES PAYMENTS, EMPLOYEES PF, EMPLOYEE TRA VELLING ALLOWANCE, VEHICLE HIRE CHARGES ETC. THE CONTENTION OF THE ASSESSES IS THAT ALTHOUGH THE FACTORY PREMISES WERE LEASED OUT, THER E WERE CERTAIN OTHER ACTIVITIES THAT WERE CARRIED OUT BY THE ASSESSEE FOR WHICH THE ASSESSEE HAD RETAINED THE EMPLOYEES. THE ASSESSEE HA S ALSO CONTRIBUTED TOWARDS EMPLOYEE PROVIDENT FUND AND RUNNING OF THE VEHICLES. WE ARE OF THE CONSIDERED VIEW THAT THIS ISSUED N EEDS A REVISIT 11 ITA NO. 2026/PN/2013, A.Y. 2010-11 TO THE FILE OF ASSESSING OFFICER. THE ASSESSEE SHALL FURNISH NECESSARY MATERIAL TO SUBSTANTIATE THE ACTIVITIES CARRIED OUT BY THE ASSESSEE AND ALSO IN SUPPORT OF EXPENDITURES CLAIMED TO THE SATISFACTION OF ASSESSING OFFICER. THE ASSESSING OFFICER AFTER CONSIDERING THE DOCUMENT S / MATERIAL FURNISHED BY THE ASSESSEE SHALL DECIDE THIS ISSUE A FRESH, IN ACCORDANCE WITH LAW. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY A LLOWED IN THE AFORESAID TERMS. ORDER PRONOUNCED ON WEDNESDAY, THE 29 TH DAY OF JUNE, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 29 TH JUNE, 2016 RK *+,%-.#/#)- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-IT/TP, PUNE 4. ' / THE CIT-I, PUNE 5. !*+ %%,- , ,- , . ./0 , / DR, ITAT, B BENCH, PUNE. 6. + 1 23 / GUARD FILE. // ! % // TRUE COPY// #4 / BY ORDER, %5 ,0 / PRIVATE SECRETARY, ,- , / ITAT, PUNE