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Judgment
@JUDGMENT-JUDGMENT
P.R. Ramachandra Menon, CJ
The Revenue is before this Court. Grievance is against the Annexure A-1 order passed by Income Tax Appellate Tribunal, Raipur on 23-10-2018,
whereby the appeal preferred by the Assessee against the order dated 30-11-2017 of the Commissioner of Income Tax (Appeal)-I, Raipur, in relation
to the assessment year 2014-15, came to be allowed.
The assessment was finalized in terms of Section 143(3) of the Income Tax Act as per order dated 27-12-2016, by making an addition of Rs.
1,94,31,98,824/- to the income declared; which came to be challenged by filing an appeal before the Commissioner of Income Tax (Appeals)-I. The
merit was considered, but interference was declined and the appeal was dismissed as per order dated 30-11-2017. This was taken up by the assessee
by filing a further appeal before the Tribunal as aforesaid, which ultimately led to the order dated 23-10-2018 (Annexure A-1); which is put to
challenge in this appeal; contending that the Tribunal has not properly appreciated the facts and figures in the light of relevant provisions of law and
precedents and that there is miscarriage of justice.
It is in the said context that the Revenue has suggested some questions as questions involving substantial questions of law in terms of Section 260A
of the Income Tax Act, 1961, which are in the following terms:
“1. Whether on points of law and on facts & circumstances of the case, the Ld. ITAT was justified in setting aside the order of CIT(A) who
upheld the addition of Rs. 1,94,31,98,824/- made by the assessing officer, thereby ignoring the assessee's own admittance of change in the method of
accounting adopted during the financial year in hand as was mentioned in From 3CD at point no. 13(b), marked as 'Yes' and also in the note 1.4 of the
change in accounting policy under 1 of Balance Sheet as on 31.03.2014, thereby rendering the decision which is perverse?
 Whether on the facts & circumstances of the case and on points of law, the Ld. ITAT was justified deleting the addition of Rs.1,94,31,98,824/-
upheld by the CIT(A) thereby ignoring the ratio of Ld. ITAT Delhi 'D' Bench in the case of Luxor Writing Instruments Pvt. Ltd. Vs DCIT, Circle-
4(1), Delhi in ITA No. 3816/Del./2011 wherein the appeal of the assessee was dismissed by holding that “the income under the head “profit and
gains of business or profession†or “income from other sources†shall be computed according with either cash or mercantile system of
accounting regularly employed by the assessee and once the method has been chosen it should be employed regularly by the assessee and assessee
may not be permitted to change it in the subsequent years?
 Whether on points of law and on facts & circumstances of the case, the Ld. ITAT was justified in setting aside the decision of the CIT(A), thereby
giving a sweeping general observation that since in subsequent years no contrary view was taken by the AO, thence the addition of Rs.
1,94,31,98,824/- in the financial year in hand cannot be upheld, thereby ignoring the fact that each income tax proceeding is separate and distinct and
the precedent of Res-Judicata is not applicable to Income Tax proceedings, thereby ignoring the ratios judgment of the Hon'ble Supreme Court in the
cases of New Jahangir Vakil Mills Co Ltd vs CIT (SC) 49 ITR 13 7and Bharat Sanchar Nigam Limited and Anr Vs UOI & Ors (SC) 282 ITR
273?â€
However, on going through the order passed by the Tribunal, it is evident that a meticulous analysis of the facts and figures in the light of the legal
provisions and precedents has been done by the Tribunal. It would be worthwhile to note that the subsequent events, insofar as, the assessee is
concerned, have also specifically noted in paragraph 21, with regard to the changed stand of the Revenue in respect of the assessment for the
subsequent years. To avoid repetition, we find it appropriate to extract paragraphs 20 & 21 of the order passed by Tribunal as part of the order so as
to have a clear picture as to the course and events:
“20. We find the Ahmedabad Bench of the Tribunal in DCIT vs. Gujarat State Civil Supplies Corporation Ltd. in ITA No. 334/Ahd/2014 & CO
No. 186/Ahd/2014, order dated 01.06.2017 has observed as under:-
'5. We have heard the rival contentions perused the material as per record. We have noticed that the assessee company was set up by the
Government of Gujarat under the companies Act, 1956. The assessee company manage the public distribution system and other public welfare
scheme on behalf of the Government of Gujarat. The Government of Gujarat has been providing handling commission as per the Government of
Gujarat (GR) Government Resolution. We observed that the surplus which was earned by the assessee for the activities carried out on behalf of the
Government of Gujarat belonged to the Government and payable to the Government along with interest after deducting of commission earned by the
assessee. We further observed that the commission income earned by the assessee on the activities carried on behalf of the Government and other
income from its own activities are taxable in the hand of assessee.
5.1 We have further noticed that in the earlier assessment year the assessing officer has accepted the similar accounting practices followed in the
case of the assessee. We considered that surplus earned on behalf of the Government for carrying out function of Public Distribution System as agent
of Government is not taxable in the hand of the assessee.
5.2 We have also perused the detail facts and findings elaborated in the order of the Ld.CIT(A) and considered that the Ld.CIT(A) is justified in
deleting the addition made by the Assessing Officer by stating that surplus earned from functioning of PDS on behalf of Government cannot be taxed
in the hand of the assessee. In view of the above stated facts and findings we uphold the order of the Ld.CIT(A).'
The various other decisions relied on by the ld. counsel for the assessee in the paper book also supports its case. The submission of the ld. counsel
for the assessee that in subsequent years, since subsidy receipt has been accepted by the Revenue, although u/s 143(1), and no action u/s 147 or 263
has been taken could not be controverted by the ld. DR. We, therefore, are of the considered opinion that the concession component received by the
assessee Government company in the course of implementing government projects of PDS as its agent, the surplus of which, if any, was refundable or
adjustable in future was not income of the assessee. We, therefore, set aside the order of the CIT(A) and the grounds raised by the assessee are
allowed.â€
After hearing learned standing counsel for the appellant/ Revenue, we do not find any reason to take a different view, especially in the context as
discussed by the Tribunal in detail.
There is no substantial question of law, so as to call for interference of this Court. Appeal fails and it is dismissed accordingly.