Commissioner of Income Tax vs Haryana State Industrial Development Corporation Ltd.

M.M. Kumar, J.—This order shall dispose of I. T. A. Nos. 588 and 590 of 2008 as common order has been passed in respect of the assessment years 2003-04 and 2004-05 in respect of the assessee-respondent while deciding I. T. A. Nos. 382 and 383/Chandi/2007 by the Income Tax Appellate Tribunal, Chandigarh (for brevity "the Tribunal"). The Tribunal has reached the conclusion that the method of accounting adopted by the assessee-respondent in relation to accounting of income for two different activities has been the same. The assessee-respondent is engaged in financing of industrial units and also developing industrial estates in the State of Haryana. It recovers the entire development charges from the allottees of the plots/sheds which is an activity carried on with no profit no loss basis. The conflict between the parties had arisen in relation to allocation of certain expenses which are not incurred directly for any particular activity. The case of the assessee has been that the matter of allocation adopted in respect of the assessment years in question has been the same as it was during the past years. The aforesaid method has been consistently accepted.

When the matter came up before the Commissioner of Income Tax (Appeals) the comments of the Assessing Officer were obtained. The Tribunal after perusal of the comments and order of the Commissioner of Income Tax (Appeals) found that the stand of the assessee-respondent was not controverted when it had claimed that methodology adopted in the assessment years in question was consistent with the past. Moreover, there was no change in the circumstances in respect of the assessment years in question requiring the Assessing Officer to depart from the aforesaid methodology which has been accepted in the past.

Having heard learned Counsel on the aforesaid issue, we find that the Tribunal has taken a correct view by applying the principle of consistency. It has rightly placed reliance on the judgment of the hon''ble Supreme Court rendered in the case of M/s. Radhasoami Satsang Saomi Bagh, Agra Vs. Commissioner of Income Tax, . The Hon''ble the Supreme Court in that case had negated the argument regarding application of principles concerning res judicata to the Income Tax proceedings. It was observed that where a fundamental aspect permeating through different assessment years has been found as a fact one way or the other and the parties had allowed that position to be sustained by not challenging that order then it would not at all be appropriate to permit that position to be changed in a subsequent year. The aforesaid view has been widely accepted, followed and applied by the Hon''ble Supreme Court in various judgments including the judgment rendered in the case of Municipal Corporation of City of Thane Vs. Vidyut Metallics Ltd. and Another, .

We have heard learned Counsel at a considerable length and do not find that any exception could be taken to the view expressed by the Tribunal. No question of law much less a substantial question of law would arise for determination by this Court warranting admission of the appeal. The appeals are wholly without merit and the same are accordingly dismissed.