C.I.T Kol Iv v. Kanoria Chemicals & Industries Ltd.

This appeal is at the instance of the revenue and is directed against order dated 20th December, 2004 passed by the Income Tax Appellate Tribunal, ‘E’ Bench, Kolkata in ITA No. 2678 (Cal) of 1994 for the Assessment Year 1986-87.

It appears that the contention of the appellant before the tribunal below was that the learned Commissioner of Income Tax (Appeals) erred in directing the assessing officer to exclude sales tax subsidy amounting to Rs. 29,63,008/- from the total income of the assessee. It was contended on behalf of the assessee that it would appear from the order of CIT (A) dated 22nd January, 1993 passed for the assessment year 1985-86 that similar issue was taken in ground No. 4 by the assessee in the said assessment year and was decided in favour of the assessee by the CIT (A) vide its order dated 22nd January, 1993 in Appeal No. 397.CC-XXVIII/CIT(a)C-I/88-89. It was further contended that the revenue had not preferred any second appeal before the Tribunal against the said order and as such, the said question cannot be reopened.

It appears from the order impugned that the tribunal below was quite conscious of the decision of the Hon'ble Supreme Court in the case of Raoaasoami Satsang v. C.I.T, reported in 193 I.T.R 321 (SC) wherein it was held that strictly speaking the principle of res judicata did not apply to income tax proceedings. Nevertheless where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and the parties have allowed that position to be sustained by not challenging the order, it would not be appropriate to allow the position to be changed in a subsequent year.

The tribunal also took note of the similar view of the Hon'ble Supreme Court in the cases of Union of India v. Kaumudini Narayan Dalal [ 249 I.T.R 219 (SC) ] and Union of India v. Satish Pannalal Shah [249 ITR 221 (SC)].

After hearing the learned counsel for the parties and after going through the materials on record, we find that on the previous occasion the question of excluding sales tax and its subsidy having attained finality for not preferring appeal by the revenue, the same question should not be permitted to be re-agitated over again at the instance of the revenue.

We, thus, find that no substantial question of law is involved in this appeal and consequently, the same is dismissed.

In view of the order of dismissal passed in this appeal, the connected stay application has become infructuous and the same is also dismissed accordingly.

Urgent photostat certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.

(BHATTACHARYA, J.)

(Dr. SAMBUDDHA CHAKRABARTI, J.)

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AR[CR]