Decided on January 10,2008



R.K. Gupta, Judicial Member - (1.) THESE are six appeals by the department against the order of the CIT (A) relating to assessment years 1996-97 to 2001-02.
(2.) In appeal for AY 1996-97 to 2000-01, the department is objecting in quashing the notice Under Section 148 for initiating proceedings Under Section 147 holding the reassessment proceedings Under Section 147 and the notice Under Section 148 issued by the Assessing Officer for all these assessment years as invalid and void ab-inito ignoring and without appreciating the evidences on record, the opportunity of being heard given to the assessee and the correct factual and legal position of the case. In appeal for AY 2001-02, the department is objecting in directing the Assessing Officer to assess the income from warehousing activity and handling charges as income from business without appreciating the fact that the assessee is in respect of fixed sum on monthly / annual basis from the parties for the use of go-down and further, the TDS certificates furnished by the assessee also show the receipts as rental income from warehousing activity as property income instead of business income claimed by the assessee. First, we will take up the appeals on legal ground. 3.1 The assessments for five years i.e. AYs 1996-97 to 2000-01 were completed Under Section 143 (3) r.w.s 147 determining total income of Rs. 29,46,609/-, Rs. 38,65,214/-, Rs. 35,07,868/-, Rs. 27,01,339/- and Rs. 20,66,869/ respectively. 3.2 On perusal of assessment records, the Assessing Officer noticed that the assessee company has shown income arising out of warehousing charges and handling charges. These receipts have been shown as business income. The TDS has been deducted by the tenants at the rate applicable for rental income. The nature of payments in the TDS certificate has been shown as 'rent'. In facts, these receipts should have been taxed under the head 'income from house property' instead of 'business income'. Hence, there was reason to believe that income has escaped assessment in this case. Therefore, the case was reopened for assessment Under Section 147 of the Act. 3.3 Before the CIT (A), it was submitted that these warehousing structures are in possession of the assessee since about 1966. They are used for warehousing activities for customers. The goods of customers are stored in theses warehouse premises, and for their use, 'warehousing' charges are recovered. This income is being shown as income from business and till AY 1995-96, the income from warehousing activities has been shown and treated as income from business. Earlier in AYs 1991-92 & 92-93 the assessment was done under scrutiny on this matter where the income from warehousing activities was assessed as 'income from business activity'. It was further submitted that thereafter, assessment for AY 90-91 was reopened Under Section 148 to treat this income as income from house property. In reassessment also, after considering the fact of this case, it was held that it was the income from business. Reassessment order was passed on 30.09.94. The Assessing Officer has held in this assessment order that the income from warehousing business is charged to tax under the head 'business' and not under the head 'income from house property'. In AY 94-95 & 95-96 the returns were accepted by the department in which the income from warehousing activities shown income from business and no change has been made by the department till AY 95-96. It was further submitted that since there is no change in the source of this income has not been changed, therefore, the Assessing Officer was not justified in deviating from the stand already taken in earlier years in the case of the assessee on the same issue without bringing on record any new fact which can be enable the Assessing Officer to deviate from its earlier decisions. The warehousing properties are the same and the charges, which are being received by the assessee company, are the same expect in variation of the amount, but not in character and they are being shown under the head 'income from business. It was therefore, argued that the principal of res-judicata is applicable in the case of the assessee company in view of the fact that no new fact has been brought on record by the Assessing Officer in support of any material change in the facts which were in existence in earlier years where the income was shown as income from business and accordingly, it was accepted by the department. Accordingly, it was submitted that the Assessing Officer was not justified in reopening of the assessment for taking difference view. Reliance was placed on the decision reported in 64 ITR 388, 22 ITR 208, 30 ITR 618, 178 ITR 311 and 77 IR 410. Detailed written submissions were also filed before the CIT (A). To verify the facts of the case, the case records were asked to be produced by the CIT (A) from the department. The Assessing Officer having jurisdiction over the case of the assessee had produced the case records. The copy of the reasons recorded was also produced. 3.4 After considering the case records and the submissions of the assessee, the CIT (A) found that the Assessing Officer was not justified in reopening of the assessment for all these years. The CIT (A) recorded his findings that on same set of facts the Assessing Officer has allowed claim of the assessee for the last so many years. The case laws on which reliance placed were found in support of the case of the assessee. Accordingly, the CIT (A) has held that the assessments completed Under Section 143(3) r.w.s.147 are void ab-inito and accordingly, they were cancelled. Now, the department is in appeal here before the Tribunal.
(3.) THE Ld Dr placed reliance on the order of the Assessing Officer. It was further submitted that some new information have gathered by the Assessing Officer before issuing notice Under Section 148 for AY 96-97 to 2000-01.It was further submitted that res-judicata does not apply in Income Tax proceedings. Reliance was placed in support of this contention on the decision reported in 203 ITR 456 and 263 ITR 34. THE ld counsel on the other hand firstly placed reliance on the order of the CIT(A). It was further submitted that rule of consistency has to be followed. It was further submitted that there is no charge of facts or material for the year under consideration and the year for which the claim of the assessee has been accepted in past. THErefore, on the same set of facts, the department now cannot take a different view. Reliance was placed on the decisions reported in 245 ITR 492(Del) : 77 ITR 410(P&H) : 215 ITR 323(Guj) and 109 ITR 229 (Cal). THE contentions raised before the CIT(A) were reiterated. Further reliance was placed on the decision of the Tribunal in the case of Aipita Marketing Pvt. Ltd. decided in ITA No. 672 & 673/ Mum/2004 vide order dated 24.08.2007 in which on similar facts, reopening of the assessment was quashed. It was submitted that in the case also the assessment was completed Under Section 143 (1) and thereafter assessment was reopened. However, the Tribunal found that on similar set of facts the claim of the assessment was held as bad in law.;

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