Commissioner Of Income Tax, Jaipur-Ii, Jaipur v. Rajasthan State Mines And Mineral Ltd. 24, Uniyara Garden,Jaipur

1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANBENCH AT JAIPUR. DB INCOME TAX APPEAL NO.131/2004 Commissioner of Income Tax, Jaipur-II, Jaipur. Versus Rajasthan State Mines and Mineral Ltd. 24, Uniyara Garden,Jaipur. DATE OF ORDER ::: 14.12.2016. HON'BLE MR. JUSTICE K.S. JHAVERIHON'BLE MR. JUSTICE DINESH MEHTA Mr. Anuroop Singhi, for the appellant. 1.By way of this appeal, the appellant has challenged thejudgment and order of the Tribunal whereby the Tribunal hasdismissed the appeal preferred by the assessee and confirmedthe order of the CIT(A). 2.This Court while admitting the appeal on 05.10.2004,framed the following substantial question of law: “Whether in the facts and circumstances ofthe case and in law the ITAT was justified inallowing the sum of Rs.6,61,85,333.00/- asbusiness expenditure.” 3.Counsel for the appellant has contended that the order passed by the AO is just and proper and in that view of thematter the order of the CIT (Appeal) as well of the Tribunal arerequired to be reversed. 4.However, identical issue/contrary has been decided bythis Court in DB Income Tax Reference No.77/1995, in case ofCommissioner of Income Tax, Jaipur vs. M/s. Rajasthan State Mines & Mineral Ltd., Jaipur, decided on 21[st] April, 2016, and inDB Income Tax Reference No.29/1998, in the case ofCommissioner of Income Tax, Jaipur vs. M/s. Rajasthan StateMines & Minerals Ltd., Jaipur, decided on 21[st] April, 2016,relevant portion whereof is reproduced as under: “We find that while challenging the orderpassed on a proceeding under Section 148 ofthe Act of 196, the revenue took other issuesalso, which includes, the issue raised herein.The High Court accordingly framedsubstantial questions of law. It was as towhether the ITAT was justified in holding theexpenditure as business expenditure whenthe assessee had acquired benefits ofenduring nature, thus to be taken as capitalexpenditure. The revenue did not pursue theappeal and accordingly, the assessment gotconfirmed where the same expenditure wasacceptedtowardsrevenue/businessexpenditure. The question for our consideration is as towhether the same expenditure forsubsequent assessment year can be givendifferent treatment. No doubt, it is true that principal of resjudicata does not apply but whether therevenue can take different and inconsistentview on one and the same issue. Whetherpayment to the State Government for thework assigned to the assessee can be takenas business expenditure for one assessmentyear and capital expenditure for the nextyears? In the assessment year of 1989-90, itwas shown to be revenue/businessexpenditure. The proceedings under Section148 of the Act of 1961 were initiated but heldto be void. In the appeal before the HighCourt, a substantial question of law on theissue referred herein was framed but therevenue failed to pursue the issue as theappeal was dismissed for default. If the reference is answered in favour of therevenue by holding that amount of Rs.6 crorewaswronglyallowedtowardsrevenue/business expenditure, the outcomewould be nothing but inconsistency in the assessment for one and the same assesseeand, that too, for the one and sameexpenditure. If the argument taken by therevenue is allowed to be sustain then for theyear 1989-90, the same expenditure remainsin contradiction and, that too, when not onlythe revenue was having opportunity tochallenge the assessment but evensubstantial question of law was also framedon it but thereafter, it was not perused. In thecase of M/s. Radhasoami Satsang SaomiBagh, Agra vs. Commissioner of Income Taxreported in (1992) 1 SCC659, the issue of resjudicata and consistency has been dealt withpara Nos.18 & 19 are quoted hereunder forready reference: assessment for one and the same assesseeand, that too, for the one and sameexpenditure. If the argument taken by therevenue is allowed to be sustain then for theyear 1989-90, the same expenditure remainsin contradiction and, that too, when not onlythe revenue was having opportunity tochallenge the assessment but evensubstantial question of law was also framedon it but thereafter, it was not perused. In thecase of M/s. Radhasoami Satsang SaomiBagh, Agra vs. Commissioner of Income Taxreported in (1992) 1 SCC659, the issue of resjudicata and consistency has been dealt withpara Nos.18 & 19 are quoted hereunder forready reference: 18.We are aware of the fact that strictlyspeaking res judicata does not apply toincome tax proceedings. Again, eachassessment year being a unit, what isdecided in one year may not apply in thefollowing year but where a fundamentalaspect permeating through the differentassessment years has been found as a factone way or the other and parties haveallowed that position to be sustained by notchallenging the order, it would not be at allappropriate to allow the position to bechanged in a subsequent year. 19.On these reasonings in the absence ofany material change justifying the Revenueto take a different view of the matter and ifthere was not change it was in support of theassessee-we do not think the questionshould have been reopened and contrary towhat had been decided by the Commissionerof Income Tax in the earlier proceedings, adifferent and contradictory stand should havebeen taken. We are, therefore, of the viewthat these appeals should be allowed and thequestion should be answered in theaffirmative, namely, that the Tribunal wasjustified in holding that the income derived bythe Radhasoami Satsang was entitled toexemption under Sections 11 and 12 of theIncome Tax Act of 1961. The judgment in the case of Commissioner ofIncome Tax, Central, Kanpur Vs. JKCharitable Trust, Kamal Tower, Kanpurreported in (2009) 1 SCC 196 has beenreferred by learned counsel for the revenue but therein challenge on the same issue wasallowed in certain cases only. The case inhand is not such. In view of the above, we are of the opinionthat reference to the question cannot beanswered in favour of the revenue. It is morewhen, the case has peculiarity in as much asthe assessee before us is none-else but aGovernment undertaking. It is informed tothis Court that the matter was earlier takenbefore the High Power Committee as disputeis between the Government and itsundertaking.The fact aforesaid is also taken note of bythis Court while answering the referenceherein.In view of the discussion made above, we areof the opinion that the amount of Rs.6 croreacceptedtowardsrevenue/businessexpenditure is not illegal, rather taking intoconsideration the assessment year 1989-90,where the same expenditure was taken asrevenue/business expenditure, we areunable to take a consistent view andaccordingly, the reference is answeredagainst the revenue and in favour of theassessee.” 6.In that view of the matter, the issue is answered in favour of the assessee and against the department. 7.The appeal stands dismissed. (DINESH MEHTA), J. (K.S. JHAVERI), J. Asheesh Kr. Yadav 71