High Court Of Delhi
CIT vs. Rajeev Grinding Mills
Sections 69, 260A
Asst. Year 1993-94
D.K. Jain & Madan B. Lokur, JJ.
IT Appeal No. 239 of 2002
8th April, 2003
Counsel Appeared
Ms. Premlata Bansal, for the Appellant : C.S. Aggarwal with Prakash Kumar, for the Respondent
JUDGMENT
D.K. Jain, J. :
This appeal by the Revenue under s. 260A of the IT Act, 1961 (for short “the Act”) is directed against order, dt. 19th March, 2002, passed by the Tribunal, Delhi Bench, New Delhi, in ITA Nos. 1518/Del/1997 and 2611/Del/1997, pertaining to the asst. yr. 1993-94. The following questions have been proposed as substantial questions of law :
“(a) Whether Tribunal was correct in law in deleting the trading addition of Rs. 1,03,12,267 made by the AO on account of sale of spices excessively claimed by the assessee as grinding loss ?
(b) Whether Tribunal was correct in deleting the addition when the accounts maintained by the assessee did not reflect the true and correct profits ?
(c) Whether Tribunal was correct in deleting the trading addition made by the AO on the basis of independent enquiry even when the assessee did not maintain any stock register or daily processing register ?
(d) Whether, order of Tribunal was perverse in law and on facts when it did not consider the facts found by the AO ?”
2. Briefly stated the background facts are as follows : The respondent-assessee is engaged in the business of grinding of various spices received from one M/s M.D.H. (P) Ltd., a sister-concern of the assessee, on job-work basis. During the course of assessment proceedings for the relevant assessment year, the AO noticed that the assessee had claimed grinding loss at 14.70 per cent. Considering the same to be excessive, as compared to the earlier years, he allowed grinding losses at 6 per cent on estimate basis, thereby making trading addition of Rs. 1,03,12,267 to the income declared.
3. Being aggrieved, the assessee preferred appeal to the CIT(A). The CIT(A) again estimated the addition at Rs. 15 lakhs to “plug the possibility of leakage and pilferage”. Resultantly, the assessee got relief of Rs. 88,12,267.
The assessee as well as the Revenue carried the matter in further appeals to the Tribunal. By the impugned order, the Tribunal has deleted the entire addition made by the AO. Hence the present appeal.
We have heard Ms. Premlata Bansal, learned senior standing counsel for the Revenue and Mr. C.S. Aggarwal, learned counsel for the respondent-assessee.
It is strenuously urged by Ms. Bansal that findings recorded by the Tribunal are perverse inasmuch as it has failed to take into consideration the material brought on record by the AO while making the aforenoted addition. It is, thus, pleaded that the impugned order involves a substantial question of law.
Mr. Aggarwal, learned counsel for the assessee, on the other hand while supporting the impugned order, submits that as a matter of fact, the AO was not justified in taking into consideration the grinding loss, if any, in the hands of the assessee because the assessee was only accounting for the grinding charges which it was getting from the said M/s M.D.H. (P) Ltd.
In our view, the impugned order of the Tribunal does not involve any substantial question of law requiring our consideration. We find that while deleting the trading addition in toto, the Tribunal has noted that in the immediately proceeding two assessment years, namely asst. yrs. 1991-92 and 1992-93, the first appellate authority had deleted the trading additions made on account of rate difference and further in respect of asst. yr. 1994-95, the assessee had declared grinding loss at 14.30 per cent which was accepted by the Department as such under s. 143(1) of the Act. Moreover, in respect of asst. yr. 1995-96, the assessee had declared grinding loss at 17.25 per cent which was again accepted by the Revenue while making a regular assessment under s. 143(3) of the Act. The Tribunal has also noted that in subsequent assessment years also the grinding loss declared by the assessee at 12.44 per cent and 12.58 per cent has been accepted by the Department when assessments have again been under s. 143(3) of the Act. These facts are not disputed by learned senior standing counsel for the Revenue.
In the light of the aforenoted facts, we feel that the Tribunal was justified in holding that the Revenue should not have taken a different view insofar as the present assessment year was concerned. As observed by the apex Court in Radhasoami Satsang vs. CIT (1991) 100 CTR (SC) 267 : (1992) 193 ITR 321 (SC), though the principles of res judicata do not apply to income-tax proceedings, particularly when each assessment year is an independent unit, but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year.
We do not find any perversity in the impugned order, as pleaded by learned counsel for the Revenue, warranting admission of the appeal. In our opinion, no question of law, much less a substantial question of law, arises from the impugned order.
We, accordingly, decline to entertain the appeal. Dismissed.
[Citation : 279 ITR 86]
