High Court upholds assessee's appeal, citing consistency principle for assessment years 1989-90 and 1990-91.

The High Court dismissed the appeals in favor of the assessee, citing the principle of consistency and relevant judgments. The Court upheld the Commissioner's order for the assessment year 1990-91, deciding that the Revenue could not challenge a similar finding for the earlier year. Additionally, the Court ruled in favor of the assessee for the assessment year 1989-90, allowing a different method for computing profit under section 115J. The High Court also favored the assessee regarding the method for working out 'book profit' under section 115J(1A) of the Income-tax Act, based on the principle of consistency and relevant case laws.

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Issues:
1. Disposal of I. T. A. Nos. 46 and 47 of 2003 for the assessment year 1990-91.
2. Computation of profit under section 115J of the Income-tax Act for the assessment year 1989-90.
3. Acceptance of the method for working out 'book profit' under section 115J(1A) of the Income-tax Act.

Issue 1: Disposal of I. T. A. Nos. 46 and 47 of 2003 for the assessment year 1990-91:
The appellant filed applications for the disposal of I. T. A. Nos. 46 and 47 of 2003, seeking to exclude a specific amount of depreciation for the purpose of ascertaining book profits. The Commissioner of Income-tax (Appeals) had earlier passed an order in favor of the assessee for the assessment year 1990-91, which had attained finality as no appeal was filed by the Revenue before the Tribunal. The High Court noted the finality of the Commissioner's order and applied the principle of consistency, stating that once the Revenue accepted the Commissioner's view for 1990-91, it could not challenge a similar finding for the earlier year. Citing relevant judgments, the Court dismissed the appeals, deciding the question of law against the Revenue and in favor of the assessee.

Issue 2: Computation of profit under section 115J for the assessment year 1989-90:
For the assessment year 1989-90, the Assessing Officer computed profit under section 115J of the Income-tax Act differently from the revised return filed by the assessee. The Assessing Officer insisted on providing depreciation as per the Companies Act's Schedule XIV, disregarding the revised return's computation. The Commissioner of Income-tax (Appeals) upheld the Assessing Officer's view. However, the Tribunal ruled in favor of the assessee, citing a judgment that allowed the assessee to adopt a different method for working out depreciation for section 115J purposes. The High Court, considering the principle of consistency and relevant case laws, decided the issue in favor of the assessee for the assessment year 1989-90.

Issue 3: Acceptance of the method for working out 'book profit' under section 115J(1A) of the Income-tax Act:
The Revenue challenged the method adopted by the Assessing Officer for working out 'book profit' under section 115J(1A) of the Income-tax Act. The High Court, after reviewing the Commissioner's order for the assessment year 1990-91, held that the principle of consistency applied. The Court found that the question of law favored the assessee based on a judgment from another case. Consequently, the Court allowed the applications, dismissed the appeals, and decided the question of law against the Revenue and in favor of the assessee.

In conclusion, the High Court's judgment addressed the disposal of appeals for different assessment years, the computation of profit under section 115J, and the acceptance of the method for working out 'book profit' under the Income-tax Act, providing detailed analysis and applying legal principles and relevant case laws to decide in favor of the assessee.

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