TaxTMI 
TaxTMI 
2008 (1) TMI 422
X X X X Extracts X X X X
X X X X Extracts X X X X
....ccounting standard has been prescribed by the ICAI or CBDT under section 145. (iii) The method of accounting adopted by the Assessing Officer taking toll collection and allowing deduction for amortisation of the value of cost of construction suffers from serious defects in view of u (iv) The appellant had consistently following the completed contract method and reported this accounting policy since beginning; and (v) The impugned project could be said to have been completed at the end of the concessional period or at the earliest when specific costs of the project have been recouped for the reason that the project is linked with toll collection and the project can be said to have been substantially completed when the cost of the project is considerably recouped. (c) In reaching to the conclusion and confirming such huge addition, learned CIT(A) omitted to consider relevant factors, considerations, principles and evidences while he was overwhelmed, influenced and prejudiced by irrelevant considerations and factors. 2. The learned CIT(A) erred in not passing any speaking order in respect of losses of earlier years to be calculated as per accounting policy adopted by th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 28,993 gain on interest 7,16,28,993 payment ------------ 30,46,30,439 The above has been depicted as closing work-in-progress. The contention of the assessee was that all the revenue accrued should be first adjusted with the expenditure incurred and only after full costs have been recovered, any profit can be assessed as income liable to tax. This contention of the assessee was not accepted by the Assessing Officer; and he computed the profit on the activity of toll collected by the assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of this contention that, in the absence of any material change justifying the department to take a different view from that taken in earlier proceedings, the question of the exemption of the assessee should not have been reopened. Reliance was also placed on the Judgment of the Special Bench of the Tribunal rendered in the case of Shanker Rice Co. v. ITO [2001] 249 ITR (AT) 44 (Asr.) in support of the same contention. It was also submitted that in the subsequent years, i.e., in assessment years 2002-03, 2003-04 and 2004-05, the assessee has revised return of income on the same basis as adopted by the Assessing Officer in this year; and hence, in the preceding year i.e., assessment year 2000-01 also, the Assessing Officer may be directed to follow the same method of accounting resulting into loss of Rs. 1,019.16 lakhs in that year, which should be allowed to be set off in the present year and subsequent years. 5. Learned Departmental Representative of the revenue supported the orders of authorities below. 6. We have considered the rival submissions, perused the materials on record and have gone through the orders of authorities below and judgments cited by learned AR of the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ate for India in Council v. Radha Swami Satsang [1945] 13 ITR 520. The question before Hon'ble Apex Court was whether, for assessment years 1964-65 to 1969-70, the assessee-trust was entitled to exemption from income-tax under section 11 of the Income-tax Act, 1961. There was no Satguru long before the periods of assessment. The Tribunal held that the assessee was entitled to the exemption but on a reference, the High Court reversed the decision of the Tribunal. On appeal to the Supreme Court, order of the High Court was reversed and that of the Tribunal was confirmed. The following Para of this judgment of Hon'ble Apex Court is relevant, which is reproduced by us:- "We are aware of the fact that, strictly speaking, res judicata does not apply to income-tax proceedings. Again, each assessment year being a unit, what is decided in one year may not apply in the following year 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 subsequent years." 7.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....p; 243.79 1.22 ---------------------------------------------- Total: 541.00 ---------------------------------------------- From the above, it can be seen that the gross income of succeeding three years is only Rs. 541 lakhs as against loss to be carried forward after this year of Rs. 876.49 lakhs. Under these facts, we feel that disturbing the preceding year i.e., assessment year 2000-01 will not only result into disturbing of the assessment of the present year, which will be rupees nil as against income of Rs. 10.47 lakhs declared by the assessee in the return of income filed by it; but it will also result into nil income in subsequent three years as against taxable income as per the return filed by the assessee in these three years. Considering the facts of the present case in its totality, we feel that in the interest of justice, method followed by the assessee should be accepted in the present year by following the judgment of Hon'ble Apex Court rendered in the case of Radhasoami Satsang because facts in the present year and in the preceding year are same. In the preceding year, the assessee has applied for....