Forgot password
New User/ Regiser
⇒ Register to get Live Demo
2010 (5) TMI 487 - ALLAHABAD HIGH COURT
Business income or Income from House Property – Right from the assessment years 1986-87 to 1992-93, the Department accepted the claim of the assessee to the effect that the rental income was taxable under the head "Profits and gains of business or profession - The order for other years was passed under section 143(1)(a) of the Act treating the income from house property. In the assessment years 1993-94 and 1994-95, the Assessing Officer taxed the income under the head "Income from house property" without looking into the past assessments right from 1986-87. - Held that: - As a general rule, each year's assessment is final only for that year and does not govern later years, because it determines the tax for a particular period. It is, therefore, open to the Revenue/taxing authority to consider the position of the assessee every year for the purpose of determining and computing the liability to pay tax or octroi on that basis in subsequent years. A decision taken by the authorities in the previous year would not estop or operate as res judicata for subsequent year.
the Revenue cannot act mechanically without applying its mind to earlier facts and circumstances under which a view was taken by the taxman and the facts and circumstances of the assessment year in question calling to depart from earlier view. Where there is a fundamental aspect permeating through different assessment years allowed by the authorities to sustain, it would not be appropriate to change the view in a subsequent year except on justifiable grounds like change of circumstances or non-consideration of relevant material or statutory provisions, or failure on the part of the assessing or appellate authority to exercise jurisdiction for extraneous reason or small amount of revenue involved or other justifiable ground depending on the facts of each case.
The assessee constructed the "Goel Complex" exclusively as part of its commercial activity to earn income by letting it on rent. Accordingly, the income so drawn shall be business income.
