TMI Blog2009 (11) TMI 655X X X X Extracts X X X X X X X X Extracts X X X X ..... icer in spite of the appeal to the learned CIT(A), Panchkula in the appeal on this ground." 2. The brief background of the captioned dispute can be summarized as follows. The assessee is a Government of Haryana undertaking engaged in the activities of procurement, warehousing etc. of wheat, paddy and other agricultural produce on behalf of the State and Central Government agencies. It has been established in terms of the Warehousing Act, 1962. For the year under consideration, it filed a return of income declaring loss of Rs. 18,05,12,357 which inter alia included a claim for exemption under section 10(29) of the Income-tax Act, 1961 (in short the Act ) amounting to Rs. 31,22,06,820 pertaining to warehousing income. The return of income filed by the assessee was subject to scrutiny assessment under section 143(3) of the Act vide order dated 17-1-2005. The entire claim of the assessee for exemption under section 10(29) was denied. The assessment was carried in appeal before he CIT(A). who vide order dated 2-9-2005 considered the aspect of exemption under section 10(29) with regard to the warehousing income earned from Food Corporation of India (FCI) amounting to Rs. 10,90, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate function than acting as an agent of FCI for purchases, sales and storage of produce, etc. The Assessing Officer noted that the assessee corporation was letting out godowns to other agencies for storage of produce and also storing its own produce purchased as an agent of FCI. The assessee was earning rental income on godowns let out to other agencies. As regards the produce purchased by the assessee as an agent of FCI, the same is sold to FCI at fixed rates. The Assessing Officer noted that the sale rates fixed by the Central Government takes into account various factors like particulars of purchase, procurement expenses, interest factor, storage charges factor, etc. The Assessing Officer was of the view that the whole receipt is a composite trading receipt and cannot be split up under various heads. For this reason, the Assessing Officer held that, the storage charges recovered as a part of sale price from FCI cannot be treated as rental income/warehousing income so as to qualify, for deduction under section 10(29) of the Act. Therefore, the receipt of Rs. 10,90,82,220 received from the FCI was not considered as income from letting out of godowns but was considered as trading r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he balance sheet. This is only a contra entry to reflect the storage charges and not an expenditure. 8.2 As against this, the learned Departmental Representative relied on the order of the Assessing Officer and pointed out that it is a payment to self and a notional debit. This has been found to be credited to the warehousing income and debited to the trading account of wheat. So it cannot be allowed. 8.3 We have considered the rival submissions and have gone through the material available on record. We find that the position that this is a contra entry was not explained to the Assessing Officer. The assessee has explained to the Assessing Officer. The assessee has explained that it received Rs. 10,05,38,502 on trading of wheat, which included rental income of Rs. 2,72,82,673 is rental income. Therefore, we send this matter back to the file of the Assessing Officer to examine this issue in the light of submissions of the assessee and in case it is a rental income of warehouses, it should be allowed as exempt under section 10(29) of the Income-tax Act. The Assessing Officer shall pass order after hearing the assessee at length." [Emphasis supplied] 4. Subsequent to the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, the same are included in the above referred account head. However, while closing the books of account necessary adjustment entries are being passed and the storage charges are debited to the wheat trading and P L a/c and credited to warehousing charges being income from rents from letting out of godowns. Since the income from storage charges is exempt, the deduction for storage charges has to be allowed while computing taxable income from trading in wheat. The Hon ble Tribunal has held accordingly in the case of the assessee for the assessment year 1994-95 vide its order dated 1st January 1998 in ITA No. 3342/Delhi/1997. My predecessor has also acted accordingly for the assessment years 1994-95, 1995-96 and 1996-97. In the assessment year 1997-98 also, the same view has been taken." 6. On the principle of consistency, it is canvassed that the claim of the assessee in the instant year be also allowed. The learned counsel for the assessee has also referred to the paper book filed which inter alia contains the written submissions made before CIT(A). It is contended that the points made out by the Assessing Officer to deny the claim of the assessee are either irrelevant or d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order of the Tribunal dated 1-1-1998 ( supra ) in assessee s own case for the assessment year 1994-95 and also the discussion made by the Assessing Officer in assessment order under section 143(3) for the assessment year 1998-99, dated 13-3-2000 ( supra ) whereby exemption under section 10(29) has been allowed on similar income. We have also perused the order passed by the Assessing Officer for assessment year 1994-95 dated 8-9-1998 ( supra ) in pursuance to the directions of the Tribunal dated 1-1-1998 whereby similar income has been allowed exemption/deduction under section 10(29) of the Act. We have also perused copies of annual accounts submitted by the assessee for the assessment years 1994-95 upto 1998-99. In fact, in the instant assessment year also, the claim of the assessee stands on similar factual matrix as in the aforesaid assessment years. Admittedly, for the assessment year 1994-95 to assessment year 1998-99, the claim of the assessee for exemption under section 10(29) on account of storage charges/warehousing income received from FCI stands admitted by the Assessing Officer. The learned Departmental Representative, appearing for the Revenue did not controvert the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption under section 10(29) of the Act with respect to a similar income on 8-9-1998 ( supra ) for the assessment year 1994-95. Quite clearly, the said approach of the Assessing Officer was not only inexplicable but was also beyond jurisdiction. The matter was also compounded further when the CIT(A), on an appeal by the assessee, remanded the issue to the file of the Assessing Officer vide order dated 2-9-2005. In the remand proceedings too, the Assessing Officer has passed an order similar to that made on 17-1-2005 in utter disregard to the stand taken by the Assessing Officer in the past years, which was in consonance with the order of the Tribunal dated 1-1-1998 ( supra ). In our considered, opinion, the claim of the assessee is being shut out by the Income-tax authorities without any valid justification and in disregard to the accepted principles of consistency. We are conscious of the fact that the principles of res judicata do not apply to the income-tax proceedings but it is also an established legal position that on issues which permeate through more than one assessment year, if the Revenue has accepted a stand in the past, it is not open for the Revenue to take a diffe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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