TMI Blog2011 (4) TMI 827X X X X Extracts X X X X X X X X Extracts X X X X ..... om other sources while computing the income from other sources. If the assessee is eligible to establish a nexus between the expenditure incurred and the income derived, then certainly he would be entitled to the deduction under the aforesaid provision. Even that exercise has not been done by any of the authorities - In that view of the matter, the order passed by the three authorities is not in accordance with law and cannot be sustained - Decided in favour of assessee. - IT APPEAL NO. 26 OF 2011 - - - Dated:- 19-4-2011 - N. KUMAR, RAVI MALIMATH, JJ. S. Parthasarathi for the Petitioner. M.V. Seshachala for the Respondent. JUDGMENT N. Kumar, J. The assessee has preferred this appeal challenging the order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding. However, the Assessing Authority did not agree with the said submission, disallowed the expenditure under other heads amounting to Rs. 49,27,648 and passed the order. Aggrieved by the same, the assessee preferred an appeal to the Commissioner of Appeals who dismissed the appeal insofar as aforesaid claim though he granted reliefs on other heads. Aggrieved by the same, the assessee preferred an appeal to the Tribunal, wherein the Tribunal upheld the orders passed by the lower authorities and dismissed the appeal. Aggrieved by the same, the assessee is before this Court. 3. The learned Counsel for the assessee contends that though the principles of res judicata is not applicable to the assessment orders passed each year, however, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that, strictly speaking, res judicata does not apply to IT 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 a subsequent year. One these reasonings, in the absence of any material change justifying the Revenue to take a different view of the matter - and, if there was no change, it was in support of the assessee - we do not think the question should have been reopened an a contrary t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efer the matter to a Bench of superior strength or in some cases to a Bench of superior jurisdiction." 6. Therefore, when the principle of res judicata is raised by an assessee, the Assessing Authority has to carefully look into the earlier orders passed, the nature of expenditure claimed and allowed and then keeping in mind that background has to consider the deductions claimed in the relevant assessment year and thereafter should decide whether the principles of res judicata is attracted or not. Such an exercise has not been done by any of the three authorities before whom the said plea was persistently raised by the assessee. In the absence of relevant material, we are not in a position to say whether the principle of res judicata in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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