TMI Blog2017 (11) TMI 1562X X X X Extracts X X X X X X X X Extracts X X X X ..... eals)-IV, New Delhi for the quantum of assessment passed under section 143(3) for the assessment year 2010-11. In the grounds of appeal the sole ground raised by the Revenue reads as under : 1. Whether on the facts and in the circumstances of the case the learned Commissioner of Income-tax (Appeals) has erred in law in treating the rent received by the appellant amounting to ₹ 2,03,18,090 as 'Income from house property' instead of 'Income from other sources'. 2. At the outset, the learned counsel submitted that the issue whether income is to be taxed as income from house property or income from other sources now stands decided by the Tribunal in the assessee's own case for the assessment year 2007-08, 2008-09, wherein the Tribunal has held that income derived from property should be assessed under the head income from house property and consequently, all the benefit of deductions under the law should be allowed. 3. On the other hand the learned Departmental representative strongly relied upon the order of the Assessing Officer. 4. After considering the aforesaid submission and on a perusal on the impugned order as well as the material r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ange of opinion on the same material and facts in the subsequent assessment proceedings is not permissible until and unless the Assessing Officer has brought out any justified or proper reasoning for doing so. In the present case, the Assessing Officer accepted the claim of the assessee during the assessment years 2004-05, 2005-06 and 2006-07 finalised the assessment under section 143(3) of the Act and held that income, from PVR Ltd. is an income from house property. During the subsequent assessment proceeding for the year under consideration i.e., 2007-08 the Assessing Officer took a deviated and new view and held that income from PVR Ltd. was actually income from other sources because the agreement dated May 18, 2000 was not a rental agreement but it was an arrangement for running cinema business as per the new emerging requirements of the business. The Assessing Officer has not brought out any new fact or evidence to support this contention and simply held that the income from PVR Ltd. was not an income from house property. 13. During the first appellate proceeding the Commissioner of Income-tax (Appeals) also considered the issue of consistency and held against the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue of res judicata vis-a-vis the principle of consistency in taxation matters. Relevant portion of the hon'ble High Court's order is extracted hereunder (page 364) : In the case of Radhasoami Satsang v. CIT (supra), their Lordships of the hon'ble Supreme Court while dealing with the principle of consistency and the principle of res judicata observed that unless there is a material change justifying the Revenue to take different view of the matter, it shall not be proper for the Revenue to reopen and take contrary view. To reproduce the relevant portion from the judgment of Radhasoami Satsang (supra), to quote (page 329 of 193 ITR) : 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 a subsequent year. On these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 STC 489 ; [1962] 2 SCR 644 ; New Jehangir Vakil Mills Co. Ltd. v. CIT [1963] 49 ITR (SC) 137 ; [1964] 2 SCR 971, Amalgamated Coalfields Ltd. v. Janapada Sabha Chhindwara [1963] Supp 1 SCR 172 ; Devilal Modi v. STO [1965] 16 STC 303 (SC) ; [1965] 1 SCR 686 ; Joint Family of Udayan Chinubhai v. CIT [1967] 63 ITR 416 (SC) ; [1967] 1 SCR 913 ; M. M. Ipoh v. CIT [1968] 67 ITR 106 (SC) ; [1968] 1 SCR 65, Kapurchand Shrimal v. TRO [1969] 72 ITR 623 (SC) ; [1969] 1 SCR 691 ; CIT v. Durga Prasad [1971] 82 ITR 540 ; AIR 1971 SC 2439 ; Radhasoami Satsang v. CIT [1992] 193 ITR 321 (SC) ; [1992] 1 SCC 659 ; AIR 1992 SC 377 ; Society of Medical Officers of Health v. Hope (Valuation Officer) [1960] AC 551 ; Broken Hill Proprietary Co. Ltd. v. Municipal Council of Broken Hill [1925] All ER 675 ; [1926] AC 94 ; 95 LJPC 33 ; Turner on Res Judicata, 2nd Edn., para 219, page 193).' In the same judgment (supra), the hon'ble Supreme Court further proceeded to observe that, to quote (page 696 of 20 VST) : A decision reached in one year would be a cogent factor in the determination of a similar question in .a following year but ordinarily there is no bar against the investigation by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er assessment years for whatever reasons though the assessments were scrutinised under section 143(3) by the then Assessing Officers. For the first in the impugned assessment order for the assessment year 2007-08, the Assessing Officer examined the issue with reference to the various clauses of the operation and management agreement and gave a finding that the consideration received in terms of agreement is to be assessed as 'income from other sources'. The earlier assessments have also been reopened on the basis of the above findings and assessments have already been completed in those cases. Thus, to my mind, keeping in view the principle of consistency as interpreted above by the hon'ble courts, there has been no breach of this principle in the instant case either. 2.7 In view of the findings and discussion as well as the judicial pronouncement as discussed in the foregoing paragraphs, I hold that in the given circumstances of the case the consideration received by the appellant in terms of operation and management agreement date May 18, 2000 as amended on May 20, 2000 entered into with M/s. PVR Ltd. will be taxable under the 'income from other sources' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no assets, equipment, furniture, fixture other than building has been retained. by M/s. Priya Village Roadshow Limited. This recitals and documents specifically show that only cinema building was handed over to PVR Ltd. by the assessee for fixed consideration as mentioned in the schedule second of the agreement. We also observe that the Departmental representative has not disputed the fact that after taking over vacant possession of the cinema building from the assessee to PVR Ltd. converted it into four screens multiplex with all modern fittings, fixtures and furniture therein. From clause 2.11 of the agreement dated May 18, 2000 (page 69 of the paper book) we clearly observe that the overall risk/control of the management, operation and development of the cinema rests with PVR Ltd. and the assessee is not bearing any kind of risk under the agreement. The Departmental representative has not disputed the point that PVR Ltd. independently obtained the cinema licence, entertainment tax registration etc. in its name and started its business from August 1, 2001. From the orders of the authorities below, we also observe that this fact has not been controverted that the multi plex busin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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