INCOME TAX ACT, 1961

Section 143(3)

Assessment - Treatment of Kachha Arahtia as Pacca Arahtia - -

Assessee firm engaged in business of potato and onion in Muhana Sabji Mandi, had shown commission receipts. AO held that assessee was a pacca arahtia not a Kachha Arahtia as assessee had maintained ledger for each and every part with whom it had transactions during the year under consideration, which showed that it had interests like a trader had and, therefore, assessee was obliged to show income from business as trader instead of a commission agent total turnover of the business was Rs. 5 crores during the year under consideration, the assessee was obliged under section 44AB to get its accounts audited.Held: It is true that doctrine of res judicata does not apply to income tax proceedings as each assessment year is independent of the other, but where issue has been decided consistently in a broad manner for earlier assessment years, for the sake of consistency, the same view should continue in subsequent years unless there is material changes in the facts. In the instant case, assessee had been functioning as 'Kachha Arahtia' for last number of years and during this period, modus operandi of the assessee and nature of its business operations as 'Kachha Arahtia' had been examined and stood accepted by the department, accordingly, there was no justifiable basis to depart from the settled position to hold that assessee firm was not a 'Kachha Arahtia' but a 'Pacca Arahtia' and that too in the absence of transaction documents, merely looking at nomeclature of certain ledger accounts.

Followed:Godrej & Boyce Mfg. Co. Ltd. (2017) 394 ITR 449 (SC) : 2017 TaxPub(DT) 968 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2010-11

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