HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 225 / 2016 Pr. Commissioner of Income Tax,, Ajmer ----Appellant Versus M/s Mahaveer Auto Agencies,, JLN Hospital Road, Bajrangarh Chouraha, Ajmer ----Respondent For Appellant(s) : Mrs. Parinitoo Jain HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS Judgment 20/04/2017 1. By way of this appeal, appellant has challenged judgment and order of Tribunal whereby Tribunal has reversed view taken by CIT (A) and has partly allowed appeal of assessee. 2. Counsel for Department has taken us to order of Tribunal and framed following substantial questions of law: 1. Whether Tribunal was legally justified in reversing findings of CIT(A) and deleting addition made on account of closing stock u/s. 69 when there was difference in stock as per bank statements vis-a-vis return filed? 2. Whether Tribunal was legally justified in deleting addition made on account of closing stock as per bank statement specifically when after set aside, Assessing Officer ascertained position of stock as on 31.03.2006 as per bank statement dated 14.02.2006 and considered statement of partner? 3. Whether Tribunal was legally justified in reversing findings of CIT(A) and deleting addition made on account of interest specifically (2 of 4) [ITA-225/2016] when after set aside, Assessing Officer called for details and evidences in respect of amount given to sister concern and to prove business expediency which assessee failed to produce? 4. Whether Tribunal was legally justified in reversing findings of CIT (A) and deleting addition made on account of bad debts specifically when after set aside, Assessing Officer called for details and evidences in respect of amount taken into consideration in profit and loss account on account of sale made in earlier years and written off which assessee failed to produce? 3. We have gone through order of Tribunal. Tribunal while considering ground No.1 has specifically observed that previous year, view was taken which is contrary to view taken by AO. In our considered opinion, Tribunal rightly relied upon decision of Supreme Court in Radhaswami Satsangh & ors. wherein it has been held as under: Held, reversing decision of High Court, on facts, (i) that property given to Satguru was intended for common purpose of furthering purpose of institution. central council had authority to manage properties of institution and, on revocation of trust, property was not to go back to Satguru, and, at most, in place of trust, central council would exercise authority. Tribunal was justified in holding that properties were subject to legal liability of being used for religious or charitable purposes of Satsang. (ii) That, in absence of any material change justifying Department to take different view from that taken in earlier proceeings, question of exemption of assessee appellant should not have been reopened. Strictly speaking, res judicata does not apply to income-tax proceedings. Though, each assessment year being unit, what was decided in one year might not apply in following year; where fundamental aspect permeating through different assessment years has been found as fact one way or other and parties have allowed that position to be sustained by not challenging order, it would not be at all appropriate to all (3 of 4) [ITA-225/2016] position to be changed in subsequent year. 4. Even on ground of bad debts of earlier years, Tribunal has specifically observed as under: 9.3 We have heard rival contentions and perused material available on record. As per section 36(1)(vii) of Act, amount of bad debt or part thereof which is written off as irrecoverable in accounts of assessee for previous year is required to be deducted while computing income of assessee. Section 36(2) provides as under:- Section 36(2): In making any deduction for bad debt or part thereof, following provisions shall apply- (i) No such deduction shall be allowed unless such debt or part thereof has been taken into account in computing income of assessee of previous year in which amount of such debt or part thereof is written off or of earlier previous year, or represents money lent in ordinary course of business of banking or money-lending which is carried on by assessee; (ii) If amount ultimately recovered on any such debt or part of debt is less than difference between debt or part and amount so deducted, deficiency shall be deductible in previous year in which ultimate recovery is made; (iii) Any such debt or part of debt may be deducted if it has already been written off as irrecoverable in accounts of earlier previous year (being previous year relevant to assessment year commencing on 1st day of April, 1988, or any earlier assessment year), but Assessing Officer had not allowed it to be deducted on ground that it had not been established to have become bad debt in that year; (iv) Where any such debt or part of debt is written off as irrecoverable in accounts of previous year (being previous year relevant to earlier assessment year) and Assessing Officer is satisfied that falling beyond period of four previous years immediately preceding previous year in which such debt or part is written off, provisions of sub-section (6) of section 155 shall apply; (v) Where such debt or part of debt relates to advances made by assessee to which clause (viia) of sub-section (1) applies, no such deduction shall be allowed unless assessee has debited amount of such debt or part of debt in that previous (4 of 4) [ITA-225/2016] year to provision for bad and doubtful debts account made under that clause. We have noticed that in all previous years assessment order has been passed under section 143(3) of IT Act and said debts were mentioned. On perusal of record, it transpired that it is not case of AO that debtors, (as mentioned at pages 61 to 106 of paper book) were not taken into account in computing income of assessee for previous year. 5. In view of above, we are of considered opinion that no substantial question of law arises in this appeal. appeal stands dismissed. (VIJAY KUMAR VYAS),J. (K.S. JHAVERI),J. /bm gandhi 158 Pr. Commissioner of Income-tax, Ajmer v. Mahaveer Auto Agencie