1 of 4 NAFR HIGH COURT OF CHHATTISGARH, BILASPUR TAXC No. 74 of 2019 Assistant Commissioner of Income Tax 3(1), Aaykar Bhawan, Civil Lines, Raipur C.G. Appellant VERSUS Chhattisgarh State Civil Supplies Corporation Ltd., Avani Vihar, Raipur C.G. Respondent For Appellant : Mr. Amit Chaudhari & Ms. Naushina Ali, Advocates Hon'ble Shri P.R. Ramachandra Menon, Chief Justice Hon'ble Shri Parth Prateem Sahu, Judge Judgment on Board Per P.R. Ramachandra Menon, CJ. 13/02/2020 1. Revenue is before this Court. Grievance is against Annexure A-1 order passed by Income Tax Appellate Tribunal, Raipur on 23-10-2018, whereby appeal preferred by Assessee against order dated 30-11-2017 of Commissioner of Income Tax (Appeal)-I, Raipur, in relation to assessment year 2014-15, came to be allowed. 2. assessment was finalized in terms of Section 143(3) of Income Tax Act as per order dated 27-12-2016, by making addition of Rs. 1,94,31,98,824/- to income declared; which came to be challenged by filing appeal before Commissioner of Income Tax (Appeals)-I. merit was considered, but interference was declined and appeal was dismissed as per order dated 30-11-2017. This was taken up by assessee by filing further appeal before Tribunal as aforesaid, which ultimately led to order dated 23-10-2018 (Annexure A-1); which is put to challenge in this appeal; contending that Tribunal has not properly appreciated facts and figures in light of relevant provisions of law and precedents and that there is miscarriage of justice. 2 of 4 3. It is in said context that Revenue has suggested some questions as questions involving substantial questions of law in terms of Section 260A of Income Tax Act, 1961, which are in following terms: 1. Whether on points of law and on facts & circumstances of case, Ld. ITAT was justified in setting aside order of CIT(A) who upheld addition of Rs. 1,94,31,98,824/- made by assessing officer, thereby ignoring assessee's own admittance of change in method of accounting adopted during financial year in hand as was mentioned in From 3CD at point no. 13(b), marked as 'Yes' and also in note 1.4 of change in accounting policy under 1 of Balance Sheet as on 31.03.2014, thereby rendering decision which is perverse? 2. Whether on facts & circumstances of case and on points of law, Ld. ITAT was justified deleting addition of Rs.1,94,31,98,824/- upheld by CIT(A) thereby ignoring ratio of Ld. ITAT Delhi 'D' Bench in case of Luxor Writing Instruments Pvt. Ltd. Vs DCIT, Circle-4(1), Delhi in ITA No. 3816/Del./2011 wherein appeal of assessee was dismissed by holding that income under head profit and gains of business or profession or income from other sources shall be computed according with either cash or mercantile system of accounting regularly employed by assessee and once method has been chosen it should be employed regularly by assessee and assessee may not be permitted to change it in subsequent years? 3. Whether on points of law and on facts & circumstances of case, Ld. ITAT was justified in setting aside decision of CIT(A), thereby giving sweeping general observation that since in subsequent years no contrary view was taken by AO, thence addition of Rs. 1,94,31,98,824/- in financial year in hand cannot be upheld, thereby ignoring fact that each income tax proceeding is separate and distinct and precedent of Res-Judicata is not applicable to Income Tax proceedings, thereby ignoring ratios judgment of Hon'ble Supreme Court in cases of New Jahangir Vakil Mills Co Ltd vs CIT (SC) 49 ITR 137 and Bharat Sanchar Nigam Limited and Anr Vs UOI & Ors (SC) 282 ITR 273? 4. However, on going through order passed by Tribunal, it is evident that meticulous analysis of facts and figures in light of legal provisions and precedents has been done by Tribunal. It would be worthwhile to note that subsequent events, insofar as, assessee is concerned, have also specifically noted in paragraph 21, with regard to changed stand of Revenue in respect of assessment for subsequent years. To avoid 3 of 4 repetition, we find it appropriate to extract paragraphs 20 & 21 of order passed by Tribunal as part of order so as to have clear picture as to course and events: 20. We find Ahmedabad Bench of Tribunal in DCIT vs. Gujarat State Civil Supplies Corporation Ltd. in ITA No. 334/Ahd/2014 & CO No. 186/Ahd/2014, order dated 01.06.2017 has observed as under:- '5. We have heard rival contentions perused material as per record. We have noticed that assessee company was set up by Government of Gujarat under companies Act, 1956. assessee company manage public distribution system and other public welfare scheme on behalf of Government of Gujarat. Government of Gujarat has been providing handling commission as per Government of Gujarat (GR) Government Resolution. We observed that surplus which was earned by assessee for activities carried out on behalf of Government of Gujarat belonged to Government and payable to Government along with interest after deducting of commission earned by assessee. We further observed that commission income earned by assessee on activities carried on behalf of Government and other income from its own activities are taxable in hand of assessee. 5.1 We have further noticed that in earlier assessment year assessing officer has accepted similar accounting practices followed in case of assessee. We considered that surplus earned on behalf of Government for carrying out function of Public Distribution System as agent of Government is not taxable in hand of assessee. 5.2 We have also perused detail facts and findings elaborated in order of Ld.CIT(A) and considered that Ld.CIT(A) is justified in deleting addition made by Assessing Officer by stating that surplus earned from functioning of PDS on behalf of Government cannot be taxed in hand of assessee. In view of above stated facts and findings we uphold order of Ld.CIT(A).' 21. various other decisions relied on by ld. counsel for assessee in paper book also supports its case. submission of ld. counsel for assessee that in subsequent years, since subsidy receipt has been accepted by Revenue, although u/s 143(1), and no action u/s 147 or 263 has been taken could not be controverted by ld. DR. We, therefore, are of considered opinion that concession component received by assessee Government company in course of implementing government projects of PDS as its agent, surplus of which, if any, was refundable or adjustable in future was not income of 4 of 4 assessee. We, therefore, set aside order of CIT(A) and grounds raised by assessee are allowed. 5. After hearing learned standing counsel for appellant/ Revenue, we do not find any reason to take different view, especially in context as discussed by Tribunal in detail. 6. There is no substantial question of law, so as to call for interference of this Court. Appeal fails and it is dismissed accordingly. Sd/- Sd/- (P.R. Ramachandra Menon) (Parth Prateem Sahu) Chief Justice Judge Pawan Assistant Commissioner of Income-tax 3(1), Raipur v. Chhattisgarh State Civil Supplies Corporation Ltd