1990 (1) TMI 124 - AT - Income Tax

Summary

Issues:
Assessability of interest income and expenses claimed under different heads for the first year; CIT(A) decision on interest income as income from other sources; CIT(A) decision on appeal for the following year; Appellate Tribunal's consistency in decision-making.

Analysis:
For the first year, the assessing officer found that the assessee, engaged in agricultural activities, had interest income from bank deposits and claimed expenses mainly related to agricultural operations. The officer allowed only 10% of the expenses as admissible for earning interest income. The CIT(A) upheld the assessing officer's decision, stating that interest income should be treated as income from other sources, not related to agricultural activities. The CIT(A) referred to various legal aspects and held that the assessing officer's decision was justified (para 4-5).

In the following year, the assessing officer computed the assessee's income similarly, leading to an appeal by the assessee. The CIT(A) dismissed the appeal based on the reasoning given for the earlier year. The Appellate Tribunal noted that the facts and circumstances for both years were the same, and the CIT(A) should have followed the earlier decision of the Appellate Tribunal. Without any new facts or evidence, the Tribunal could not pass a different order on the same set of facts (para 6-7).

Referring to legal precedents, the Tribunal emphasized the importance of finality in judicial proceedings. It cited cases where the Tribunal was bound by its earlier decisions unless they were shown to be erroneous in law. The Tribunal highlighted that the CIT(A) did not consider all grounds of appeal by the assessee, including the claim that expenses should have been fully deducted against interest income earned while carrying out agricultural activities (para 8-13).

Consequently, the Tribunal set aside the CIT(A) orders for both years and directed a fresh disposal. The CIT(A) was instructed to redecide the issue considering the Appellate Tribunal's earlier decision and all relevant contentions raised by the assessee. The Tribunal also highlighted the need to consider Rule 7 of the Income-tax Rules, 1962, which seemed overlooked by the CIT(A). The CIT(A) was directed to provide both parties with adequate opportunity to be heard (para 13).

In conclusion, the appeals by the assessee were treated as allowed for statistical purposes, and the matter was remanded to the CIT(A) for fresh disposal in accordance with the directions provided by the Tribunal (para 14).