2009 (11) TMI 655 - AT - Income Tax

Summary

Issues Involved:

1. Exemption under section 10(29) of the Income-tax Act, 1961 for storage/warehousing income.
2. Principle of consistency in tax assessments.

Summary:

Issue 1: Exemption under section 10(29) of the Income-tax Act, 1961 for storage/warehousing income

The assessee, a Government of Haryana undertaking, claimed exemption u/s 10(29) of the Income-tax Act, 1961, for storage/warehousing income amounting to Rs. 10,90,82,220 received from the Food Corporation of India (FCI). The Assessing Officer (AO) denied this exemption, treating the amount as a composite trading receipt rather than rental income. The CIT(A) upheld the AO's decision. The Tribunal referred to its earlier decision for the assessment year 1994-95, where a similar claim was allowed, and directed the AO to verify and allow the exemption if the income was indeed from warehousing.

Issue 2: Principle of consistency in tax assessments

The Tribunal emphasized the principle of consistency, noting that similar claims had been allowed for the assessment years 1994-95 to 1998-99. The AO's denial of the exemption in the current year was found unjustified, as no change in facts or law was demonstrated. The Tribunal cited Supreme Court judgments supporting the principle of consistency in recurring or identical claims across different assessment years.

Conclusion:

The Tribunal set aside the CIT(A)'s order and directed the AO to allow the exemption u/s 10(29) for the storage/warehousing income of Rs. 10,90,82,220 received from FCI, thereby allowing the appeal of the assessee.