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TMI Blog1989 (7) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, the IT Officer (for short ITO) completed the assessment on the basis of books of account and computed the income at Rs. 9,52,369 disallowing certain expenses and making some additions against Rs. 1,45,440 had the assessment been made in the earlier manner i.e. 10 per cent of the net receipt as adopted by the Tribunal in the earlier assessment year (subject to interest on depreciation). 2. The assessee objected to such deviation in the mode of assessment before the CIT(A), apart from objecting disallowance and additions made. It was argued that when the assessee is maintaining same type of books of account, as in earlier years, there is no reason to deviate from the mode of assessment without any valid reason. 3. The learned CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amined is whether in an impugned assessment year, the ITO's action was within the law. He opined that in this case, the ITO has not exceeded his jurisdiction by accepting the profit and loss account and computing the income after taking into consideration which expenses can be allowed under the law. 5. We are sure that the learned D.R. is right in this respect. The Hon'ble High Court of Andhra Pradesh in Muppana Somaraju and Veeraraju vs. CIT., A.P. (1964) 51 ITR 131 (AP) held that an assessment is final and conclusive between the parties only in relation to the assessment for the particular year for which it is made and though a decision reached in one year would be a cogent factor to the determnation of a similar point in the following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st like the position of any two parties who have proceeded on a certain basis in their relations. It may be open to one party to reopen the matter. But if he wants to do so, there should be facts, which would entitle him to do it. If fresh facts come to light, which on an investigation would entitle the ITO to come to a different conclusion from that of his predecessor, we think he is entitled to reopen the question. But if there are no fresh facts, it is difficult to see how he can arbitrarily go behind the finding of his predecessor. The same principles of natural justice or judicial dealing which Courts impose upon ITOs would prevent them capriciously setting aside the orders of their predecessors based on enquiry." The Hon'ble Bombay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e could have got under the IT Act, then the Court may take the view that departing from the earlier decision leads to injustice or denial of justice and the Court may prevent an Income-tax Authority from doing something which would be unjust and inequitable." 7. Now in the light of the above decisions, we will test the case before us. For the asst. yr. 1978-79, 1979-80, 1980-81 and 1981-82, the assessee filed returns on the basis of books of accounts kept by it. Assessments were completed on a flat rate basis with respective observations. In the asst. yr. 1978-79, the ITO observed as follows: "the books of accounts produced have been examined..... The assessee was asked to produce the receipts and vouchers for the huge items of expens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal are in same manner or not, we feel trading and profit loss accounts are the best available guide on which we can rely. We do not find any difference in the manner in which they have been kept in any of the assessment years inclusive of the assessment year under appeal. Moreover, it is strange that though the assessee is a big contractor, and as we were told at the time of hearing that executions of many of the contracts were spread over in these years, no work in progress or closing stock has been recorded in the trading accounts. We fail to appreciate, in view of the circumstances, how it was possible for the ITO to presume that the true profit can be computed on the basis of books of account. 9. We have perused the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arges, hire charges etc., will not be given as a deduction while arriving at the net bill. It is further brought to your notice that depreciation claim made in the P L account of Rs. 87,208 will not be allowed as a deduction from the estimated income. You are, therefore, requested to file your objections, if any, on or before 22nd Feb., 1985 positively, failing which it will be presumed that you have no objection to the proposed estimate." Again, there is no whisper in his order as to what were the defects in the earlier years which were not present in the relevant assessment year. He failed to prove this finding. 9.1 In view of the above matter, we are not able to accept the reasoning of the ITO to change the mode of assessment. We are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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