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TMI Blog2006 (1) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... to each case - appeal fails and is hereby dismissed X X X X Extracts X X X X X X X X Extracts X X X X ..... given materials to warrant a departure in this year from the above accepted position. The foregoing discussion would show that the funds had been received by the appellant from its co-developers for its business activity and the interest. Out of the total interest of Rs. 37,46,448, Rs. 5,26,439 was received from SILT as per agreement entered into with the above co-developers and was thus directly linked to its real estate business; the interest of Rs. 15,18,199 accruing on fixed deposits represented the margin money for bank guarantee. It is noted that the fixed deposits representing margin money for bank guarantee was, i.e., the interest of Rs. 15,18,199 was also directly linked with the business of real estate. Similarly, interest of Rs. 16,39,818 had been earned on fixed deposits of less than one year and was intended for payment to L&DO. Keeping in view the abovementioned facts which are identical to those in earlier years in which I have held that the interest income of the appellant is assessable as business income and also following the decision of the Madras High Court in the case of CIT v. Tamil Nadu Dairy Development Corporation Ltd. reported in [1995] 216 ITR 535 the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 199 had accrued on the fixed deposits, representing the margin money provided by the assessee for the issue of bank guarantee. The Commissioner observed that the said amount was also directly linked with the real estate business of the assessee. Similarly, the interest amount of Rs. 16,39,818 had been earned by the assessee on fixed deposit receipts of less than a year as the amount so invested was needed for payment to the L&DO in connection with the change of land use. The Commissioner has, on the above findings, observed that the facts relevant to the year under consideration were identical to those of the earlier years on the basis whereof interest income accruing during the said years was held to be business income of the assessee. The Commissioner has further held that since the source of all the funds on which interest has been earned is attributable to the real estate business and the interest income earned is directly linked with the said business, the amount earned towards interest in the year under consideration was, like the amount earned earlier, business income of the assessee. In fairness to Mr. Jolly, we must record that there was no attempt by him to assail the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity." Following the above decisions, this court has in A.R.J. Security Printers' case [2003] 264 ITR 276 and CIT v. Neo Poly Pack P. Ltd. [2000] 245 ITR 492 (Delhi), held that even when the doctrine of res judicata does not apply to income-tax proceedings, where an issue has been decided consistently in a particular manner for earlier assessment years, the same view should prevail even during the subsequent years unless there is a material change in the facts. The law is therefore fairly well settled. For rejecting the view taken for the earlier assessment years, there must be a material change in the fact situation. There is no gainsaying that the previous view will have no application even in cases where the law itself has undergone a change but before an earlier view can be upset or digressed from, one of the two must be demonstrated, namely, a change in the fact situation or a material change in law whether enacted or declared by the Supreme Court. The Commissioner and the Tribunal have in the inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the present case. The question, however, is whether the income from investment made in fixed deposits was in the instant case an income that was related to the business of the company which, as seen above, was incorporated to do business in development of real estate. For the assessment years 1990-91 to 1992-93 and even for the assessment year under consideration such income was held to be business income upon proper appreciation of the circumstances in which the amounts invested in term deposits were received by the assessee from the co-developers. In the light of the said finding, it is not open to the Revenue to argue that the amounts received were surplus funds invested in term deposits in anticipation of the commencement of the business. Whether or not the business of an assessee has started would depend upon the facts and circumstances of each case as much as the nature of the business that the assessee is carrying on or proposes to do. Suffice it to say that the decision of the Supreme Court in Tuticorin's case [1997] 227 ITR 172 does not affect the legal basis on which the income of the assessee for the previous years was held to be its business income. The ratio deciden ..... X X X X Extracts X X X X X X X X Extracts X X X X
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