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TMI Blog1991 (12) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfied for the assessment year 1980-81 ? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in holding that the subsidy received from the Government of Andhra Pradesh amounting to Rs. 87,655 is not assessable to tax under section 41(1) of the Income-tax Act, 1961 ? " The facts which are necessary are the following : The assessee-firm had received from the Government of Andhra Pradesh as subsidy an amount of Rs. 87,655 during the accounting year relevant to the assessment year 1980-81. It did not disclose the amount in its taxable income, even though, in the profit and loss account, that amount was credited as subsidy from the Government of Andhra Pradesh and was included in the net prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t so as to bring to tax the amount of Rs. 87,655 which represented refund of sales tax and power subsidy granted to the assessee by the Government of Andhra Pradesh. The assessee filed an appeal before the Income-tax Appellate Tribunal. The Tribunal found that the exercise of the power under section 263 by the Commissioner was not justified, since the Income-tax Officer had not made the assessment erroneously to the prejudice of the Revenue. The Tribunal held that the Income-tax Officer passed the order of assessment in conformity with the ratio of the decision rendered by the Special Bench of the Tribunal, according to the best of his understanding of the law and it could not be held that he decided erroneously in so far as it prejudiced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Officer did not include the amount of subsidy as taxable income in the order of assessment because the assessee had not disclosed that amount as part of its taxable income. Counsel appearing for the assessee, submitted that, if the Incometax Officer followed a decision of the Tribunal on an identical question, it cannot be held that he decided the assessment erroneously and to the prejudice of the interests of the Revenue. According to him, the Incometax Officer was bound to follow the decisions of the Tribunal and he did not err in following the same. Counsel for the assessee placed reliance on the decision of the Calcutta High Court in Russell Properties (P.) Ltd. v. A. Chowdhury [1977] 109 ITR 229 to the effect that if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case. Counsel for the Revenue submitted that even assuming that the Appellate Tribunal had rendered a particular decision in respect of one assessment year, it is open to the Assessing Officer to take a different position for a subsequent year. He referred us to the decision in Minerals and Metals Trading Corporation of India Ltd. V. Deputy Commissioner, Commercial Taxes [1978] 42 STC 372 of this court in support of this submission. We are of the opinion that we need not consider that aspect in the present case because the decision of the Special Bench of the Tribunal on which counsel for the assessee sought to place reliance was not even referred to by the Income-tax Officer. Apart from that, the decision of the Special Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment record, we are of the opinion that the Commissioner of Income-tax was right in holding that the Incometax Officer erred in omitting to bring the amount of Rs. 87,655 to tax and that error operated to the prejudice of the interests of the Revenue. In so far as the Income-tax Officer had not adverted to or followed the decision of the Special Bench of the Appellate Tribunal in Sahney Steel Co.'s case, we need not consider the other submissions of counsel on either side. The decision of the Commissioner that the order of the Assessing Officer was erroneous in so far as it was prejudicial to the interests of the Revenue was fully justified in the facts and circumstances of the case and the Tribunal was wrong in setting aside that order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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