A.C.I.T. vs. EMTICI ENGINEERING LTD.

Facts

The assessee, Emtici Engineering Ltd., filed its return of income for Assessment Year 1988-89 on June 29, 1988, declaring a total income of Rs. 48,79,410. Revised returns were subsequently filed. The Assessing Officer (AO) passed an order under Section 143(3) on March 27, 1991. The Commissioner of Income Tax (Appeals) [CIT(A)] partly allowed the assessee's appeal on March 27, 1992. The Income Tax Appellate Tribunal (ITAT) also partly allowed the appeals filed by both the assessee and the Revenue on October 30, 2001. The Revenue preferred the present appeals before the High Court against the ITAT's order. The High Court admitted the appeal on April 1, 2002, formulating a substantial question of law.

Held

The High Court held that the issue involved in the present appeals was already concluded by its previous decision in Tax Appeal No. 255/2000, decided on November 17, 2014. In that prior case, the High Court noted that the CIT(A) had decided the issue in favour of the assessee by relying on orders passed in earlier years, which had become final. The ITAT had concurred with this view. The Revenue had also unsuccessfully sought a reference application before the ITAT on a similar issue for AY 1984-85. Consequently, the High Court found no illegality with the judgment rendered by the ITAT and concurred with its view. The appeals were therefore dismissed, upholding the ITAT's decision to grant the benefit of earlier years' final orders to the assessee.

Key Issues

1. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal has substantially erred in law in confirming the order of the CIT(A) directing the Assessing Officer to allow depreciation of Rs. 1,41,840 as admissible on the factory building known as Trupti Casting and to assess the income received from the said building as income from other sources? Assessee's Contention: The judgment does not record any specific contentions made by the assessee. The High Court's decision relies on a previous judgment of the same court in Tax Appeal No. 255/2000. The reasoning in that prior judgment indicates that the issue was decided in favour of the assessee by the CIT(A) and concurred with by the ITAT, based on earlier years' orders which had become final. The Revenue had unsuccessfully sought a reference on a similar issue for AY 1984-85, which was rejected by the ITAT. Revenue's Contention: The Revenue's contention is implicit in the substantial question of law framed, challenging the ITAT's confirmation of the CIT(A)'s order allowing depreciation and assessing rental income as income from other sources.