The Dcit Circle 4 Ahmedabad v. Gujarat Gas Financial Services Ltd Ahmedabad

Ita No 2623 Ahd 20 1 5 A Y 20 1 2 13 Page 1 Of 3 In The Income Tax Appellate Tribunal Ahmedabad B Bench Ahmedabad Before Shri Rajpal Yadav Judicial Member And Shri N K Billaiya Accountant Member I Ta No 2623 Ahd 201 5 Assessment Year 20 1 2 13 Dy Commissioner Of Income Tax Vs Gujarat Gas F Inancial Services Ltd Gandhinagar Circle 2 Shantisadan Society Gandhinagar Near Parimal Garden Ellisbridge Ahm E Dabad Pan A A Acg 5584 E Appellant Respondent Appellant By Shri O P Pathak Joint Cit Respondent By Shri S N Soparkar With Parin Shah Date Of Hearing 2 7 11 20 17 Date Of Pronouncement 18 12 2017 O R D E R Per N K Billaiya A Ccountant Member This Appeal By The Revenue Is Preferred Against The O R Der Of Ci T A 2 Ahmedabad Dated 30 06 2015 Pertaining To Assessment Year 20 12 13 2 The Only Grievance Of The Revenue Is That The Cit A Erred In Deleting The Addition Of Rs 32 86 103 Made By The Assessing Officer On Account Of Disallowance Under Section 40 A 2 A Re A D With Section 40 A 2 B Of The Income Tax Act 1961 The Act Hereinafter In Respect Of The Service Charges Paid To Gujarat Gas Company Limited 3 At T H E Very Outset The Learned Counsel For The Assessee Stated T H At The Issu E Is Now Well Settled In Favour Of The Assessee And Against The R Evenue By The Order Of The Hon Ble High Court Of Gujarat In Assessee S Own Case In T A X Appal No 428 Of 2015 4 Learned Departmental Representative Fairly Conceded To This 5 W E Have Carefully Consider E D The Or D E Rs Of The Authorities Below Quashing The Issue We Find That The Hon Ble Jurisdictional High Court Of Gujarat In Assess E E S Own Ita No 2623 Ahd 20 1 5 A Y 20 1 2 13 Page 2 Of 3 Case In Tax Appe A L No 428 Of 2015 Was Seized With The Following Substantial Qu Estion Of Law Whether The Appellate Tribunal Has Substantially Err E D In Law In Deleting The Addition Of Rs 7 70 Crores Made On Account Of Disallowance U S 40 A 2 B R W S 40 A 2 A Of The Act Without Properly Appreciating The Facts Of The Case And The Material Brought On Record 6 The Relevant Finding Of Hon Ble High Court Read S As Under 10 We Have Heard Learned Advocate S Appearing For The Parties 11 It Would Thus Be Clear From The Above Observations Of The Hon Ble Supreme Court That The Principle Of Res Judicata Does Not Apply To Income Tax Proceedings And Each Assessment Yea R Is Considered As A Separate Unit Still However The Hon Ble Supreme Court Has Held That In Absence Of Any Material Or Substantial Change Justifying The Revenue To Take A Different View Than The View It Had Taken In The Preceding Assessment Yea R S It Should Not Have Reope Ned The Issue In The Subsequent Assessment Year In The Case On Hand Also There Cannot Be Any Avil That Strictly Speaking The Principle Of Res Judicata Is Applicable To Income Ta X Proceedings Still However The Revenue Had Allowed Deduction Of Service Charges From The Income To Assess The Income Tax Of Th E Respondent In The Preceding Year In Absence Of Any Material Change It Could Not Have Disallowed The Claim Of Service Charges Under Sect Ion 40 A Of The Act In The Backdrop Of These Facts The Arguments Canvassed By Learned Senior Counsel Mr M R Bhatt Cannot Be Countenanced 14 We Are In Agreement With The Observations Made By The Tribunal As W Ell As The Ratio Laid Down By The Coo Rdinate Bench Of This Court In The Case Of 1 Commissioner Of Income Tax I Vs Enviro Control Associated P Ltd As Reported At 2014 43 Taxmann Com 291 Gujar A T 2 Commissioner Of Income Tax Iii Vs Ashok J Patel As Reported At 2014 43 Taxmann C Om 227 Gujarat And 3 Commissioner Of Income Tax Vs Indo Saudi Services Travel P Ltd As Reported As 2009 310 Itr 306 Bom 15 It Is Pertinent To Note That So Far A S The Circular Dated 6 7 1968 Is Concerned It Makes Clear That The Provisions Un Der Section 40 A 2 And Particularly With Regard To The Transaction Between The Relatives And Associates Is Concerned The Same Shall Be Treated As Bona Fide Case Unless The Officer Finds It That One Of Them Is Trying To Evade Payment Of Tax 16 Considerin G The Overall Facts Of The Case And The Ratio Laid Down By The Hon Ble Apex Court We Are Of The Opinion That The Appeals Are Meritless And The Same Deserve To Be Dismiss Ed And Accordingly Dismissed Ita No 2623 Ahd 20 1 5 A Y 20 1 2 13 Page 3 Of 3 7 Respectfully Following The Judgement Of The Hon Ble Jurisdictional High Court Of Gujarat Supra We Do Not Find Any Error Or Infirmity In The Findings Of The Cit A Appeal Filed By The Revenue Is Accordingly Dismissed 8 In The Result Appeal Is Dismissed Or Der Pronounced In The Open Court On This 18 Th Day Of December 2017 Sd Sd Rajpal Yadav N K Billaiya Judicial Member Accountant Member Ahmedabad The 18 Th Day Of December 201 7 Pbn Copies To 1 The Appellant 2 The Respondent 3 Cit 4 Cit A 5 Departmental Representative 6 Guard File By Order E Copy Assistant Registrar Income Tax Appellate Tribunal Ahmedabad Benches Ahmedabad