The main legal point established in the judgment is the importance of material change in fact situation or law for rejecting the view taken for the earlier assessment years.

( 1 ) INCOME-TAX Appellate Tribunal has dismissed the appeal filed by the Revenue, inter alia, holding that in the absence of any material change in the facts, the view taken by the authorities for the earlier assessment years would continue to hold good on the principles of consistency. The Revenue has assailed the correctness of that finding in the present appeal.

( 2 ) THE assessee-company was incorporated on 24th February, 1989 with the object of carrying on business in the development of real estate. It appears to have entered into an agreement in February, 1989 with Edward keventer Pvt. Ltd. and taken over the responsibility of re-development of land owned by the said company. It also entered into an agreement with M/s. Ballarpur industries Ltd. in March, 1989 and with M/ s. Ashoka Builders in June 1989. Pursuant to the said agreements the assessee had received a sum of Rs. 5 crores from M/s. Ballapur industries Ltd. and Rs. 2 crores from M/s. Ashoka Builders, subject to certain conditions, stipulated in the agreements.

( 3 ) THE assessee-company, it is common ground, follows the project completion method of accounting, accepted in the course of the preceding assessments. For the assessment year 1993-94, the Assessing officer called upon the assessee to explain why interest income of Rs. 38,62,419/-, including interest amount of Rs. 37,46,448/-, earned on fixed deposits be not treated as income earned from other sources. In response, the assessee argued that it was following the same principle of accountancy as were adopted in earlier years and the interest income shown by the assessee may be taken as its income from business. The assessing Officer was dissatisfied with that contention as in his view the assessee who was engaged in the business of real estate, could not claim interest earned on funds placed with the banks as business income. Placing reliance upon Commissioner of income-tax Vs. New Central Jute Mills co. Ltd. , 118 ITR 1005, Commissioner of income-tax Vs. Ananda Bazar Patrika pvt. Ltd. , 167 ITR 368 and Collis Line Pvt. Ltd. Vs. Income-tax Officer, 135 ITR 390, the Assessing Officer held that interest income could not be said to be incidental to the real estate business, since it arose out of investment of surplus funds and could be brought to tax as income from other sources. A sum of Rs. 37,46,448/- earned on FDRs was accordingly added to the income of the assessee. Aggrieved by the said addition, the assessee appealed to the CIT (Appeals) before whom it was, inter alia, argued that although income for the previous assessment years 1990-91 to 1992-93 had been treated as income from other sources by the Assessing officer, the Commissioner (Appeals) had, while allowing the appeals, filed by the assessee for all the three years, held that the interest income was directly linked with the assessee s business and had to be treated as business income. Relying upon the order passed for the previous assessment years, the commissioner deleted the addition holding that the interest income earned on the fixed deposit receipts was income earned from business. The Commissioner observed :"i have carefully considered the above submissions. I find that the facts relating to the interest income are not different in this year than in earlier years, in which the plea of the appellant that interest income arose out of its main business of real estate and was subservient to it had been accepted. The DC has not 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 t