Addl. CIT, Noida v. M/s. Noida Golf Course Society (Regd.), Noida

ITA 152/DEL/2010 | 2005-2006
Pronouncement Date: 19-03-2010 | Result: Dismissed

Appeal Details

RSA Number 15220114 RSA 2010
Bench Delhi
Appeal Number ITA 152/DEL/2010
Duration Of Justice 2 month(s) 7 day(s)
Appellant Addl. CIT, Noida
Respondent M/s. Noida Golf Course Society (Regd.), Noida
Appeal Type Income Tax Appeal
Pronouncement Date 19-03-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted F
Tribunal Order Date 19-03-2010
Date Of Final Hearing 09-03-2010
Next Hearing Date 09-03-2010
Assessment Year 2005-2006
Appeal Filed On 11-01-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F: NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NOS.152 & 153/DEL/2010 ASSESSMENT YEARS : 2005-06 & 2006-07 ADDL. CIT NOIDA RANGE NOIDA 2 ND FLOOR G BLOCK SHOPPING COMPLEX SECTOR 20 NOIDA. VS. NOIDA GOLF COURSE SOCIETY (REGD.) SECTOR 38 NOIDA. GIR NO.610 (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SMT. VANDANA RAMCHANDRAN SR. DR ORDER PER I.P. BANSAL JUDICIAL MEMBER BOTH THESE APPEALS ARE FILED BY THE REVENUE. THEY ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF CIT (A) DATED 13 TH OCTOBER 2009 AND 22 ND OCTOBER 2009 FOR ASSESSMENT YEARS 2005-06 AND 2006-07. GROUNDS OF APPEAL IN RESPECT OF BOTH THE YEARS READ AS UNDER:- ASSESSMENT YEAR : 2005-06 1. WHETHER LD. CIT (A) IS JUSTIFIED IN HOLDING THA T THE INTEREST EARNED ON FDR AND DIVIDEND AMOUNTING TO RS.22 63 42 4/- IS EXEMPT FROM TAX ON THE PRINCIPLE & DOCTRINE OF MUTU ALITY. 2. THAT THE ORDER OF THE LD. CIT (A) DESERVES TO B E SET ASIDE AND THE ORDER OF THE AO BE RESTORED. ASSESSMENT YEAR : 2006-07 1. WHETHER LD. CIT (A) IS JUSTIFIED IN HOLDING THA T THE INTEREST EARNED ON FDR AND DIVIDEND AMOUNTING TO RS.32 84 20 6/- IS ITA NOS.152 & 153/DEL/2010 2 EXEMPT FROM TAX ON THE PRINCIPLE & DOCTRINE OF MUTU ALITY. 2. THAT THE ORDER OF THE LD. CIT (A) DESERVES TO B E SET ASIDE AND THE ORDER OF THE AO BE RESTORED. 2. NOTICE OF HEARING WAS SENT TO THE ASSESSEE HOW EVER ON THE FIXED DATE OF HEARING NONE APPEARED ON BEHALF OF THE ASSESSEE. D URING THE COURSE OF HEARING IT WAS SEEN THAT LD. CIT (A) HAS DECIDED THE ISSUE CONTESTED BY THE REVENUE IN THESE APPEALS BY FOLLOWING THE ORDER OF THE TRIBUNA L IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2004-05. THE RELEVANT PORTION OF O RDER OF THE TRIBUNAL HAS ALSO BEEN REPRODUCED IN THE ORDER OF THE CIT (A) IN PARA 4 OF THE IMPUGNED ORDER AND FOLLOWING THE SAID ORDER HE HAS HELD THAT INTEREST ON FDR AND DIVIDEND AMOUNTING TO RS.22 63 424/- IS EXEMPT FROM TAX ON T HE BASIS OF PRINCIPLE OF MUTUALITY. BEFORE AO ALSO THE RELIANCE WAS PLACED ON THE ORDER OF THE TRIBUNAL DATED 3 RD AUGUST 2007 IN WHICH IT WAS STATED THAT THE TRIBU NAL RIGHT FROM ASSESSMENT YEAR 1993-94 TO 2000-01 HAS BEEN DECIDIN G THIS ISSUE IN FAVOUR OF THE ASSESSEE. THE FIRST OF SUCH ORDER WAS DATED 19 TH JULY 2002 WHICH WAS IN RESPECT OF ASSESSMENT YEAR 1993-94 TO 1997-98 AND T HEN FOR ASSESSMENT YEAR 1998-99 TO 2000-01 VIDE ORDER DATED 16 TH FEBRUARY 2005 AND FOR ASSESSMENT YEAR 2001-02 AND 2002-03 THE ISSUE WAS DECIDED BY T HE AFOREMENTIONED ORDER OF THE TRIBUNAL DATED 3 RD AUGUST 2007. LD. AO AFTER CONSIDERING THESE SUBM ISSIONS HAS OBSERVED THAT THOUGH THE TRIBUNAL HAS DECIDED T HE ISSUE IN FAVOUR OF THE ASSESSEE FOR ASSESSMENT YEARS 1998-99 TO 2000-01 B UT THE DEPARTMENT HAS NOT ACCEPTED THOSE ORDERS AND HAS FILED APPEALS U/S 260 A OF THE INCOME-TAX ACT 1961 IN HONBLE ALLAHABAD HIGH CURT AND IN THIS MA NNER THE AO HAS ASSESSED THE IMPUGNED AMOUNT BEING NOT EXEMPT ON THE BASIS O F PRINCIPLE OF MUTUALITY. LD. CIT (A) REFERRING TO THE AFOREMENTIONED ORDER O F THE TRIBUNAL IN RESPECT OF ASSESSMENT YEAR 2004-05 DATED 17 TH DECEMBER 2008 IN ITA NO.975/DEL/2008 HAS DELETED THE ADDITION AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE US. 3. LD. DR RELIED ON THE ORDER OF AO AND PLEADED THA T THE EARLIER ORDER OF THE TRIBUNAL HAVE NOT BEEN ACCEPTED BY THE REVENUE AS A PPEALS HAVE BEEN FILED ITA NOS.152 & 153/DEL/2010 3 AGAINST THOSE ORDERS THEREFORE THE AO WAS RIGHT I N MAKING THE ADDITION AND CIT (A) HAS WRONGLY DELETED THE SAME. 4. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF LD. DR. WE HAVE ALSO CAREFULLY GONE THROUGH THE ORDER OF THE AO AND CIT (A) AND FOUND THAT THE ISSUE RAISED BY THE REVENUE IS COVERED BY THE AFOREMENTIO NED ORDER OF THE TRIBUNAL WHICH HAS BEEN RELIED UPON BY THE CIT (A) WHILE DEL ETING THE ADDITION. FOR THE SAKE OF COMPLETENESS THE RELEVANT PORTION OF ORDER WHICH HAS BEEN REPRODUCED IN THE ORDER OF THE CIT (A) OF THE TRIBUNAL IN ITA NO. 975/DEL/2008 DATED 17 TH DECEMBER 2008 IS REPRODUCED BELOW:- 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS IN THE LIGHT OF MATERIAL PLACED BEFORE US. FOR THE SAKE OF CONVENIE NCE THE ABOVE MENTIONED ORDER OF THE TRIBUNAL IN THE CASE OF ASSE SSEE FOR A.Y. 03- 04 IS REPRODUCED BELOW IN ITS ENTIRETY. THE ASESSEE HAS FILED THIS APPEAL AGAINST THE ORDE R DATED 26.02.07OF THE CIT(A) GHAZIABAD PASSED IN APPEAL NO.03/06-07/GZB/NOIDA ON AS MANY AS 12 GROUNDS BUT BASICALLY RAISING THE ISSUE WHETHER INT EREST ON FDRS AND DIVIDEND FROM MUTUAL FUND ETC. IS EXEMP T FROM INCOME ON THE BASIS OF PRINCIPLES OF MUTUALITY . 2. BRIEFLY STATED THE FACTS RELATING TO THE ISSUE INVOLVED IN THE GROUNDS OF APPEAL ARE THAT THE NOIDA GOLF COURS E SOCIETY IS A SOCIETY REGISTERED UNDER THE SOCIETY REGISTRATION ACT 1860 ESTABLISHED FOR THE PROMOTIO N OF GOLF IN INDIA. THE AO TREATED THE INTEREST ON FDRS AND DIVIDEND AMOUNTING TO RS.51 66 493/-AS TAXABLE INCO ME IN THE HANDS OF THE ASSESSEE UNDER THE HEAD INCOME FR OM OTHER SOURCES BY REJECTING THE ASSESSEES CLAIM OF EXEMPTION FROM TAX. 3. ON APPEAL THE LD. CIT(A) CONFIRMED THE ORDER OF AO IN WHICH HE TREATED THE SAID AMOUNT AS INCOME FROM OTH ER SOURCES. 4. AT THE OUTSET OF THE APPELLATE PROCEEDINGS LID. AR FOR THE ASSESSEE SUBMITTED THAT AN IDENTICAL ISSUE ON IDENTICAL FACTS AS INVOLVED IN THE INSTANT CASE OF THE ASSESSEE ALSO CAME UP FOR CONSIDERATION BEFORE THE ITA NOS.152 & 153/DEL/2010 4 ITAT DELHI BENCH IN THE CASE OF THIS VERY ASSESSEE IN ITA NOS. 176 & 177/D/06 IN A.Y. 01-02 & 02-03 AND T HE TRIBUNAL VIDE CONSOLIDATED ORDER DATED 3 RD AUGUST 2008 AT PAGE NO.3-4 IN PARA NOS. 4 AND 5 DECIDED THIS IS SUE AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE W HILE OBSERVING AS UNDER: - 4. WE MAY ALSO MENTION HERE THAT RECENTLY HONBLE JURISDICTIONAL HIGH COURT ALSO DECIDED THIS ISSUE ON 11.5.07 IN ITA NO.84/03 IN THE CASE OF COUNTRY CLUB VS. DIRECTOR OF INCOME TAX WHEREIN THEIR LORDSHIPS HAVE OBSERVED AS UNDER: 4.THE ASSESSEE CLUB EARNS INCOME FROM ITS MEMBERS AND THEIR GUESTS. SURPLUS FUNDS ARE DEPOSITED IN BANKS AND THESE SURPLUS FUNDS ARE ATTRIBUTABLE TO AMOUNTS RECEIVED FROM MEMBERS OF THE ASSESSEE CLUB TOWARDS THEIR DUES AND FOR EXPENSES INCURRED BY MEMBERS AND THEIR GUESTS IN RESTAURANTS AND OTHER FACILITIES OF THE CLUB LIKE BILLIARD ROOM TENNIS AND SQUASH COURTS AND SWIMMING POOL ETC. THERE IS NO DISPUTE ABOUT THE FACT THAT ALL THESE FACILITIES ARE AVAILABLE ONLY TO MEMBERS OF THE ASSESSEE CLUB AND THEIR GUESTS. 5. APPLYING THE DOCTRINE OF MUTUALITY THE TRIBUNAL HELD THAT INCOME RECEIVED BY THE ASSESSEE FOR THE USE OF FACILITIES BY GUESTS OF THE MEMBERS IS EXEMPT FROM TAXATION. THIS BEING THE POSITION WE ARE OF THE VIEW THAT DEPOSITS MADE AS A RESULT OF THIS INCOME RECEIVED AND THE INTEREST RECEIVED THEREON FROM THE BANKS CANNOT BE SAID TO BE OUTSIDE THE DOCTRINE OF MUTUALITY. 6. LD. COUNSEL FOR THE ASSESSEE HAS RELIED UPON DIRECTOR OF INCOME-TAX VS. ALL INDIA ORIENTAL BANK OF COMMERCE WELFARE SOCIETY (2003) 130 TAXMAN 575 (DELHI) IN WHICH THIS COURT HAS RELIED UPON IN CHELMSFORD CLUB VS. CIT (2000) 243 ITR 89 (SC) IT WAS HELD FOLLOWING THE DECISION OF THE SC THAT WHERE A NUMBER OF PERSONS COMBINE TO CONTRIBUTE TO A COMMON FUND AND HAVE NO DEALINGS OR RELATIONS WITH ANY OTHER BODY THEN ANY SURPLUS ITA NOS.152 & 153/DEL/2010 5 GENERATED CANNOT IN ANY SENSE BE REGARDED AS PROFITS CHARGEABLE OF TAX. ON THIS BASIS THE DOCTRINE OF MUTUALITY WAS APPLIED TO THE FACTS OF THAT CASE. WE SEE NO DISTINCTION IN THE DECISION RENDERED BY THIS COURT IN ALL INDIA ORIENTAL BANK OF COMMERCE WELFARE SOCIETY AND THE PRESENT CASE. 7. UNDER THE CIRCUMSTANCES WE ANSWER THE QUESTION OF LAW IN THE AFFIRMATIVE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 5. THIS DECISION DURING THE COURSE OF HEARING WAS BROUGHT TO THE NOTICE OF BOTH THE PARTIES. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF MA TERIAL PLACED BEFORE US. NO ONLY THE ISSUE RAISED BY THE ASSESSEE IN THESE APPEALS IS COVERED IN ITS FAVOUR BY THE EARLIER DECISIONS OF THE TRIBUNAL RIGHT FROM ASSTT. YEARS 1993-94 TO 2000-01 BUT ALSO THE ISSUE NOW IS COVERE D BY THE AFOREMENTIONED DECISION OF THE JURISDICTIONAL H IGH COURT. THERE IS NO DISPUTE TO THE EXTENT THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. THE ASSESSEE HAS TAKEN THIS GROUND BEFORE THE AO AS WELL AS CIT(A) B UT THIS GROUND HAS BEEN TURNED DOWN BY THEM ON THE GROUND THAT THE SAID DECISION OF THE TRIBUNAL HAD N OT BEEN ACCEPTED BY THE DEPARTMENT AS THE APPEALS HAVE BEEN FILED AGAINST THOSE ORDERS. IN THIS VIEW OF TH E SITUATION RESPECTFULLY FOLLOWING THE AFOREMENTIONE D ORDERS OF CO-ORDINATE BENCHES IN THE ASSESSEES OWN CASE AS WELL AS THE DECISION OF HONBLE JURISDICTIO NAL HIGH COURT WE ACCEPT THE APPEALS FILED BY THE ASSE SSEE AND HOLD THAT INTEREST AND DIVIDEND INCOME COULD NO T BE ASSESSED AS INCOME FROM OTHER SOURCES AND THE SAME WAS EXEMPT ON THE BASIS OF PRINCIPLE OF MUTUALITY. 6. ON THE OTHER HAND LD. DR FOR THE REVENUE EXCEP T PLACING RELIANCE ON THE REASONING GIVEN IN THE ORDE RS OF THE TAX AUTHORITIES BELOW WAS NOT ABLE TO CONTROVERT THE SUBMISSIONS OF LD. AR FOR THE ASSESSEE. 7. ON EXAMINING THE ORDER (SUPRA) PASSED BY THE TRIBUNAL AND THE FACTS OF THE INSTANT CASE OF THE ASSESSEE WE FIND THAT THE FACTS AND ISSUES INVOLVE D IN THE INSTANT CASE OF THE ASSESSEE AND THE CASE (SUPR A) DECIDED BY THE TRIBUNAL ARE QUITE IDENTICAL AND SO IN ORDER TO MAINTAIN THE JUDICIAL DISCIPLINE AND CONSI STENCY ITA NOS.152 & 153/DEL/2010 6 IN THE APPROACH OF THE BENCH THE JUDICIAL PROPRIET ARY DEMANDS THAT WE SHOULD RESPECT AND FOLLOW THE ORDER S OF COORDINATE BENCHES DECIDING THE IDENTICAL ISSUES ON IDENTICAL FACTS WHICH SUBSEQUENTLY COME UP FOR CONSIDERATION BEFORE THE OTHER BENCHES OF THE TRIBU NAL IN OTHER CASES. 8. IN THIS VIEW OF THE MATTER AND RESPECTFULLY FOLL OWING THE DECISION (SUPRA) OF THE TRIBUNAL IN ASSTT. YRS. 01- 02 AND 02-03 ISSUE INVOLVED IN GROUND OF THE APPEAL OF THE ASSESSEE IS DECIDED AGAINST THE REVENUE AND IN FAVO UR OF THE ASSESSEE AND CONSEQUENT UPON THE SAME THE ORDER OF THE ID. CIT(A) IN THIS REGARD IS SET-ASIDE AND G ROUND OF APPEAL TAKEN BY THE ASSESSEE IS ALLOWED. 9. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 6. AS CIT (A) IS RELYING ONLY ON THE ORDER OF CIT ( A) FOR A.Y.03- 04 AND THAT ORDER OF CIT (A) HAS BEEN REVERSED RES PECTFULLY FOLLOWING THE AFOREMENTIONED ORDER OF THE TRIBUNAL WE ALLOW THE APPEAL OF THE ASSESSEE IN TERMS OF ABOVE-MENTIONED ORDER OF THE TRIBUNAL. 5. IN THIS VIEW OF THE SITUATION WE DECLINE TO INT ERFERE WITH THE ORDER OF THE CIT (A) AND THE APPEALS FILED BY THE REVENUE FOR BOTH THE YEARS ARE DISMISSED. 6. IN THE RESULT THE APPEALS FILED BY THE DEPARTME NT ARE DISMISSED. . THE ORDER PRONOUNCED IN THE OPEN COURT ON 19.03.20 10. SD/- SD/- [R.C. SHARMA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 19.03.2010. DK ITA NOS.152 & 153/DEL/2010 7 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES