The DCIT, Circle-4,, Ahmedabad v. Karnavati Club Ltd.,, Ahmedabad

ITA 2384/AHD/2013 | 2010-2011
Pronouncement Date: 18-10-2016 | Result: Dismissed

Appeal Details

RSA Number 238420514 RSA 2013
Assessee PAN AAACK7865Q
Bench Ahmedabad
Appeal Number ITA 2384/AHD/2013
Duration Of Justice 3 year(s) 14 day(s)
Appellant The DCIT, Circle-4,, Ahmedabad
Respondent Karnavati Club Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 18-10-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 18-10-2016
Date Of Final Hearing 13-10-2016
Next Hearing Date 13-10-2016
Assessment Year 2010-2011
Appeal Filed On 04-10-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH (BEFORE SHRI N.K. BILLAIYA ACCOUNTANT MEMBER & SHRI S. S. GODARA JUDICIAL MEMBER) ITA. NO: 2384/AHD/2013 (ASSESSMENT YEAR: 2010-11) THE DCIT CIRCLE-4 AHMEDABAD V/S KARNAVATI CLUB LTD. SARKHEJ GANDHINAGAR HIGHWAY AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAACK7865Q APPELLANT BY : SHRI R. N. PARBAT CIT/DR RESPONDENT BY : SHRI SUNIL TALATI A.R. ( )/ ORDER DATE OF HEARING : 13 -10-201 6 DATE OF PRONOUNCEMENT : 18 -10-2016 PER N.K. BILLAIYA ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-VIII AHMEDABAD DATED 22.07.2013 PERTAINING TO A.Y. 2010- 11. ITA NO. 2384 /AHD/2013 . A.Y. 2010-1 1 2 2. THE SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD. C IT(A) ERRED IN DELETING THE DISALLOWANCE OF RS. 15 76 21 000/- MADE BY THE A.O. ON ACCOUNT OF ENTRANCE FEES TREATING THE SAME AS REVENUE RECEIPT. 3. WHILE SCRUTINIZING THE RETURN OF INCOME THE A.O. N OTICED FROM THE ANNUAL REPORT THAT THE ASSESSEE HAS RECEIVED ENTRANCE FEES OF RS. 15 76 21 000/- WHICH HAS BEEN TREATED AS CAPITAL RECEIPT AND NOT O FFERED AS INCOME. THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE ENTR ANCE FEES RECEIVED SHOULD NOT BE TREATED AS REVENUE RECEIPT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 4. ASSESSEE FILED A DETAILED REPLY CLAIMING THE ENTRAN CE FEES AS A CAPITAL RECEIPT. THE DETAILED REPLY OF THE ASSESSEE DID NOT FIND ANY FAVOUR WITH THE A.O. WHO PROCEEDED BY TREATING THE ENTRANCE FEES AS REVENUE RECEIPT. 5. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) A ND REITERATED ITS CLAIM. IT WAS BROUGHT TO THE NOTICE OF THE LD. CIT(A) THAT TH E TRIBUNAL IN ASSESSEES OWN CASE HAS DECIDED THE ISSUE IN FAVOUR OF THE ASS ESSEE AND AGAINST THE REVENUE. THE LD. CIT(A) WAS CONVINCED AND HELD THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE AND ACCORDINGLY DIRECTED THE A.O. TO DELETE THE ADDITION. 6. AGGRIEVED BY THIS THE REVENUE IS BEFORE US. AT THE VERY OUTSET THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE ISSUE IS N OW SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF THE HONB LE JURISDICTIONAL HIGH ITA NO. 2384 /AHD/2013 . A.Y. 2010-1 1 3 COURT IN ASSESSEES OWN CASE QUA TAX APPEAL NO. 839 OF 2007. THE LD. D.R. WAS NOT IN A POSITION TO POINT OUT ANY DISTINGUISHI NG FEATURE WHICH MAY WARRANT A DIFFERENT VIEW. 7. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORI TIES BELOW. WE FIND FORCE IN THE CONTENTION OF THE LD. COUNSEL; THE ISS UE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. 8. THE HONBLE JURISDICTIONAL HIGH COURT WAS SEIZED WI TH THE FOLLOWING SUBSTANTIAL QUESTION OF LAW. WHETHER THE APPELLATE TRIBUNAL IS RIGHT IN LAW AND ON FACTS IN CONFIRMING THE ORDER PASSED BY THE CIT(A) DELETING THE ADDITION OF RS. 40 02 500/- BEING ENTRANCE FEES RECEIVED FROM THE NEW MEMBERS FOR LIF E MEMBERSHIP? 9. THE HONBLE HIGH COURT CONSIDERED THE FOLLOWING FAC TS AND DECIDED ACCORDINGLY AND THE SAME READS AS UNDER:- 3. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE IS A LIMITED COMPANY RUNNING A CLUB FOR ITS MEMBERS IN THIS CASE THE ASSESSMENT WAS COMPLETED VIDE ORDER PASSED U/S. 143(3) OF THE INCOME-TAX ACT 1961 DATE D 26.03.2001 DETERMINING THE TOTAL INCOME AT RS. 14 29 220/- AFTER MAKING CERTA IN ADDITIONS / DISALLOWANCES AS AGAINST THE RETURN OF INCOME OF R S . NIL. BEING AGGRIEVED BY THE SAID ORDER THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) WHICH CAME TO BE ALLOWED VIDE ORDER DATED 16.04.2002. AGAINST THE SAID ORDER THE DEPARTMENT PREFERRED APPEAL BEING ITA NO.2337/AHD/2002 BEFORE THE INCOME TAX APPELLATE TR IBUNAL. THE SAID APPEAL WAS DISMISSED BY THE TRIBUNAL VIDE ORDER DAT ED 10.10.2006. HENCE THESE TAX APPEALS. 4. AT THE OUTSET MR. S.N. SOPARKAR LEARNED SENIOR ADVOCATE SUBMITTED THAT THE CONTROVERSY RAISED IN THESE APPEALS STANDS SETTLED BY A JUDGMENT OF THIS COURT IN ITA NO. 2384 /AHD/2013 . A.Y. 2010-1 1 4 THE CASE OF JUNAGADH GYMKHANA V. INCOME-TAX OFFICER [2015] 56 TAXMANN.COM 281 (GUJARAT) WHEREIN IT HAS BEEN HELD THAT PRINCI PLE OF MUTUALITY WOULD APPLY TO A TRANSACTION BETWEEN A MEMBER AND THE CLUB AND THE REFORE 'GUEST CHARGE' RECEIVED BY CLUB FROM ITS MEMBERS WOULD NOT BE LIAB LE TO TAX. 5. LEARNED SENIOR STANDING COUNSEL FOR THE REVENUE WAS NOT IN A POSITION TO POINT OUT ANY DISTINGUISHING FEATURE WHICH MAY WARRANT A DIFFERENT VIEW. 6. IN VIEW OF THE ABOVE AND FOR THE REASONS GIVEN I N THE AFORE-MENTIONED JUDGMENT THE QUESTION RAISED IN THESE TAX APPEALS ARE ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE APPEALS STAND DISPOSED OF ACCORDINGLY. 10. RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT (SUPRA) WE DECLINE TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). APPEAL FILED BY THE REVENUE IS ACCORDINGLY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 18 - 10- 2016. SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR. ITAT AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT AHME DABAD