The DCIT, Circle-5,, Ahmedabad v. Rajpath Club Ltd.,, Ahmedabad

ITA 2772/AHD/2010 | 2007-2008
Pronouncement Date: 13-01-2011 | Result: Dismissed

Appeal Details

RSA Number 277220514 RSA 2010
Assessee PAN AAACR7379A
Bench Ahmedabad
Appeal Number ITA 2772/AHD/2010
Duration Of Justice 3 month(s) 14 day(s)
Appellant The DCIT, Circle-5,, Ahmedabad
Respondent Rajpath Club Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 13-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 13-01-2011
Date Of Final Hearing 07-01-2011
Next Hearing Date 07-01-2011
Assessment Year 2007-2008
Appeal Filed On 29-09-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' BEFORE SHRI MUKUL SHRAWAT JM & SHRI A N PAHUJA AM ITA NO.2772/AHD/2010 (ASSESSMENT YEAR:-2007-08) DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE-5 AHMEDABAD V/S RAJPATH CLUB LIMITED S G HIGHWAY THALTEJ AHMEDABAD PAN: AAACR 7379 A [APPELLANT] [RESPONDENT] REVENUE BY :- SHRI RAJDEEP SINGH DR ASSESSEE BY:- SHRI VIJAY RANJAN AR O R D E R A N PAHUJA: THIS APPEAL BY THE REVENUE AGAINST AN ORDER DATED 02- 07-2010 OF THE LD. CIT(APPEALS)-XI AHMEDABAD RAIS ES THE FOLLOWING GROUNDS:- 1 THE LD. COMMISSIONER OF INCOME-TAX (A) HAS ERRED I N LAW AND ON FACTS IN CANCELING THE ADDITION OF RS.30 88 752/- M ADE ON ACCOUNT OF RECEIPTS FROM BOOKING OF AC HALL AND LAWN. 2 ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L D. COMMISSIONER OF INCOME-TAX (A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO. 3 IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (A) MAY BE SET-ASIDE AND THAT OF THE AO BE RESTORED. 2 FACTS IN BRIEF AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING INCOME OF RS.53 82 200/- FILED ON 31-10-2007 BY TH E ASSESSEE CLUB AFTER BEING PROCESSED U/S 143(1) OF THE INCOME-TAX ACT 1961 [HEREINAFTER REFERRED TO AS THE ACT] WAS SELECTE D FOR SCRUTINY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE ACT ON 29 -09-2008.DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER[AO IN SHORT] FOUND THAT THE RECEIPTS OF RS.30 88 752/- IN CLUDED IN THE TOTAL RECEIPTS OF RS.1 25 02 618/- FOR LAWN BOOKING AND MARRIAGE HALL BOOKING RELATED TO THE USE OF FACILITIES BY THE NON-MEMBERS I.E. THE MEMBERS GUESTS. ACCORDINGLY THE AO DENIED THE CLAIM FOR EXEMPTION OF THESE RECEIPTS ON THE GROUND THAT T HE RECEIPTS FROM NON- ITA N O.2772/AHD/2010 2 MEMBERS CAN NOT BE TREATED AS INCOME NOT LIABLE TO TAX IN VIEW OF MUTUALITY RELYING INTER ALIA ON THE DECISION IN THE CASE O F CIT VS. TRIVANDRUM CLUB 282 ITR 505(KERALA) . THEREFORE THE AFORESAID RECEIPTS WE RE BROUGHT TO TAX. 3. ON APPEAL THE LD. CIT(A) FOLLOWING THE DECIS ION DATED 28-01- 2008 OF THE ITAT IN THE ASSESSEES OWN CASE FOR T HE AY 2004-05 IN ITA NO.3338/AHD/2007 AND HIS OWN DECISION DATED 1 5-01-2010 IN APPEAL NO. CIT(A)-XI/586/08-09 FOR THE AY 2006-07 DELETED T HE ADDITION . 4 THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST TH E AFORESAID FINDINGS OF THE LEARNED CIT(A). THE LEARNED DR SUPP ORTED THE ORDER OF THE AO WHILE THE LD. AR ON BEHALF OF THE ASSESSE E RELIED UPON DECISION DATED 23.1.2009 OF THE ITAT AHMEDABAD BENC H-C IN THE ASSESSEES OWN CASE FOR THE AY 2005-06 IN ITA NO.3 780/AHD/2008 UPHOLDING THE ORDER OF THE LD. CIT(A) DELETING A SIMILAR ADDITION. 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE AS ALSO DECISION RELIED UPON ON BEHALF OF THE ASSESSEE. WE FIND THAT WHILE ADJUDICATING A SIMILAR ISSUE IN TH E ASSESSEES OWN CASE FOR THE AY 2005-06 THE ITAT IN THEIR DECISI ON DATED 23-01- 2009 IN ITA NO.3780/AHD/2008 WHILE RELYING UPON THE IR EARLIER DECISION DATED 28-01-2008 IN ITA NO.3338/AHD/2007 F OR THE AY 2004-05 CONCLUDED AS UNDER:- 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ORDE RS OF THE AUTHORITIES BELOW AND ALSO THE MATERIAL PLACED ON R ECORD. AT THE OUTSET THE LEARNED AR OF THE ASSESSEE SUBMITTED BEFORE US THAT IN THE AYS 2003-04 SIMILAR ADDITION HAD BEEN MADE BY THE ASSESSING OFF ICER BUT ON APPEAL THE CIT(A) DELETED THE SAME. AGGRIEVED REVENUE FIL ED APPEAL BEFORE THE TRIBUNAL AND THE ITAT D-BENCH AHMEDABAD VIDE ORDE R DATED 23-2-2007 IN ITA NO.2830/AHD/2006 UPHELD THE ORDER OF THE CIT (A) AND DISMISSED THE APPEAL OF THE REVENUE. FOLLOWING THIS DECISION THE ITAT BENCH-D AHMEDABAD IN ITA NO.3338/AHD/2007 DATED 28-1-2008 H AS DISMISSED THE APPEAL OF THE REVENUE FOR THE ASSESSMENT YEAR 2004- 05 UPHOLDING THE ORDER OF THE CIT(A) DELETING SIMILAR ADDITION. THE RELEVANT PORTION OF THE ORDER; DATED 28-1-2008 IN ITA NO.3338-/AHD/2007 IN ASSESSEE'S OWN CASE IS REPRODUCED AS UNDER: ITA N O.2772/AHD/2010 3 '3. LEARNED COUNSEL FOR THE ASSESSEE WHILE RELYING ON THE ORDER OF CIT(A) CONTENDS THAT ITAT IN ASSESSSEE'S O WN CASE FOR A.Y.2003-04 IN ITA NO.2830/AHD/2006 DATED 23-2-20 07 ALLOWED SIMILAR CLAIM OF THE ASSESSEE BY FOLLOWING OBSERVATIONS: '6. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF TH E PARTIES. THE ADMITTED FACTS OF THE CASE ARE THAT THE AC HALL AN D LAWN INCLUDING 'OTHER FACILITIES WERE PROVIDED ONLY TO THE MEMBERS. NON-M EMBERS CANNOT HIRE THE CLUB PREMISES ON THEIR OWN EXCEPT THROUGH THE M EMBERS. IN FACT ALL THE ACCOUNTING ENTRIES AND COLLECTION IS IN THE NAM E OF THE MEMBERS. THE APEX COURT HELD THAT TO ESTABLISH THE DOCTRINE OF M UTUALITY THE FOLLOWING THREE CONDITIONS SHOULD EXIST: 1. THE IDENTITY OF THE CONTRIBUTORS TO THE FUND AND THE RECEIPTS FROM THE FUND. 2. THE TREATMENT OF THE COMPANY THOUGH INCORPORATED AS A MERE ENTITY FOR THE CONVENIENCE OF THE MEMBERS. 3. THE IMPOSSIBILITY THAT CONTRIBUTORS SHOULD DERIV E PROFITS FROM CONTRIBUTIONS MADE BY THEMSELVES TO FUND WHICH COUL D ONLY BE EXPENDED AND RETURNED TO THEMSELVES. IT IS NOT THE CASE OF THE REVENUE THAT 'ANY OF THE ABOVE CONDITION IS NOT EXIST IN THIS CASE UNDER CONSIDERATION. THE CASE OF THE REVENUE ONLY IS THAT THE AO HALL AND LAWN WAS GIVEN TO RELATIVES AN D GUESTS OF THE MEMBERS. THE APEX COURT IN THE CASE OF CHELARAM FOO D CLUB VS. CIT HELD THAT THE DOCTRINE OF MUTUALITY IS APPLICABLE EVEN T O MEMBERS AND THEIR GUESTS. SINCE IN THE CASE UNDER CONSIDERATION] THE FACILITIES OF AC HALL AND LAWN WAS PROVIDED TO THE GUESTS OF THE MEMBERS ON A CCOUNT OF THE MEMBER HIMSELF THUS IT CANNOT BE SAID THAT THE FAC ILITIES WERE PROVIDED TO NON-MEMBERS IF OTHER CONDITIONS ARE SATISFIED. WK FIND THAT THE ASSESSEE IS ENTITLED FOR THE BENEFIT OF DOCTRINE OF MUTUALIT Y. THE DECISIONS RELIED UPON BY THE LEARNED DR ARE DISTINGUISHABLE ON FACTS AS THOSE DECISIONS HAVE BEEN DECIDED BY THE COURTS BY CONSIDERING THE FACTS OF THE RESPECTIVE CASE. IN LIGHT OF ABOVE DISCUSSION WE A RE INCLINED TO UPHOLD THE ORDER OF THE CIT(APPEALS). IT IS SUBMITTED THAT CIT(A) WHILE PASSING IMPUGNED ORDER RELIED ON THE ABOVE ORDER OF THE ITAT AND PASSED JUST AND PROPER ORDER THEREFORE THE SAME MAY BE UPHELD AND APPEAL OF THE REVENUE BE DISMISSED. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED MATE RIAL AVAILABLE ON RECORD. WE FIND THAT ON SIMILAR ISSUE FOR A.Y.2003-2004 ITAT BY THE ABOVE ORDER IN ASSESSEE'S OWN CASE DISM ISSED APPEAL OF THE REVENUE IN FAVOUR OF THE ASSESSEE AND RELYING ON THE SAME PROPOSITION CIT(A) ALLOWED THE CLAIM OF THE ASSESS EE BY THE IMPUGNED ITA N O.2772/AHD/2010 4 ORDER FOR THIS ASSESSMENT YEAR ALSO. THEREFORE WE FIND NO INFIRMITY IRJ ORDER OF CIT(A) WHICH IS UPHELD. 5. IN THE RESULT REVENUE'S APPEAL IS DISMISSED.' THEREFORE FACTS AND ISSUE ADMITTEDLY BEING COMMON ALSO IN THE ASSESSMENT YEAR UNDER CONSIDERATION RESPECTFULLY F OLLOWING THE ABOVE DECISIONS OF THE TRIBUNAL IN ASSESSEE'S OWN CASE W E UPHOLD THE IMPUGNED ORDER OF THE LEARNED CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 6. IN THE LIGHT OF CONSISTENT VIEW TAKEN BY THE IT AT IN THEIR DECISIONS IN THE ASSESSEES OWN CASE FOR THE AFORESAID AYS 2 003-04 & 2005- 06 ESPECIALLY WHEN FACTS AND THE CIRCUMSTANCES OBTA INING IN THE YEAR UNDER CONSIDERATION ARE SIMILAR TO FACTS AND CIRCU MSTANCES IN THE PRECEDING YEARS WE HAVE NO ALTERNATIVE BUT TO UPHO LD THE IMPUGNED ORDER OF THE LD. CIT(A) DELETING THE ADDITION. THER EFORE GROUND NO.1 IN THE APPEAL IS DISMISSED.. 7. GROUND NOS. 2 & 3 BEING MERE PRAYER AND GENERA L IN NATURE DO NOT REQUIRE ANY SEPARATE ADJUDICATION AND ARE THER EFORE DISMISSED. 8. IN THE RESULT APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT TODAY ON 13 01-2011 SD/- SD/- (MUKUL SHRAWAT) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATED : 13-01-2011 COPY OF THE ORDER FORWARDED TO: 1. RAJPATH CLUB LIMITED S G HIGHWAY THALTEJ AHME DABAD 2. DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE-5 AHM EDABAD 3. CIT CONCERNED 4. CIT(A)-XI AHMEDABAD 5. DR ITAT AHMEDABAD BENCH-C AHMEDABAD 6. GUARD FILE BY ORDER DEPU TY/ASSISTANT REGISTRAR ASSISTANT REGISTRAR ITAT AHMEDABAD