M/s Bangalore Club, Bangalore v. ITO, Bangalore

ITA 791/BANG/2010 | 2000-2001
Pronouncement Date: 06-09-2011 | Result: Allowed

Appeal Details

RSA Number 79121114 RSA 2010
Assessee PAN AAAAB1046L
Bench Bangalore
Appeal Number ITA 791/BANG/2010
Duration Of Justice 1 year(s) 2 month(s) 22 day(s)
Appellant M/s Bangalore Club, Bangalore
Respondent ITO, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 06-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 06-09-2011
Date Of Final Hearing 06-09-2011
Next Hearing Date 06-09-2011
Assessment Year 2000-2001
Appeal Filed On 14-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE SHRI N BARADHVAJA SANKAR VICE PRESIDENT AND SMT. P MADHAVI DEVI JUDICIAL MEMBER ITA NO.791 TO 7 96/BANG/2010 (ASST. YEAR 2000-01 AND 2002 -03 TO 2006-07) M/S BANGALORE CLUB NO.10 FILED MARSHALL K.M CARIAPPA ROAD BANGALORE-560 025. . APPELLANT PAN NO.AAAAB 1046L. VS. THE INCOME-TAX OFFICER WARD-1(1) H.M.T BHAVAN BELLARY ROAD BANGALORE. . RESPONDENT ASSESSEE BY : SHRI A SHANKAR REVENUE BY : SHRI G.V GOPALA RAO DATE OF HEARING : 06-09-2011 DATE OF PRONOUNCEMENT : 06-09-2011 O R D E R PER BENCH : THESE APPEALS ARE FILED BY THE ASSESSEE. THE RELEV ANT ASSESSMENT YEARS ARE 2000-01 AND 2002-03 TO 2006-07 . THE APPEALS ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AT BANGALORE DATED 17.03.2010. THE APPE ALS ARISE OUT OF THE ASSESSMENTS COMPLETED U/S 143(3) OF THE INCOME- TAX ACT 1961. ITA NOS.791 & 796/B/10 2 ITA NO.791/BANG/2010 : 2. IN THIS APPEAL THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE CIT(A) IN CONFIRMING THE ORDER OF THE AO HOLDING TH AT THE INTEREST INCOME ACCRUED ON THE FIXED DEPOSITS RECEIVED FROM THE CORPORATE MEMBERS OF THE ASSESSEE CLUB AND KEPT IN NATIONALIZ ED BANKS HAS TO BE TAXED AND THAT THE CONCEPT OF PRINCIPLE OF MUTUALIT Y DOES NOT APPLY TO THE INTEREST RECEIVED ON SUCH DEPOSITS. WITHOUT PR EJUDICE TO THIS CONTENTION THE ASSESSEE IS ALSO AGGRIEVED THAT THE CIT(A) IS NOT JUSTIFIED IN LAW IN NOT ALLOWING THE AUTHORIZED EXP ENDITURE INCURRED FOR EARNING OF THE INTEREST UNDER THE FACTS AND CIRCUMS TANCES OF THE CASE. THE ASSESSEE HAS ALSO CHALLENGED ITS LIABILITY TO B E CHARGED TO INTEREST U/S 244A OF THE INCOME-TAX ACT. 3. AT THE TIME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE SHRI A SHANKAR SUBMITTED THAT THESE ISSUES OF TAXAB ILITY OF THE INTEREST ON FIXED DEPOSITS KEPT WITH THE NATIONALIZED BANKS HAD ARISEN DURING THE EARLIER ASSESSMENT YEARS ALSO I.E FOR ASSESSMEN T YEAR 2001-02 AND THIS TRIBUNAL TAKING INTO CONSIDERATION THE FACT T HAT THE DECISION OF THE HONBLE HIGH COURT OF KARNATAKA IN THE ASSESSEES O WN CASE IN FAVOUR OF THE REVENUE HAS BEEN STAYED BY THE HONBLE SUPRE ME COURT IN SLP ITA NOS.791 & 796/B/10 3 14475/2006 HAS RESTORED THE ISSUE TO THE FILE OF T HE ASSESSING OFFICER WITH A DIRECTION TO FOLLOW THE DECISION OF THE HON BLE SUPREME COURT IN THE ASSESSEES OWN CASE FOR THE EARLIER ASSESSME NT YEARS. HE THUS PRAYED THAT FOR THE RELEVANT ASSESSMENT YEARS ALSO THE ISSUE MAY BE REMITTED TO THE FILE OF THE AO WITH A SIMILAR DIREC TION. 4. THE LEARNED DR THOUGH DID NOT LEAVE HIS GROUND T HAT DECISION OF THE HONBLE HIGH COURT ON THE SAME ISSUE IS IN I TS FAVOUR AND HAS TO BE FOLLOWED HOWEVER FAIRLY ADMITTED THAT THIS BENC H HAD TAKEN INTO CONSIDERATION THE VERY SAME ISSUE AND HAS REMITTED THE ISSUE TO THE AO WITH A DIRECTION TO FOLLOW THE DIRECTION OF THE HON BLE SUPREME COURT. THE COPY OF THE ORDER OF THE TRIBUNAL IS ALSO PLACE D ON RECORD. TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANCES OF T HE CASE AND PARTICULARLY THAT THE FACTS OF THE CASE BEFORE THE HONBLE APEX COURT ARE THE SAME AS THE CASE BEFORE US WE DEEM IT FIT AND PROPER TO RESTORE THIS ISSUE TO THE FILE OF THE AO WITH A DIRECTION T O AWAIT THE DECISION OF THE HONBLE SUPREME COURT IN THE ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEARS AND APPLY THE LAW AS PROPO UNDED BY THE HONBLE SUPREME COURT FOR THE RELEVANT ASSESSMENT Y EAR ALSO. AS REGARDS THE ALTERNATIVE CONTENTION ABOUT ALLOWING O F THE EXPENDITURE INCURRED FOR EARNING OF THE INTEREST INCOME THIS ISSUE IS A LSO REMITTED TO THE FILE OF ITA NOS.791 & 796/B/10 4 THE AO TO DECIDE THE SAME IN ACCORDANCE WITH LAW AF TER GIVING THE ASSESSEE A FAIR OPPORTUNITY OF HEARING. ITA NO.792 TO 796/BANG/2010 : 5. IN ADDITION TO THE GROUND OF APPEAL RAISED IN IT A NO.791/BANG/2011 THE ONLY OTHER ISSUE IN THESE APP EALS OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2002-03 IS WITH R EGARD TO THE VALIDITY OR LEGALITY OF THE PROCEEDINGS U/S 147 OF THE INCOME-TAX ACT. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT BEFORE REOPENING THE ASSESSMENT THE ASSESSING OFFICER IS REQUIRED T O FURNISH THE REASONS FOR REOPENING THE ASSESSMENT WHICH HAS NOT BEEN DONE IN THE ASSESSEES CASE. THUS ACCORDING TO HIM RE-ASSESSMEN T IS VOID-AB-INTIO AND IS TO BE CANCELLED. 6. THE LEARNED DR HOWEVER SUBMITTED THAT THE REASSE SSMENT IS VALID AS NOTICE U/S 148 OF THE INCOME-TAX ACT WAS I SSUED ONLY AFTER COMPLYING WITH THE CONDITIONS LAID DOWN THERE-UNDER . 7. HAVING HEARD BOTH THE PARTIES AND HAVING CONSIDE RED THE RIVAL CONTENTIONS WE FIND THAT THE MAIN ISSUE RELATING T O THE TAXABILITY OF THE ITA NOS.791 & 796/B/10 5 INTEREST INCOME HAS ALREADY BEEN SET ASIDE TO THE F ILE OF THE AO. THEREFORE WE DEEM IT FIT AND PROPER TO REMIT THIS ISSUE ALSO TO THE FILE OF THE AO WITH A DIRECTION TO FURNISH THE REASONS T O RE-OPEN THE ASSESSMENT TO THE ASSESSEE AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING THE OPPORTUNITY OF HEARING TO THE ASSESSEE AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW. 8. ON OTHER GROUNDS RELATING TO CHARGEABILITY OF IN TEREST U/S 234B AND 244A IS CONCERNED WE FIND THAT THEY ARE CONSEQ UENTIAL IN NATURE AND THE AO SHALL GIVE CONSEQUENTIAL RELIEF IF ANY. 9. IN THE RESULT THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 6TH SEPT 2011. SD/- SD/- (N BARADHVAJA SANKAR) (P MADHAVI DEVI) VICE PRESIDENT JUDICIAL MEMBER VMS BANGALORE DATED : 06/09/2011 ITA NOS.791 & 796/B/10 6 COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER ASST. REGISTRAR I TAT BANGALORE.