ITO (E) 2(2), MUMBAI V. PARMANANDDAS JIVANDAS HINDU GYMIHANA, MUMBAI

ITA 1072/MUM/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0233 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 02-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Depreciation; Rule of consistency

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE D.T. GARASIA, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.1072/M/2016 ASSESSMENT YEAR: 2006-07 INCOME TAX OFFICER (E), 2(2), R. NO.502, 5 TH FLR., PIRAMAL CHAMBERS, LALBAUG, MUMBAI 400 012 VS. M/S. PARMANANDDAS JIVANDAS HINDU, NETAJI SUBHASH ROAD, MUMBAI 400 002 PAN: AAACP3868Q (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI NIRAJ SHETH, A.R. REVENUE BY : SHRI PURUSHOTTAM KUMAR, D.R. DATE OF HEARING : 26.07.2017 DATE OF PRONOUNCEMENT : 18.08.2017 O R D E R PER D.T. GARASIA , JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 21.12.2015 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2006-07. 2. THE SHORT FACTS OF THE CASE ARE AS UNDER: THE ASSESSEE IS A GYMKHANA. DURING THE YEAR, THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS.93.16 LAKHS AS INCOME FROM GYMKHANA AND RS.38.39 LAKHS AS INTEREST AND OTHER INCOME. THE ASSESSEE, IN THIS P ROFIT & LOSS ACCOUNT, HAS CLAIMED EXPENSES OF RS.1.90 CRORES WHICH IS MAINLY ON ACCOUNT OF GENERAL DEPARTMENT EXPENSES AT RS.70.99 LAKHS, GAME EXPENSE S AT RS.37.10 LAKHS, DEPRECIATION OF RS.9.84 LAKHS AND DEFERRED RENOVATI ON/REPAIR WRITTEN OFF OF RS.71.71 LAKHS AGAINST THE GROSS RECEIPT. THE ASSE SSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) HELD THAT THE INTEREST INCOM E OF RS.38,39,300/- IS TAXABLE ITA NO.1072/M/2016 M/S. PARMANANDDAS JIVANDAS HINDU 2 IN VIEW OF THE LAW LAID DOWN BY THE APEX COURT IN T HE CASE OF BANGALORE CLUB VS. CIT & ANR. BEING CIVIL APPEAL NO.124 OF 2007 DA TED 14.01.2013. 3. MATTER CARRIED TO THE LD. CIT(A) AND THE LD. CIT (A) HAS ALLOWED THE CLAIM OF THE ASSESSEE. HENCE, THE REVENUE IS IN AP PEAL BEFORE US. 4. DURING THE COURSE OF HEARING, THE LD. A.R. SUBMI TTED THAT THE ISSUE IN CONTROVERSY IS COVERED BY THE DECISION OF THE TRIBU NAL IN THE OWN CASE OF THE ASSESSEE IN ITA NO.1057/M/2011 FOR A.Y. 2010-11 WHE REIN THE TRIBUNAL HAS DECIDED THE APPEAL IN FAVOUR OF THE ASSESSEE AND DI SMISSED THE DEPARTMENTAL APPEAL, THEREFORE, APPEAL MAY BE DISMISSED. 5. THE LD. D.R. HAS NO OBJECTION. 6. HAVING HEARING HEARD BOTH THE PARTIES, WE FIND T HAT THE ISSUE IN CONTROVERSY IS COVERED BY THE DECISION OF THE TRIBU NAL IN THE OWN CASE OF THE ASSESSEE WHEREIN THE TRIBUNAL HAS DECIDED THIS ISSU E BY OBSERVING AS UNDER: 5. HERE, IT IS NOT A CASE WHERE INTEREST INCOME IS BEING SOUGHT AS EXEMPT OR NON-TAXABLE ON THE GROUNDS OF 'PRINCIPAL OF MUTUALI TY', BUT THE TREATMENT OF INTEREST INCOME, WHETHER TO BE ASSESSED UNDER THE H EAD 'BUSINESS INCOME' OR 'INCOME FROM OTHER SOURCES'. AS STATED EARLIER, IN THE CASE OF THE ASSESSEE ITSELF CONSISTENT VIEW HAS BEEN TAKEN AND FOLLOWED UPTILL ASSESSMENT YEAR 2009-10 BY THE FIRST APPELLATE AUTHORITIES AND TRIBUNAL THAT I NTEREST INCOME IS TO BE TAXED UNDER THE HEAD 'BUSINESS INCOME'. THUS, CONSISTENT WITH THE VIEW TAKEN EARLIER, WE DECLINE TO ACCEPT THE CONTENTION OF THE REVENUE THAT SAME SHOULD BE TAXED AS 'INCOME FROM OTHER SOURCES' IN THIS YEAR WITHOUT THERE BEING ANY CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. FOR THE SA KE OF READY REFERENCE, THE RELEVANT FINDING OF THE TRIBUNAL FOR THE AY 2009-10 IN ITA NO.3605/MUM/2013 VIDE ORDER DATED 22.08.2014 IS REPRODUCED HEREUNDER :- 7. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE ORDE RS OF THE REVENUE AUTHORITIES AND THE RELEVANT MATERIAL PLACED BEFORE US AS WELL AS THE CITED ORDERS OF THE TRIBUNAL (SUPRA). ON PERUSAL OF THE TRIBUNAL'S ORDER DATED 3 1.5.2012 (SUPRA), WE FIND THE PARA 7 IS REL EVANT IN THIS REGARD WHICH READS AS UNDER: '7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND T HAT THERE IS NO DISPUTE THAT THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE ITA NO.1072/M/2016 M/S. PARMANANDDAS JIVANDAS HINDU 3 BY THE VARIOUS DECISIONS OF THE TRIBUNAL IN ASSESSE E'S OWN CASE. THE TRIBUNAL IN ITA NO.1629/MUM/2010, DATED 14.1.2011 F OR AY 2005-2006 IN ASSESSEE'S OWN CASE AFTER CONSIDERING ALL THE DE CISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE HAS HELD VIDE P ARA 6 OF ITS ORDER AS UNDER: '6. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE R IVAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD WE FIND M ERIT IN THE PLEA OF THE LD COUNSEL FOR THE ASSESSEE THAT THE ISSUE I S SQUARELY COVERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE B Y THE ORDER OF THE TRIBUNAL IN ITA NO.2963/BOM/89 FOR ASSESSMEN T YEAR 1985-86 DATED 29.8.1996 WHEREIN THE TRIBUNAL BY FOLLOWING T HE ORDER OF THE TRIBUNAL IN ITO VS. THE FIRE SALVAGE ASSOCIATION OF BOMBAY LIMITED IN [TA NO.1889 & 1 461/BOM/ 73-74 HAS HELD VIDE PARA 9 OF ITS ORDER THAT THE INTEREST INCOME DERIVED B THE ASSESSEE FROM FIX ED DEPOSITS IS TO BE TREATED AS BUSINESS INCOME AND DEDUCTION B E ALLOWED AS IN THE EARLIER YEARS. THE ABOVE ORDER OF THE TRIBUNAL HAS BEEN FOLLOWED BY THE TRIBUNAL IN THE SUBSEQUENT ASSESSMENT YEARS AS ABOV E. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUGHT ON RECORD BY THE REVENUE, WE, RESPECTFULLY FOLLOWING THE CONSISTENT VIEW OF THE T RIBUNAL HOLD THAT THE INTEREST INCOME DERIVED BY THE ASSESSEE FROM THE FD RS SHOULD BE ASSESSED AS INCOME FROM BUSINESS AND ACCORDINGLY WE ARE INCLINED TO UPHOLD THE FINDING OF THE CIT (A) IN ALLOUANG THE C LAIM OF THE ASSESSEE. THE GROUNDS TAKEN BY THE REVENUE, ARE, THEREFORE, REJEC TED.' KEEPING IN VIEW THE RULE OF CONSISTENCY, WE HOLD TH AT THE INTEREST INCOME DERIVED BY THE ASSESSEE FROM THE FDRS SHOULD BE ASSESSED AS INCOME FROM BUSINESS AND ACCORDINGLY THE ORDER P ASSED BY THE CIT (A) IN ALLOWING THE CLAIM OF THE ASSESSEE DOES NOT CALL FO R ANY INTERFERENCE. THE GROUNDS TAKEN BY THE REVENUE ARE, THEREFORE, REJECT ED.' 8. CONSIDERING THE ABOVE SETTLED NATURE OF THE ISSU E IN THIS CASE ON IDENTICAL ISSUE, WE ARE OF THE OPINION THAT THE DECISION TAKEN BY THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISM ISSED. 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. 7. RESPECTFULLY FOLLOWING THE SAME, WE DISMISS THE DEPARTMENTAL APPEAL. ORDER PRONOUNCED IN THE OPEN COURT ON 18.08.2017. SD/- SD/- (RAJESH KUMAR) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 18.08.2017. * KISHORE, SR. P.S. ITA NO.1072/M/2016 M/S. PARMANANDDAS JIVANDAS HINDU 4 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.