M/s Panchkula Golf Club, Panchkula V. ITO, Panchkula

ITA 1179/CHANDI/2011

• Counselvise Citation: 117921514 RSA 2011
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 24-01-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 07-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Assessee Lawyers: RAKESH GUPTA
• Keywords: Opportunity of being heard; Tax effect; Capital receipt
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI H.L.KARWA, VICE PRESIDENT AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 1179/CHD/2011 ASSESSMENT YEAR: 2008-09 M/S PANCHKULA GOLF CLUB, V ITO, WARD-2, SECTOR 3,PANCHKULA. PANCHKULA. PAN: AAAAP-5757C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAKESH GUPTA & RAJESH MALH OTRA RESPONDENT BY : SMT. JAISHREE SHARMA DATE OF HEARING : 24.01.2012 DATE OF PRONOUNCEMENT : 8.2.2012 ORDER PER MEHAR SINGH, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF CIT(A) PANCHKULA PASSED U/S 250(6) OF THE INCOME-TAX ACT,1961 (IN SHORT 'THE ACT') DATED 26.09.2011 RELATING TO ASSESSMENT YEAR 2008-09. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.81,94,632/- BY TREATING THE ONE TIME ENTRANCE FEE CONTRIBUTION FROM MEMBERS AS REVENUE RECEIPT WHEREAS AS PER THE ASSESSEE THE SAME PARTAKES THE CHARACTER OF CAPITAL RECEIPT AND THE AO HIMSELF TREATED THE SAID RECEIPT AS CAPITAL RECEIPT IN HIS ORDER 2 DATED 29.12.2009 FOR THE ASSESSMENT YEAR 2007-08. B) THAT ALTERNATIVELY AND WITHOUT PREJUDICE TO THE ABOVE, THE ASSESSEE ALSO DISPUTES THE AFORESAID ADDITION ON THE PRINCIPLE OF MUTUALITY WHICH WAS DISMISSED BY THE LD. CIT(A) ON THE PRETEXT THAT THE QUESTION OF PRINCIPLE OF MUTUALITY WAS DECIDED AGAINST THE ASSESSEE BY THE LD. AO WHILE PASSING THE ASSESSMENT ORDER DATED 29.12.2009 FOR THE ASSESSMENT YEAR 2007-08 AND THE SAME HAS NOT BEEN ASSAILED BY THE ASSESSEE AND BECOME FINAL WHEREAS AS PER THE ASSESSEE THE SAID ORDER DATED 29.12.2009 WAS NOT EARLIER ASSAILED BECAUSE THERE WAS NO TAX EFFECT IN THE SAID ORDER THEREFORE, JUST TO AVOID PROTRACTED LITIGATION THE SAID WAS NOT ASSAILED, FURTHERMORE, THE NATURE OF RECEIPT, TO BE CAPITAL, WAS ACCEPTED BY THE LD. AO IN THE SAID ORDER DATED 29.12.2009. 2. THAT THE ASSESSEE PRAYS FOR ANY CONSEQUENTIAL RELIEF AND/OR LEGAL CLAIM ARISING OUT OF THIS APPEAL BEFORE THE DISPOSAL OF THE SAME. 3. THAT THE ASSESSEE PRAYS FOR ANY ADDITION, DELETION, AMENDMENT AND MODIFICATION IN THE GROUNDS OF APPEAL BEFORE THE DISPOSAL OF THE SAME IN THE INTEREST OF SUBSTANTIAL JUSTICE TO THE ASSESSEE. 3. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS BEFORE THE BENCH, LD. 'AR' CONTENDED THAT ONE TIME CONTRIBUTION TOWARDS ENTRANCE FEE FROM THE MEMBERS IS PERSE CAPITAL RECEIPT AND, HENCE, CANNOT BE BROUGHT TO TAX AS REVENUE RECEIPT. IT WAS, FURTHER, CONTENDED BY THE LD. 'AR' THAT THE IMPUGNED ADDITION CAN ALSO NO T BE 3 SUSTAINED IN VIEW OF THE PRINCIPAL OF MUTUALITY, APPLICABLE TO THE FACTS OF THE PRESENT CASE. 4. HOWEVER, LD. 'DR' CONTENDED THAT THE ISSUE OF ON E TIME ENTRANCE FEE CONTRIBUTION FROM MEMBERS, HAS NO T BEEN CONSIDERED BY THE AO. THEREFORE, AS CONCEDED BY THE LD. 'AR', LD. 'DR' WAS ALSO OF THE OPINION THA T THE ISSUE MAY ALSO BE RESTORED TO THE FILE OF THE AO, F OR FRESH ADJUDICATION. 5. THE BRIEF FACTS OF THE CASE ARE, THAT THE ASSESS EE CLUB FILED ITS RETURN OF INCOME, DECLARING NIL IN COME ON 29.09.2009. THE AO FRAMED ASSESSMENT U/S 143(3) OF THE ACT AT AN INCOME OF RS.33,93,740/-. THE ADDITI ON WAS MADE BY THE AO ON ACCOUNT OF AMOUNT RECEIVED AS ONE TIME CONTRIBUTION FROM MEMBERS. LD. CIT(A) UPHE LD THE SAID ADDITION. 6. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS, LD. 'AR' PLACED RELIANCE, ON THE DECISION OF CIT V DINE RS BUSINESS SERVICES (P) LTD. (2003) 263 ITR 1 (BOM), CIT V STANDING CONFERENCE OF PUBLIC ENTERPRISES (SCOPE) (2009) 319 ITR 179 (DEL) AND ACIT V KARNAVATI CLUB LTD. (2010) 4 ITR (TRIB) 174 (AHD), TO SUPPORT THE CONTENTION. 7. HAVING REGARD TO THE ABOVE LEGAL AND FACTUAL DISCUSSIONS AND THE RIVAL SUBMISSIONS, WE ARE OF TH E CONSIDERED OPINION THAT THE ISSUE OF MUTUALITY AND ONE TIME CONTRIBUTION, RECEIVED AS ENTRANCE FEE FROM IT S 4 MEMBERS, BE RESTORED TO THE FILE OF THE AO, FOR FRE SH ADJUDICATION, IN TERMS OF THE DECISIONS CITED BY TH E LD. 'AR' AND ALSO ACCORDING TO THE RELEVANT PROVISIONS OF THE ACT. AO IS DIRECTED TO AFFORD PROPER AND REASONABL E OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH FEB. 2012. SD/- SD/- (H.L.KARWA) (MEHAR SINGH) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 8 TH FEB., 2012. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR ITAT,CHANDIGARH