M/s Waltair Club, Visakhapatnam V. THE ACIT, CIRCLE - 4(1), Visakhapatnam

ITA 134/VIZ/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0211 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 10-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 23-04-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K GOPALAKRISHNA
• Keywords: Source of fund; Tangible material
• Section: 142(1); 147; 148

Judgement Text

ITA NOS.435&436/VIZAG/2012 & 134/VIZAG/2014 WALTAIR CLUB, VISAKHAPATNAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . . . . , ,, , . . . . , , , , % % % % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER . .. ./ // / I.T.A.NOS.435&436/VIZAG/2012 ( / ASSESSMENT YEAR : 2007-08 & 2008-09 ) ACIT CIRCLE-4(1) VISAKHAPATNAM VS. M/S. WALTAIR CLUB VISAKHAPATNAM [ PAN: AAACW1956C] (, , , , / APPELLANT) (-., -., -., -., / RESPONDENT ) . .. ./ // / I.T.A.NO.134/VIZAG/2014 ( / ASSESSMENT YEAR : 2009-10 ) M/S. WALTAIR CLUB VISAKHAPATNAM VS. ACIT CIRCLE - 4(1) VISAKHAPATNAM ( , , , , / APPELLANT) ( -., -., -., -., / RESPONDENT ) , / / APPELLANT BY : SHRI G.V.N. HARI, AR -., / / RESPONDENT BY : SHRI K. GOPALA KRISHNA, DR / 3 / DATE OF HEARING : 10.09.2015 / 3 / DATE OF PRONOUNCEMENT : 06.11.2015 ITA NOS.435&436/VIZAG/2012 & 134/VIZAG/2014 WALTAIR CLUB, VISAKHAPATNAM 2 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THE FIRST TWO APPEALS I.E. ITA NOS.435 & 436/VIZAG /2012 ARE FILED BY THE REVENUE FOR THE A.YS 2007-08 & 2008-09 AND T HE THIRD APPEAL ITA NO.134/VIZAG/2014 FOR THE A.Y. 2009-10 WAS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A), VISAKHAPATNAM DATE D 27.9.2012. 2. FACTS ARE IN BRIEF THAT THE ASSESSEE COMPANY IS A MUTUAL CLUB INCORPORATED AS A LIMITED COMPANY. THE ASSESSEE HA D FILED A RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION BY DECLARIN G TOTAL INCOME OF RS.2,37,720/-. IN THE ASSESSMENT ORDER, THE A.O. H AS OBSERVED THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE H AS RECEIVED AN AMOUNT OF RS.23,53,743/- AS AN INTEREST FROM BANK D EPOSITS. THE ASSESSEE HAS CLAIMED EXEMPTION ON THIS INTEREST INC OME ON THE PRINCIPLE OF MUTUALITY. THE A.O. BY REOPENING THE ASSESSMENT BY ISSUING A NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 (HEREINAFTER CA LLED AS THE ACT) CALLED UPON THE ASSESSEE AND ASKED TO EXPLAIN AS TO WHY THE INTEREST INCOME SHOULD NOT BE BROUGHT TO TAX. IT WAS SUBMIT TED BY THE ASSESSEE BEFORE THE A.O. THAT THE INTEREST RECEIVED BY CLUB IS EXEMPT FROM TAX ON THE PRINCIPLES OF MUTUALITY AND HE RELIED ON CERTAI N CASES BEFORE THE A.O. ITA NOS.435&436/VIZAG/2012 & 134/VIZAG/2014 WALTAIR CLUB, VISAKHAPATNAM 3 AND SUBMITTED THAT INCOME FROM BANK DEPOSITS AND IN VESTMENTS OF A MUTUAL CLUB ARE NOT LIABLE TO TAX ON THE PRINCIPLES OF MUTUALITY. 3. THE ASSESSING OFFICER AFTER CONSIDERING THE EXPL ANATIONS OF THE ASSESSEE HAS OBSERVED THAT IN THE INSTANT ASSESSEE S CLUB WHICH HAS DEPOSITED ITS SURPLUS FUNDS IN A FIXED DEPOSIT WITH THE BANKS DOES NOT QUALIFY FOR PRINCIPLES OF NO MAN CAN TRADE WITH HIM SELF AND THE RELATIONSHIP BETWEEN THE BANK AND ASSESSEE CLUB IS THAT OF A BANKER AND CUSTOMER. THEREFORE, THE PRINCIPLES OF MUTUALITY I S NOT APPLICABLE TO THE FUNDS DEPOSITED WITH THE BANKS AND THE INTEREST DER IVED FROM SUCH FIXED DEPOSITS IS NOT EXEMPT FROM TAX. ACCORDINGLY, THE INTEREST INCOME OF RS.23,53,743/- RECEIVED BY ASSESSEE FROM THE FDR IS BROUGHT TO TAX AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 4. ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) AND SUBMITTED THAT INCOME FROM DEPOSITS AND INVESTMENTS OF A CLUB IS NOT LIABLE TO TAX ON THE PRINCIPLES OF MUTUALITY. THE LD. CIT(A) BY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNA L IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2006-07 IN ITA NO. 103/VIZAG/2010 DATED 2.7.2010 DIRECTED THE A.O. TO DELETE THE ADDI TIONS MADE FOR THE ASSESSMENT YEAR 2007-08 AS WELL AS 2008-09. ITA NOS.435&436/VIZAG/2012 & 134/VIZAG/2014 WALTAIR CLUB, VISAKHAPATNAM 4 5. ON BEING AGGRIEVED, THE REVENUE CARRIED THE MATT ER IN APPEAL BEFORE THE TRIBUNAL. 6. THE LD. D.R. HAS SUBMITTED THAT THE ISSUE INVOLV ED IN THIS APPEAL I.E. WHETHER INTEREST RECEIVED FROM THE FDR BY THE ASSESSEE CLUB IS TAXABLE OR NOT SQUARELY COVERED BY THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF M/S. BANGALORE CLUB VS . CIT & OTHERS 350 ITR 509 AND SUBMITTED THAT THE ORDER PASSED BY THE CIT(A) HAS TO BE REVERSED AND ADDITION MADE BY THE A.O. HAS TO BE UP HELD. 7. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE HAS SUBMITTED THAT THE ASSESSEE HAS DEPOSITED SURPLUS FUNDS IN A BANK AS PER THE ARTICLES OF ASSOCIATION AND THEREFORE, THE AMOUNT R ECEIVED BY THE ASSESSEE FROM THE FIXED DEPOSIT CANNOT BE TAXED ON THE PRINCIPLES OF MUTUALITY. HE ALSO SUBMITTED THAT FOR ASSESSMENT Y EAR 2006-07, THE HONBLE TRIBUNAL BY FOLLOWING THE ORDER OF THE HYDE RABAD BENCH IN THE CASE OF FATEH MAIDAN CLUB VS. CIT 81 TTJ 831 (HYD) HAS HELD THAT INTEREST INCOME RECEIVED BY THE ASSESSEE IS NOT TAX ABLE AND THEREFORE SUBMITTED THAT THE SAME MAY BE FOLLOWED AND SUBMITT ED THAT THE LD. CIT(A)S ORDER MAY BE UPHELD. HE FURTHER SUBMITTED THAT THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CANARA BANK GOL DEN JUBILEE STAFF WELFARE FUND VS. DCIT 308 ITR 202 (2009) HAS HELD TH AT THE SOCIETY IS ITA NOS.435&436/VIZAG/2012 & 134/VIZAG/2014 WALTAIR CLUB, VISAKHAPATNAM 5 HAVING BEEN FORMED FOR THE MUTUAL BENEFITS OF ITS M EMBERS INCOME EARNED BY IT BY WAY OF INTEREST AND DIVIDEND BY MAK ING INVESTMENTS OF SURPLUS FUNDS WHICH IS WHOLLY CONTRIBUTED BY THE ME MBERS IS GOVERNED BY THE PRINCIPLES OF MUTUALITY AND IS NOT TAXABLE A ND SUBMITTED THAT AGAINST THE ORDER OF THE ABOVE JUDGEMENT OF THE HON BLE KARNATAKA HIGH COURT, THE DEPARTMENT HAS CARRIED THE MATTER IN APP EAL BEFORE THE HONBLE SUPREME COURT. THE SAME WAS DISMISSED BY T HE HONBLE SUPREME COURT IN SLP(C) NO.19004 OF 2009 DATED 28.7 .2009. HE ALSO RELIED ON THE DECISION OF THE CIT VS. STANDING CONF ERENCE OF PUBLIC ENTERPRISES 319 ITR 179 (2009). THE HONBLE DELHI HIGH COURT HAS CONSIDERED THE PRINCIPLES OF MUTUALITY DECIDED IN F AVOUR OF THE ASSESSEE. THE VERY SAME ORDER CARRIED TO THE HONBLE SUPREME COURT BY WAY OF SLP AND THE HONBLE SUPREME COURT IN SLP(C) NO.300 07 OF 2010 DATED 18.10.2010, DISMISSED THE SAME AND SUBMITTED THAT I NTEREST RECEIVED BY THE ASSESSEE BY FIXED DEPOSIT IS EXEMPT FROM THE TA XABLE INCOME ON THE GROUND OF MUTUALITY. THEREFORE, HE PRAYED THAT THE LD. CIT(A)S ORDER MAY BE UPHELD. THE LD. COUNSEL FOR THE ASSESSEE FU RTHER SUBMITTED THAT THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE C ASE OF BANGALORE CLUB NO APPLICATION TO THE FACTS OF THE PRESENT CAS E FOR THE REASON THAT IN THE CASE OF BANGALORE CLUB, THE SURPLUS AMOUNTS OF THE ASSESSEE WAS DEPOSITED IN THE BANK IN WHICH THE BANK IS ALSO A M EMBER OF THE ITA NOS.435&436/VIZAG/2012 & 134/VIZAG/2014 WALTAIR CLUB, VISAKHAPATNAM 6 ASSESSEE CLUB. IN THE PRESENT CASE THE FUNDS WERE DEPOSITED IN A BANK WHICH IS NOT A MEMBER OF ASSESSEES CLUB. 8. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE RECOR DS, GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES. THE A SSESSEE COMPANY IS A MUTUAL CLUB INCORPORATED AS A LIMITED COMPANY. THE ASSESSEE FILED RETURN OF INCOME U/S 143(1) OF THE ACT BY DISCLOSIN G THE TOTAL INCOME OF RS.2,37,720/-. THE RETURN FILED BY THE ASSESSEE WAS PROCESSED U/S 143(1) OF THE ACT. THEREAFTER, FOLLOWING THE DUE P ROCESS, ASSESSMENT WAS COMPLETED U/S 143 R.W.S. 147 OF THE ACT AND THE A.O. HAS BROUGHT THE INTEREST INCOME OF RS.23,53,743/- ON THE GROUND THAT THE PRINCIPLES OF MUTUALITY NO APPLICATION. THE A.O. BEFORE TAXIN G THE ABOVE INCOME HAS CALLED THE EXPLANATION OF THE ASSESSEE WHY THE INTEREST INCOME SHOULD NOT BE BROUGHT TO TAX. IN RESPONSE TO THAT THE ASSESSEES COUNSEL BY RELYING ON THE VARIOUS CASE LAWS SUBMITT ED THAT INTEREST INCOME RECEIVED BY CLUB IS EXEMPT FROM TAXATION ON THE PRINCIPLES OF MUTUALITY AND THE SAME SHOULD NOT BE BROUGHT TO THE TAX. THE ASSESSING OFFICER AFTER CONSIDERING THE EXPLANATIONS OF THE A SSESSEE CAME TO THE CONCLUSION THAT THE RELATIONSHIP BETWEEN THE ASSESS EE CLUB AND THE BANK IS JUST LIKE A BANKER AND CUSTOMER. THE AMOUNT DEP OSITED BY THE ASSESSEES CLUB IS JUST LIKE ANY OTHER CUSTOMER AND RECEIVED THE INTEREST, ITA NOS.435&436/VIZAG/2012 & 134/VIZAG/2014 WALTAIR CLUB, VISAKHAPATNAM 7 THEREFORE, THE PRINCIPLE OF MUTUALITY NO APPLICATIO N FOR THE INTEREST AMOUNT RECEIVED BY THE ASSESSEE CLUB FROM THE BANK AND ACCORDINGLY THE INTEREST INCOME OF RS.23,53,743/- RECEIVED BY T HE ASSESSEE FROM THE FDR IS BROUGHT TO TAXATION. 9. ON APPEAL, THE LD. CIT(A) BY FOLLOWING THE ASSES SEES OWN CASE IN ITA NO.103/VIZAG/2010 FOR THE ASSESSMENT YEAR 2006- 07 BY ORDER DATED 2.7.2010 BY FOLLOWING THE DECISION IN THE CASE OF F ATEH MAIDAN CLUB (SUPRA) HAS OBSERVED THAT WHENEVER THE FUNDS WERE K EPT IN THE FIXED DEPOSITS AS PER THE REQUIREMENT OF THE BYE LAWS OF THE CLUB, THE INTEREST INCOME GENERATED THEREON IS EXEMPT ON THE PRINCIPLE S OF MUTUALITY AND CANNOT BE ASSESSED TO TAX AS AN INCOME FROM OTHER S OURCES. 10. WE HAVE GONE THROUGH THE ASSESSMENT ORDER AND LD . CIT(A)S ORDER AND ALSO ORDER PASSED BY THE COORDINATE BENCH OF THE TRIBUNAL AND WE FIND THAT RECENTLY THE HONBLE SUPREME COURT IN THE CASE OF BANGALORE CLUB VS. CIT 350 ITR 509 HAS EXAMINED THE SCOPE OF THE PRINCIPLES OF MUTUALITY VIS--VIS SURPLUS DEPOSITS IN A BANK AND BY CONSIDERING VARIOUS CASE LAWS, THE HONBLE SUPREME COURT HAS CONSIDERED THE SCOPE OF THE PRINCIPLES OF MUTUALITY . FOR THE SAKE OF CONVENIENCE THE RELEVANT PORTION OF THE ORDER IS EX TRACTED AS UNDER: ITA NOS.435&436/VIZAG/2012 & 134/VIZAG/2014 WALTAIR CLUB, VISAKHAPATNAM 8 26. FIRSTLY, THE ARRANGEMENT LACKS A COMPLETE IDENT ITY BETWEEN THE CONTRIBUTORS AND PARTICIPATORS. TILL TH E STAGE OF GENERATION OF SURPLUS FUNDS, THE SETUP RESEMBLED TH AT OF A MUTUALITY; THE FLOW OF MONEY, TO AND FRO, WAS MAINT AINED WITHIN THE CLOSED CIRCUIT FORMED BY THE BANKS AND T HE CLUB, AND TO THAT EXTENT, NOBODY WHO WAS NOT PRIVY TO THIS MU TUALITY, BENEFITED FROM THE ARRANGEMENT. HOWEVER, AS SOON AS THESE FUNDS WERE PLACED IN FIXED DEPOSITS WITH BANKS, THE CLOSED FLOW OF FUNDS BETWEEN THE BANKS AND THE CLUB SUFFERED FR OM DEFLECTIONS DUE TO EXPOSURE TO COMMERCIAL BANKING O PERATIONS. DURING THE COURSE OF THEIR BANKING BUSINESS, THE ME MBER BANKS USED SUCH DEPOSITS TO ADVANCE LOANS TO THEIR CLIENTS. HENCE, IN THE PRESENT CASE, WITH THE FUNDS OF THE M UTUALITY, MEMBER BANKS ENGAGED IN COMMERCIAL OPERATIONS WITH THIRD PARTIES OUTSIDE OF THE MUTUALITY, RUPTURING THE 'PR IVITY OF MUTUALITY', AND CONSEQUENTLY, VIOLATING THE ONE TO ONE IDENTITY BETWEEN THE CONTRIBUTORS AND PARTICIPATORS AS MANDA TED BY THE FIRST CONDITION. THUS, IN THE CASE BEFORE US TH E FIRST CONDITION FOR A CLAIM OF MUTUALITY IS NOT SATISFIED . 27. AS AFORESAID, THE SECOND CONDITION DEMANDS THAT TO CLAIM AN EXEMPTION FROM TAX ON THE PRINCIPLE OF MUT UALITY, TREATMENT OF THE EXCESS FUNDS MUST BE IN FURTHERANC E OF THE OBJECT OF THE CLUB, WHICH IS NOT THE CASE HERE. IN THE INSTANT CASE, THE SURPLUS FUNDS WERE NOT USED FOR ANY SPECI FIC SERVICE, INFRASTRUCTURE, MAINTENANCE OR FOR ANY OTHER DIRECT BENEFIT FOR THE MEMBER OF THE CLUB. THESE WERE TAKEN OUT OF MUTUALI TY WHEN THE MEMBER BANKS PLACED THE SAME AT THE DISPOSAL OF THI RD PARTIES, THUS, INITIATING AN INDEPENDENT CONTRACT BETWEEN TH E BANK AND THE CLIENTS OF THE BANK, A THIRD PARTY', NOT PRIVY TO THE MUTUALITY. THIS CONTRACT LACKED THE DEGREE OF PROXI MITY BETWEEN THE CLUB AND ITS MEMBER, WHICH MAY IN A DIS TANT AND INDIRECT WAY BENEFIT THE CLUB, NONETHELESS, IT CANN OT BE CATEGORIZED AS AN ACTIVITY OF THE CLUB IN PURSUIT O F ITS OBJECTIVES. IT NEEDS LITTLE EMPHASIS THAT THE SECOND CONDITION POS TULATES A DIRECT STEP WITH DIRECT BENEFITS TO' THE FUNCTIONIN G OF THE CLUB. FOR THE SAKE OF ARGUMENT, ONE MAY DRAW REMOTE CONNE CTIONS WITH THE MOST BRAZEN COMMERCIAL ACTIVITIES TO A CLUB'S F UNCTIONING. HOWEVER, SUCH IS NOT THE DESIGN OF THE SECOND. COND ITION. THEREFORE, IT STANDS VIOLATED'. 28. THE FACTS AT HAND ALSO FAIL TO SATISFY THE THIRD CO NDITION OF THE MUTUALITY PRINCIPLE I.E. THE IMPOSSIBILITY THAT CONTRIBUTORS SHOULD DERIVE PROFITS FROM CONTRIBUTIONS MADE BY TH EMSELVES TO A. FUND WHICH COULD ONLY BE EXPENDED OR RETURNED TO THEMSELVES. THIS PRINCIPLE REQUIRES THAT THE FUNDS MUST BE RETURNED TO THE CONTRIBUTORS AS WELL AS EXPENDED SO LELY ON THE CONTRIBUTORS. TRUE, THAT IN THE PRESENT CASE, THE F UNDS DO RETURN ITA NOS.435&436/VIZAG/2012 & 134/VIZAG/2014 WALTAIR CLUB, VISAKHAPATNAM 9 TO THE CLUB.. HOWEVER, BEFORE THAT, THEY ARE EXPEND ED ON NON- MEMBERS I.E. THE CLIENTS OF THE BANK. BANKS GENERAT E REVENUE BY PAYING A LOWER RATE OF INTEREST TO CLUB-ASSESSEE, T HAT MAKES DEPOSITS WITH THEM, AND THEN LOAN OUT THE DEPOSITED AMOUNTS AT A HIGHER RATE OF INTEREST TO THIRD PARTIES. THIS LOAN ING OUT OF FUNDS OF 'THE CLUB BY BANKS TO OUTSIDERS FOR COMMER CIAL REASONS, IN OUR OPINION, SNAPS THE LINK OF MUTUALIT Y AND THUS, BREACHES THE THIRD CONDITION. 29. THERE IS NOTHING ON RECORD WHICH SHOWS THAT THE BANKS MADE SEPARATE AND SPECIAL PROVISIONS FOR THE FUNDS THAT CAME FROM THE CLUB, OR THAT THEY DID NOT LOAN THEM OUT. THEREFORE , CLEARLY, THE CLUB DID NOT GIVE, OR GET, THE TREATMENT A CLUB GET S FROM ITS MEMBERS; THE INTERACTION BETWEEN THEM. CLEARLY REFL ECTED ONE BETWEEN A BANK AND ITS CLIENT. THIS DIRECTLY CONTRA VENES THE THIRD CONDITION AS ELUCIDATED IN STYLES AND KUMBAKO NAM MUTUAL BENEFIT FUND LTD. CASES (SUPRA). ROWLATT 3., ' IN OUR OPINION, CORRECTLY POINTS OUT THAT IF PROFITS ARE D ISTRIBUTED TO SHAREHOLDERS AS SHAREHOLDERS, THE PRINCIPLE OF MUTU ALITY IS NOT SATISFIED. IN THOMAS VS. RICHARD EVANS & CO. (SUPRA ), AT PP. 822- 823, HE OBSERVED THUS: - BUT A COMPANY CAN MAKE A PROFIT OUT OF ITS MEMBERS AS CUSTOMERS, ALTHOUGH ITS RANGE OF CUSTOMERS IS LIMIT ED TO ITS SHAREHOLDERS. IF A RAILWAY COMPANY MAKES A PROFIT BY CARRYING ITS SHAREHOLDERS, OR IF A TRADING COMPANY, BY TRADING W ITH THE SHAREHOLDERS EVEN IF IT LIMITED TO TRADING WITH T HEM MAKES A PROFIT, THAT PROFIT BELONGS TO THE SHAREHOLDERS, IN A SENSE, BUT IT BELONGS TO THEM QUA SHAREHOLDERS. IT DOES NOT COME BACK TO THEM AS PURCHASERS OR CUSTOMERS. IT COMES BACK TO THEM AS SHAREHOLDERS, UPON THEIR SHARES. WHERE ALL THAT A COMPANY DOES IS TO COLLECT MONEY F ROM A CERTAIN NUMBER OF PEOPLE - IT DOES NOT MATTER WHETHER THEY ARE CALLED MEMBERS OF THE COMPANY, OR PARTICIPATING POLICY HOL DERS - AND APPLY IT FOR THE BENEFIT OF THOSE SAME PEOPLE, NOT AS SHAREHOLDERS IN THE COMPANY, BUT AS THE PEOPLE WHO SUBSCRIBED IT, THEN, AS I UNDERSTAND THE NEW YORK CASE, THERE IS NO PROFIT. IF THE PEOPLE WERE TO DO THE THING FOR THEMSELVES, THE RE WOULD BE NO PROFIT, AND THE FACT THAT THEY INCORPORATE A LEG AL ENTITY TO DO IT FOR THEM MAKES NO DIFFERENCE, THERE .IS STILL NO PR OFIT. THIS IS NOT BECAUSE THE ENTITY OF THE COMPANY IS TO BE DISREGAR DED, IT IS BECAUSE THERE IS NO PROFIT, THE MONEY BEING SIMPLY COLLECTED FROM THOSE PEOPLE AND HANDED BACK TO THEM, NOT IN THE CH ARACTER OF SHAREHOLDERS, BUT IN THE CHARACTER OF THOSE WHO HAV E PAID IT. THAT, AS 1 UNDERSTAND IT, IS THE EFFECT OF THE DECISION I N THE NEW YORK CASE.' ITA NOS.435&436/VIZAG/2012 & 134/VIZAG/2014 WALTAIR CLUB, VISAKHAPATNAM 10 (EMPHASIS SUPPLIED) IN THE PRESENT CASE, THE INTEREST ACCRUES ON THE SU RPLUS DEPOSITED BY THE CLUB LIKE IN THE CASE OF ANY OTHER DEPOSIT M ADE BY AN ACCOUNT HOLDER WITH THE BANK. 30. AN ALMOST SIMILAR ISSUE AROSE IN KUMBAKONAM MUTUAL BENEFIT FUND LTD. CASE (SUPRA). THE FACTS IN THAT C ASE WERE THAT THE ASSESSEE, NAMELY, KUMBAKONAM MUTUAL BENEFIT FUN D LTD., WAS AN INCORPORATED COMPANY LIMITED BY SHARES. SINC E 1938, THE NOMINAL CAPITAL OF THE ASSESSEE WAS RS.33,00,000/- DIVIDED INTO SHARES OF RS.1/- EACH. IT CARRIED ON BANKING BUSINE SS RESTRICTED TO ITS SHAREHOLDERS, I.E., THE SHAREHOLDERS HERE EN TITLED TO PARTICIPATE IN ITS VARIOUS RECURRING DEPOSIT SCHEME S OR OBTAIN LOANS ON SECURITY. RECURRING DEPOSITS WERE OBTAINED FROM MEMBERS FOR FIXED AMOUNTS TO BE CONTRIBUTED MONTHLY BY THEM FOR A FIXED NUMBER OF MONTHS AS STIPULATED AT THE E ND OF WHICH A FIXED AMOUNT WAS RETURNED TO THEM ACCORDING TO PUBL ISHED TABLES. THE AMOUNT SO RETURNED, COVERED THE COMPOUN D INTEREST OF THE PERIOD. THESE RECURRING DEPOSITS CONSTITUTED THE MAIN SOURCE OF FUNDS OF THE ASSESSEE FOR ADVANCING LOANS . SUCH LOANS WERE RESTRICTED ONLY TO MEMBERS WHO HAD, HOWE VER, TO OFFER SUBSTANTIAL SECURITY THEREFOR, BY WAY OF EITH ER THE PAID UP VALUE OF THEIR RECURRING DEPOSITS, IF ANY, OR IMMOV ABLE PROPERTIES WITHIN A PARTICULAR DISTRICT. OUT OF THE INTEREST R EALISED BY THE ASSESSEE ON THE LOANS WHICH CONSTITUTED ITS MAIN IN COME, INTEREST ON THE RECURRING DEPOSITS AFORESAID WAS PA ID AS ALSO ALL THE OTHER OUTGOINGS AND EXPENSES OF MANAGEMENT AND THE BALANCE AMOUNT WAS DIVIDED AMONG THE MEMBERS PRO RA TA ACCORDING TO THEIR SHARE-HOLDINGS AFTER MAKING PROV ISION FOR RESERVES, ETC., AS REQUIRED BY THE MEMORANDUM OR AR TICLES AFORESAID. IT WAS NOT NECESSARY FOR THE SHAREHOLDER S, WHO WERE ENTITLED TO PARTICIPATE IN THE PROFITS TO EITHER TA KE LOANS OR MAKE RECURRING DEPOSITS. 31. ON THESE FACTS, AS ALREADY NOTED, THE COURT DISTING UISHED STYLES CASE (SUPRA) AND OPINED THAT THE POSITION OF THE ASSESSEE WAS NO DIFFERENT FROM AN ORDINARY BANK EXCEPT THAT IT LENT MONEY AND RECEIVED DEPOSITS FROM ITS SHAREHOLDERS. THIS D ID NOT BY ITSELF MAKE ITS INCOME ANY LESS INCOME FROM BUSINES S. IN OUR OPINION, THE RATIO OF THE SAID DECISION IS ON ALL F OURS TO THE FACTS AT HAND. THE INTEREST EARNED BY THE ASSESSEE EVEN FROM THE MEMBER BANKS ON THE SURPLUS FUNDS DEPOSITED WITH THEM HAD THE TAINT OF COMMERCIALITY, FATAL TO THE PRINCIPLE OF MUTUALITY. 32. WE MAY ADD THAT THE ASSESSEE IS ALREADY AVAILING TH E BENEFIT OF THE DOCTRINE OF MUTUALITY IN RESPECT OF THE SURPLUS ITA NOS.435&436/VIZAG/2012 & 134/VIZAG/2014 WALTAIR CLUB, VISAKHAPATNAM 11 AMOUNT RECEIVED AS CONTRIBUTIONS OR PRICE FOR SOME OF THE FACILITIES AVAILED BY ITS MEMBERS, BEFORE IT IS DEPOSITED WITH THE BANK. THIS SURPLUS AMOUNT WAS NOT TREATED AS INCOME; SINCE IT WAS THE RESIDUE OF THE COLLECTIONS LEFT BEHIND WITH THE CLU B. A FAGADE OF A CLUB CANNOT BE CONSTRUCTED OVER COMMERCIAL TRANSACT IONS TO AVOID LIABILITY TO TAX. SUCH SETUPS CANNOT BE PERMITTED T O CLAIM DOUBLE BENEFIT OF MUTUALITY. WE FEEL THAT THE PRESENT CASE IS A CLEAR INSTANCE OF WHAT THIS COURT HAD CAUTIONED AGAINST I N BANKIPUR CLUB (SUPRA), WHEN IT SAID: .IF THE OBJECT OF THE ASSESSEE COMPANY CLAIMING TO BE A M UTUAL CONCERN OR CLUB, IS TO CARRY ON A PARTICULAR BUSINESS AND MONEY IS REALIZ ED BOTH FROM THE MEMBERS AND FROM NON-MEMBERS, FOR THE SAME CONSIDERATION BY GIVING T HE SAME OR SIMILAR FACILITIES TO ALL ALIKE IN RESPECT OF THE ONE A ND THE SAME BUSINESS CARRIED ON BY IT, THE DEALINGS AS A WHOLE DISCLOSE THE SAME PROFIT EARNING MOTIVE AND ARE ALIKE TAINTED WITH COMMERCIALITY. IN OTHER WORDS, THE ACTIVITY CAR RIED ON BY THE ASSESSEE IN SUCH CASES, CLAIMING TO BE A MUTUAL CONCERN OR MEMBERS CLUB IS A TRADE OR AN ADVENTURE IN THE NATURE OF TRADE AND THE TRANSACTIONS ENTERED INTO W ITH THE MEMBERS OR NON-MEMBERS ALIKE IS A TRADE/BUSINESS/TRANSACTION AND THE RE SULTANT SURPLUS IS CERTAINLY PROFIT INCOME LIABLE TO TAX. WE SHOULD ALSO STATE, THAT AT WHAT POINT, DOES THE RELATIONSHIP OF MUTUALITY END AND THAT OF TRADING BEGIN IS A D IFFICULT AND VEXED QUESTION. A HOST OF FACTORS MAY HAVE TO BE CONSIDERED TO ARRIVE AT A CONC LUSION. WHETHER OR NOT THE PERSONS DEALING WITH EACH OTHER, IS A MUTUAL CLUB OR CA RRYING ON A TRADING ACTIVITY OR AN ADVENTURE IN THE NATURE OF TRADE IS LARGELY A QUESTION OF FACT [WILCOCKS CASE 9 TAX CASES 111, (132) C.A. (1925) (1) KB 30 AT 44 AND 45]. 33. IN OUR OPINION, UNLIKE THE AFORESAID SURPLUS AMOUNT ITSELF, WHICH IS EXEMPT FROM TAX UNDER THE DOCTRINE OF MUTUALITY, THE AMOUNT OF INTEREST E ARNED BY THE ASSESSEE FROM THE AFORE-NOTED FOUR BANKS WILL NOT FALL WITHIN T HE AMBIT OF THE MUTUALITY PRINCIPLE AND WILL THEREFORE, BE EXIGIBLE TO INCOME-TA X IN THE HANDS OF THE ASSESSEE-CLUB. 34. IN LIGHT OF THE AFORE-GOING DISCUSSION, THESE APPEALS ARE BEREF T OF ANY MERIT AND ARE THUS, LIABLE TO BE DISMISSED. ACCORDINGLY, WE DISMISS A LL THE APPEALS WITH COSTS. 11. IN THE PRESENT CASE, THE ASSESSEE CLUB IS HAVIN G SURPLUS FUNDS AND THE SAME WAS DEPOSITED WITH THE BANK AND RECEIVED T HE INTEREST. THEREFORE, THE RELATIONSHIP BETWEEN THE ASSESSEE AN D THE BANK IS JUST LIKE ANY OTHER CUSTOMER AND BANK, HENCE, THE PRINCI PLES OF MUTUALITY NO APPLICATION. THE HONBLE JURISDICTIONAL HIGH COURT OF ANDHRA PRADESH IN ITA NOS.435&436/VIZAG/2012 & 134/VIZAG/2014 WALTAIR CLUB, VISAKHAPATNAM 12 THE CASE OF CIT VS. SECUNDERABAD CLUB (2012) 254 C TR 163 HAS CONSIDERED THE CLUB OF THE PRINCIPLES OF MUTUALITY AND THE HEAD NOTE OF THE JUDGEMENT OF THE HONBLE A.P. HIGH COURT IS EXT RACTED FOR THE SAKE OF CONVENIENCE AS UNDER: INCOME INTEREST INCOME EARNED FROM DEPOSITS PRINCIPLE OF MUTUALITY APPLICABILITY ASSESSEE, A SOCIAL CLUB NOT REGISTERED AS ASSOCIATION OR SOCIETY, KEPT ITS SURPLUS FUND IN FIXED DEPOSITS IN BANKS, WHICH WERE CORPORATE MEMBE R OF ASSESSEE-CLUBASSESSEE SOUGHT TAX EXEMPTION ON INTE REST RECEIVED CITING PRINCIPLE OF MUTUALITY-APPELLATE CO MMISSIONER HELD THAT PRINCIPLE OF MUTUALITY CANNOT BE APPLIED TO INTEREST INCOME DERIVED FROM INVESTMENTS-HOWEVER, APPELLATE TRIBUNAL DELETED ADDITIONS MADE BY ASSESSING OFFICER AS CONF IRMED BY THE CIT(A)HELD, PRINCIPLE OF MUTUALITY ENDS THE MO MENT THE CLUB DEPOSITS THE AMOUNT WITH THE SOLE AIM OF EARNI NG INTEREST ON THE DEPOSITSSOCIAL RELATIONSHIP AND SOCIAL ACTI VITIES OF CLUB HAVE NOTHING TO DO WITH ITS DEPOSITS WITH CORPORATE MEMBERS NATURE OF TRANSACTION BETWEEN ASSESSEE AND BANK/BAN KS DISQUALIFIES APPLICATION OF PRINCIPLE OF MUTUALITY HENCE, INTEREST INCOME EARNED FROM DEPOSITS KEPT WITH BANKS/FINANCI AL INSTITUTIONS IS TAXABLE RECEIPTIMPUGNED ORDER SET ASIDE APPEALS ALLOWED. 12. SO FAR AS THE OTHER ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE WITH REGARD TO ARTICLES OF ASSOCIATION IS CONCERNED , THE ARTICLES OF ASSOCIATION, IN OUR OPINION NEITHER SACROSANCT NOR TRANSCENDENTAL. IT IS SUBJECT TO PRINCIPLES OF MUTUALITY. ONCE THE ARTIC LES OF ASSOCIATION HAMPERS THE PRINCIPLES OF MUTUALITY, THE ASSESSEE C LUB IS NOT ENTITLED TO CLAIM BENEFIT ON THE SAME PRINCIPLE. ITA NOS.435&436/VIZAG/2012 & 134/VIZAG/2014 WALTAIR CLUB, VISAKHAPATNAM 13 13. SO FAR AS CASE LAWS RELIED BY THE LD. COUNSEL F OR THE ASSESSEE IS CONCERNED IN THE CASE OF CANARA BANK GOLDEN JUBILEE STAFF WELFARE FUND (SUPRA), STANDING CONFERENCE OF PUBLIC ENTERPRISES (SUPRA) THAT THE SIMPLE DISMISSAL OF SLP BY HONBLE SUPREME COURT NE ITHER AMOUNTING TO LAID DOWN RATIO DISCIDENDI NOR DISTURBED THE PRINCI PLES ALREADY LAID DOWN BY THE HONBLE SUPREME COURT. HOWEVER, THE HONBLE SUPREME COURT IN THE CASE OF BANGALORE CLUB (SUPRA) IS A LATEST JUDG EMENT AND HAS CONSIDERED THE ENTIRE CONCEPT OF THE PRINCIPLES OF MUTUALITY AND HELD THAT INTEREST EARNED BY THE ASSESSEE FROM THE BANK DEPOS ITS WILL NOT FALL WITHIN THE AMBIT OF MUTUALITY PRINCIPLE. THEREFORE , IT IS EXIGIBLE TO INCOME TAX IN THE HANDS OF THE ASSESSEES CLUB. TH E ANOTHER ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE FACTS OF THE PRESENT CASE ARE DIFFERENT FROM THE FACTS IN BANGALORE CLUB CASE (SU PRA). ACCORDING TO THE LD. COUNSEL FOR THE ASSESSEE IN THE CASE OF BAN GALORE CLUB, THE ASSESSEE HAS DEPOSITED SURPLUS FUNDS WITH THE BANK WHICH IS ALSO A MEMBER OF THE CLUB. IN THE PRESENT CASE, THE ASSES SEE HAS DEPOSITED FUNDS WITH THE BANKS WHICH ARE NOT THE MEMBERS OF T HE ASSESSEES CLUB. WE FIND THAT THE AMOUNT DEPOSITED BY THE ASSESSEE CL UB WITH THE BANK WHICH IS ALSO A MEMBER AND WHICH IS ALSO NOT A MEMB ER DOES NOT MAKE ANY DIFFERENCE. THE RATIO DISCIDENDI LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF BANGALORE CLUB (SUPRA) SQUAREL Y APPLIES TO THE FACTS ITA NOS.435&436/VIZAG/2012 & 134/VIZAG/2014 WALTAIR CLUB, VISAKHAPATNAM 14 OF THE PRESENT CASE. THE HONBLE JURISDICTIONAL HI GH COURTS ALSO HAS CONSIDERED THE SCOPE OF THE PRINCIPLES OF MUTUALITY AND HELD THAT PRINCIPLES OF MUTUALITY ENDS THE MOMENT CLUB DEPOS ITS THE AMOUNT WITH THE SOLE AIM OF EARNING INTEREST ON THE DEPOSITS. 14. WE THEREFORE RESPECTFULLY FOLLOWING THE DOCTRINE OF PRECEDENT AS PER ARTICLE 141 OF THE CONSTITUTION OF INDIA, BY FO LLOWING THE RATIO LAID DOWN BY THE SUPREME COURT IN THE CASE OF BANGALORE CLUB (SUPRA) AND ALSO JURISDICTIONAL HIGH COURT IN THE CASE OF SECUN DERABAD CLUB (SUPRA), REVERSE THE ORDER PASSED BY THE COMMISSIONER AND UP HOLD THE ORDER OF THE A.O. 15. SO FAR AS ITA 134 OF 2014 FOR THE ASSESSMENT YE AR 2009-10 IS CONCERNED THE ASSESSEE HAS QUESTIONED THE REOPENING . THE FACTS ARE IN BRIEF THAT FOR THE ASSESSMENT YEAR UNDER CONSIDERAT ION, THE ASSESSEE FILED RETURN OF INCOME BY DECLARING TOTAL INCOME OF RS.5,11,070/-. THE RETURN FILED BY THE ASSESSEE WAS PASSED U/S 143(1) OF THE ACT, THEREAFTER AO HAS REOPENED THE ASSESSMENT BY ISSUING NOTICE U/ S 148 OF THE ACT. THE ASSESSMENT WAS COMPLETED U/S 143 R.W.S 147 OF T HE ACT. FOR THE REASON OF REOPENING, THE AO HAS OBSERVED WHICH IS E XTRACTED AS UNDER:- ON VERIFICATION OF THE CASE RECORD, IT IS FOUND TH AT THE ASSESSEE RECEIVED AN AMOUNT OF RS.60,05,705/- AS IN TEREST ON FDRS FROM DIFFERENT BANKS DURING THE FINANCIAL YEAR 2008-09 ITA NOS.435&436/VIZAG/2012 & 134/VIZAG/2014 WALTAIR CLUB, VISAKHAPATNAM 15 RELEVANT TO THE A.Y. 2009-10, AND CLAIMED THE EXEMP TION OF THIS INTEREST INCOME ON THE PRINCIPLE OF MUTUALITY, WHIC H IS NOT ALLOWABLE. HENCE, NOTICE U/S 148 WAS ISSUED ON 24. 6.2011 AND THE SAME WAS DULY SERVED ON THE ASSESSEE. IN RESPO NSE THE ASSESSEE FILED A LETTER DATED 12.7.2011 STATING THA T THE ORIGINAL RETURN OF INCOME FILED ON 24.9.2009 MAY PLEASE BE T REATED AS THE RETURN FILED AGAINST NOTICE U/S 148 OF THE I.T. ACT. ACCORDINGLY, THE NOTICES U/S 143(2) AND 142(1) WERE ISSUED AND THE SAME WERE DULY SERVED ON THE ASSESSEE. THEREAF TER, AS THERE IS A CHANGE IN INCUMBENT OFFICER, A FRESH NOT ICES U/S 143(2) AND 142(1) WERE ISSUED. IN RESPONSE TO THE NOTICES ISSUED, SRI D.L.S.V. RAMANA BABU, CA, AUTHORISED REPRESENTATIVE OF THE ASSESSEE APPEARED FROM TIME T O TIME AND THE CASE WAS HEARD. THE A.R. OF THE ASSESSEE HAS F URNISHED THE INFORMATION AS CALLED FOR. UPON VERIFICATION O F THE INFORMATION SUBMITTED BY THE ASSESSEES A.R. AND TH E RETURN OF INCOME ALONG WITH ACCOMPANYING DOCUMENTS, THE ASSES SMENT IS COMPLETED AS UNDER: 16. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT ORIGINALLY THE ASSESSMENT WAS COMPLETED U/S 143(1) OF THE ACT. THEREAFTER ON THE BASIS OF SAME INFORMATION WITHOUT ANY MATERIAL, A.O. HAS REOPENED THE ASSESSMENT. THEREFORE, IT IS NOT VALID. FOR THAT HE RELIED ON THE JUDGEMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ORIENT CRAFT LIMITED 215 TAXMAN 28 AND SUBMITTE D THAT THE REOPENING IS NOT VALID. 17. ON THE OTHER HAND THE LD. D.R. HAS SUBMITTED TH AT ORIGINALLY THE RETURN FILED WAS U/S 143(1) OF THE ACT AND IT IS ON LY MERE PROCESS DONE BY THE ASSESSING OFFICER. THEREFORE THERE IS NO CH ANGE OF OPINION AND ITA NOS.435&436/VIZAG/2012 & 134/VIZAG/2014 WALTAIR CLUB, VISAKHAPATNAM 16 THE ASSESSING OFFICER AFTER KNOWING THAT THE ASSESS EE HAS NOT OFFERED THE INTEREST INCOME, THE ASSESSMENT WAS REOPENED AND AS SESSMENT WAS COMPLETED ACCORDING TO THE LAW AND SUBMITTED THAT T HE CASE LAW RELIED BY THE LD. COUNSEL FOR THE ASSESSEE I.E. CIT VS. OR IENT CRAFT LTD. (SUPRA) NO APPLICATION AND AS PER THE JUDGEMENT OF THE HON BLE SUPREME COURT IN THE CASE OF ACIT VS. RAJESH JAVERI STOCK BROKERS 291 ITR 500 (BOM) RETURN PROCESSED U/S 143(1) OF THE ACT IS A MERE PR OCESS AND NOT AN ASSESSMENT AND WHATEVER MAY BE THE REASONS, REOPENI NG CAN BE DONE. 18. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE RECO RDS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FI ND THAT IN THE PRESENT CASE, ASSESSMENT WAS COMPLETED U/S 143(1) OF THE AC T. THEREAFTER, AO CAME TO KNOW THAT THE ASSESSEE HAS NOT OFFERED INTE REST INCOME FOR TAXATION AND AFTER ISSUING A NOTICE, THE INTEREST I NCOME EARNED BY THE ASSESSEE WAS BROUGHT TO TAX. WE FIND THAT THERE IS A TANGIBLE MATERIAL CAME TO THE NOTICE OF THE AO. ACCORDINGLY THE NOTI CE U/S 148 OF THE ACT WAS ISSUED. SO FAR AS CASE LAW RELIED BY THE LD. C OUNSEL FOR THE ASSESSEE IN THE CASE OF CIT VS. ORIENT CRAFT LTD. ( SUPRA), THE HONBLE DELHI HIGH COURT HAS OBSERVED THAT THERE IS NO WHIS PER IN THE REASONS RECORDED THAT SOME TANGIBLE MATERIAL HAS COME TO TH E NOTICE OF THE AO AND ACCORDINGLY HELD THAT RE-OPENING WAS NOT VALID. IN THE PRESENT CASE, ITA NOS.435&436/VIZAG/2012 & 134/VIZAG/2014 WALTAIR CLUB, VISAKHAPATNAM 17 THE AO HAS RECORDED THAT ASSESSEE HAS RECEIVED AN A MOUNT OF RS.60,05,705/- AS AN INTEREST ON FDR FROM DIFFERENT BANKS DURING THE FINANCIAL YEAR 2008-09 AND CLAIMED THE SAME AS EXEM PTION ON THE PRINCIPLES OF MUTUALITY. BASED ON THAT INFORMATION , THE AO HAS REOPENED THE ASSESSMENT. IN OUR OPINION, THERE IS A TANGIBL E MATERIAL AVAILABLE TO THE ASSESSEE FOR REOPENING. THEREFORE, THE ABOVE C ASE LAW HAS NO APPLICATION. IN THE PRESENT CASE, THE ASSESSING OFF ICER BY RECORDING THE REASONS ASSESSMENT WAS REOPENED. WE FIND THAT THE A SSESSING OFFICER CORRECTLY REOPENED THE ASSESSMENT. 19. THUS THE GROUND RAISED BY THE ASSESSEE ON REOPE NING WAS DISMISSED. 20. SO FAR AS MERITS OF THE CASE ON THE PRINCIPLES OF MUTUALITY IS CONCERNED, THE LD. CIT(A) BY CORRECTLY FOLLOWING RE CENT JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF BANGALORE CLUB (SUPRA) CONFIRMED THE ORDER OF THE A.O. WE FIND NO INFIRMITY IN THE O RDER PASSED BY THE LD. CIT(A). THIS GROUND OF APPEAL RAISED ON MERITS IS DISMISSED. 21. SO FAR AS ALTERNATIVE GROUND RAISED BY THE ASSE SSEE IN RESPECT OF PROPORTIONATE EXPENSES RELATING TO THE IMPUGNED FIX ED DEPOSITS INTEREST IS CONCERNED, THE LD. CIT(A) HAS CONSIDERED AND ALL OWED @ 2%. THE ASSESSEE HAS PRAYED THAT THE PROPORTIONATE EXPENDIT URE TO THE EXTENT OF ITA NOS.435&436/VIZAG/2012 & 134/VIZAG/2014 WALTAIR CLUB, VISAKHAPATNAM 18 @10% HAS TO BE ALLOWED. WE FIND THAT THE PROPORTION ATE EXPENDITURE ALLOWED BY LD. CIT(A) @ 2% IS REASONABLE, FAIR AND JUSTIFIED AND NO INTERFERENCE IS CALLED FOR AND DISMISSED. 22. IN THE RESULT, THE APPEALS FILED BY THE REVENUE IN ITA NOS.435 & 436/VIZAG/2012 FOR THE A.YS 2007-08 & 2008-09 ARE ALLOWED AND APPEAL FILED BY THE ASSESSEE IN ITA NO.134/VIZAG/20 14 FOR A.Y. 2009-10 IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 6 TH NOV15. SD/- SD/- ( (( ( . . . . ) ( ) ( ) ( ) ( . .. . ) )) ) ( (( ( G. MANJUNATHA) ( (( ( V. DURGA RAO ) )) ) / // / ACCOUNTANT MEMBER / // / JUDICIAL MEMBER /VISAKHAPATNAM: 6 / DATED : 6.11.2015 VG/SPS / - 7 / COPY OF THE ORDER FORWARDED TO :8 1. , / THE APPELLANT THE ACIT, CIRCLE-4(1), VISAKHAPATNAM 2. -., / THE RESPONDENT M/S. WALTAIR CLUB, D.NO.10-50-20, WALTAIR UPLANDS, OPP. GOVERNORS BUNGALOW, SIRIPURAM, VISAKHAPATNAM. 3. : () / THE CIT-2, VISAKHAPATNAM 4. : / THE CIT (A), VISAKHPATNAM 5. -, , / // / DR, ITAT, VISAKHAPATNAM 6 . . . . / GUARD FILE / BY ORDER // TRUE COPY // @A ( SR.PRIVATE SECRETARY ) , / // / ITAT, VISAKHAPATNAM