ITO, Jaipur V. JAIPUR CLUB LTD., Jaipur

ITA 166/JPR/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5172 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 03-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: N S VYAS CA DHK

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 166/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 THE ITO WARD- 2(3)M JAIPUR CUKE VS. M/S. JAIPUR CLUB LTD. JACOB ROAD, CIVIL LINES, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAAAJ 1464 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA, ADDL CIT-DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI N.S. VYAS,CA LQUOKBZ DH RKJH[K@ DATE OF HEARING : 30/06/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 30/06/2016 VKNS'K@ ORDER PER R.P. TOLANI, JM THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A),-1 JAIPUR DATED 09-12-2013 FOR THE ASSESSME NT YEAR 2009-10 RAISING THEREIN SOLITARY GROUND AS UNDER:- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING IN COME RECEIVED BY THE CLUB FOR NON-MEMBERS FOR PROVIDING SPECIFIED FACILITIES WHEREAS THE PRINCIPLE OF MUTUA LITY WAS NOT FOUND APPLICABLE IN RESPECT OF THESE SERVICES. ITA NO.166/JP/2014 THE ITO, WARD- 2(3), JAIPUR VS. M/S. JAIPUR CLUB LT D. JAIPUR . 2 2.1 AT THE OUTSET OF THE HEARING, THE LD. AR OF THE ASSESSEE PRAYED THAT SIMILAR ISSUE HAD ALREADY BEEN DECIDED AGAINST THE REVENUE BY THE ITAT COORDINATE BENCH IN THE CASE OF THE ASSESSEE VIDE ITS ORDERS DATED 01-01- 2016 (ITA NOS. 592 & 418/JP/2013) AND DATED 19-02-2 016 (ITA NO. 764/JP/2014). 2.2 DURING THE COURSE OF HEARING, LD. DR RELIED ON THE ORDER OF THE LD. CIT(A) BUT HE COULD NOT CONTROVERT THE SUBMISSIONS OF THE ASSESSEE. 2.3 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT EMERGES FROM THE RECORD THA T ON SIMILAR ISSUE THE ITAT COORDINATE BENCH HAS DECIDED THE CASE AGAINST THE REVENUE. FOR THE SAKE OF CONVENIENCE, THE CONCLUSION OF THE COOR DINATE BENCH ON THIS ISSUE VIDE ITS ORDER DATED 01-01-2016 (ITA NO. 592 & 418/JP/2013 FOR THE ASSESSMENT YEARS 2007-08 & 2008-09) IS REPRODUC ED AS UNDER.- 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH TH E PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE R ECORD. THE ASSESSEE HAS NOT ISSUED ANY BILL IN THE NAME OF OUT SIDER. IF ANY SERVICE HAS BEEN PROVIDED TO THE GUEST BY THE CLUB, THE BILLS HAS BEEN ISSUED IN THE NAME OF MEMBERS ONLY. THE LD ASS ESSING OFFICER HAD NOT SPECIFICALLY POINTED OUT THE RECEIPTS RECEI VED FROM NON MEMBERS. HE SIMPLY MADE DISALLOWANCE ON ESTIMATE BA SIS. THE ASSESSEE HAS PRODUCED COMPLETE BOOKS OF ACCOUNT DUR ING THE ASSESSMENT PROCEEDINGS. THEREFORE, PRINCIPLE LAID D OWN BY THE HON'BLE SUPREME COURT IN THE CASE OF BANKIPUR CLUB LIMITED ITA NO.166/JP/2014 THE ITO, WARD- 2(3), JAIPUR VS. M/S. JAIPUR CLUB LT D. JAIPUR . 3 (SUPRA) IS SQUARELY APPLICABLE ON PRINCIPLE OF MUTU ALITY WHEREIN IT HAS BEEN HELD THAT IN ANY MUTUAL ORGANIZATION, THE RE IS AN ELEMENT OF ALTRUISM, SINCE THE BENEFIT AVAILED BY A MEMBER MAY NOT ALWAYS BE COMMENSURATE WITH HIS CONTRIBUTION. IT WAS FOR T HIS REASON THAT EVEN WHERE THERE IS NO RETURN ON THE CONTRIBUTION, AS IN THE CASE OF AN ASSOCIATION FORMED FOR THE PURPOSE OF GENERAL PU BLIC UTILITY, MUTUALITY MAY NOT BE LOST. THE FULL BENCH OF THE H ONBLE PATNA HIGH COURT IN THE CASE OF CIT VS. RANCHI CLUB LTD. (SUPRA) HAS ALSO HELD THAT MERELY BECAUSE THE ASSESSEE COMPANY HAD ENTERED INTO TRANSACTIONS WITH NON MEMBERS AND EARNED PROFI TS OUT OF TRANSACTIONS HELD WITH THEM ITS RIGHT TO CLAIM EXEM PTION ON THE PRINCIPLE OF MUTUALITY IN RESPECT OF TRANSACTIONS H ELD BY IT WITH ITS MEMBERS WAS NOT LOST. THE ASSESSEE WAS A MUTUAL CON CERN, THE INCOME DERIVED BY IT FROM ITS HOUSE PROPERTY LET TO ITS MEMBERS AND THEIR GUESTS AND FROM THE SALE OF LIQUOR ETC. TO IT S MEMBERS AND THEIR GUESTS WAS NOT TAXABLE IN ITS HANDS. THE ABO VE PRINCIPLE IS SQUARELY APPLICABLE IN THE CASE OF ASSESSEE, THEREF ORE, WE UPHOLD THE ORDER OF THE LD CIT(A) FOR BOTH THE ASSESSMENT YEARS. 2.4 RESPECTFULLY FOLLOWING THE DECISION OF COORDINA TE BENCH IN THE CASE OF ITO VS. M/S. JAIPUR CLUB LTD. (ITA NOS. 592 & 418/JP/2013) FOR THE ASSESSMENT YEARS 2007-08 AND 2008-09, I FIND N O REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) ON THE ISSUE IN QU ESTION. THUS THE SOLITARY GROUND RAISED BY THE REVENUE IS DISMISSED. ITA NO.166/JP/2014 THE ITO, WARD- 2(3), JAIPUR VS. M/S. JAIPUR CLUB LT D. JAIPUR . 4 3.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED PRONOUNCED IN THE OPEN COURT ON 30 -06-2016. SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30/06/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ITO, WARD- 2(3), JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- M/S. JAIPUR CLUB LTD. , JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 166/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR