M/s. Madras Cricket Club, CHENNAI V. ACIT, CHENNAI

ITA 1668/CHNY/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5125 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 04-05-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 07-10-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D ANAND
• Assessee Lawyers: ANIRUDH RAI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCH D BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NOS. 1668 & 1669 /MDS/2010 ASSESSMENT YEARS : 2005-06 & 2007-08 M/S. MADRAS CRICKET CLUB, NO.1, BELLS ROAD, CHENNAI 600 005. PAN AACCM 6390 E VS. THE ASST. COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE-IV(1), CHENNAI 34. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANIRUDH RAI, CIT, DR RESPONDENT BY : SHRI D. ANAND O R D E R PER DR. O.K.NARAYANAN, VICE PRESIDENT THESE TWO APPEALS ARE FILED BY THE ASSESSEE FOR TH E ASSESSMENT YEARS 2005-06 AND 2007-08. THESE APPEAL S ARE DIRECTED AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-V, AT CHENNAI BOTH DATED 28.7.2010. THE APPEALS ARISE OUT OF THE ASSESSMENTS COMPLETED UNDER SEC.1 43[3] OF THE INCOME-TAX ACT, 1961. ITA 1668 & 1669/10 :- 2 -: 2. THE COMMON GROUND RAISED IN THESE TWO APPEALS IS THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN H OLDING THAT THE ASSESSEE CLUB IS LIABLE FOR INCOME-TAX ON ITS I NTEREST INCOME, IN SPITE OF HIS FINDING THAT THE ASSESSEE CLUB IS A MUTUAL ASSOCIATION AND ALL THE SOURCES AVAILABLE AT ITS DI SPOSAL ARE GENERATED FROM THE CONTRIBUTIONS OF ITS OWN MEMBERS . 3. WE HEARD BOTH SIDES IN DETAIL. 3. THE HON'BLE HIGH COURT OF MADRAS HAD AN OCCASION TO CONSIDER THE VERY SAME ISSUE IN THE CASE OF COMMISS IONER OF INCOME-TAX V. WELLINGTON GYMKHANA CLUB (2010) 46 D TR (MAD) 22. THE COURT HELD THAT THE INCOME OF THE ASSESSEE BY WAY OF INTEREST ON INVESTMENTS WITH BANKS IS NOT EXEMPT FR OM TAX ON THE PRINCIPLE OF MUTUALITY EVEN IF THE CONCERNED BANKS ARE MEMBERS OF THE CLUB. THE HON'BLE HIGH COURT HAS UPHELD THE VIE W THAT THE INTEREST INCOME ARISING TO THE ASSESSEE CLUB FROM B ANK DEPOSITS AND INVESTMENTS WOULD NOT BE EXEMPT FROM TAX ON THE GROUND OF MUTUALITY. THEREFORE, IN THE FACTS AND CIRCUMSTANC ES OF THE CASE, WE HOLD THAT THESE TWO APPEALS ARE LIABLE TO BE DIS MISSED. ITA 1668 & 1669/10 :- 3 -: ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON WEDNESDAY, THE 4 TH DAY OF MAY, 2011 AT CHENNAI. SD/- SD/- (GEORGE MATHAN) JUDICIAL MEMBER (DR. O.K.NARAYANAN) VICE-PRESIDENT CHENNAI, DATED : 4 TH MAY, 2011 MPO* COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR