NATVAR PARIKH & CO. P.LTD, MUMBAI V. CIT CEN IV, MUMBAI

ITA 2082/MUM/2015

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3179 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 09-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MICHAEL JERALD
• Keywords: Capital asset; Depreciation; Business expenditure; Earning of tax free income; Wholly owned subsidiary; Competent authority; Capital receipt; Revenue expenditure; Capital expenditure; Rule 8D
• Section: 142(1); 14A; 40(a)(ia); 143(2); 40a(ia); 13

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL A BENCH MUMBAI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.2082/MUM/2015 (ASSESSMENT YEAR 2010-11) ITA NO.5034/MUM/2016 (ASSESSMENT YEAR 2012-13) ITA NO.1400/MUM/2017 (ASSESSMENT YEAR 2013-14) ITA NO.7521/MUM/2019 (ASSESSMENT YEAR 2014-15) ITA NO.7522/MUM/2019 (ASSESSMENT YEAR 2015-16) APURVA NATVAR PARIKH & CO. PVT. LTD., 96, CHEMBUR MANKHURD LINK ROAD, SHIVAJI NAGAR, MUMBAI-400043 P AN: AAACN2937Q VS. DCIT, CC 7(1), ROOM NO. 653, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020. APPELLANT RESPONDENT ITA NO.2708/MUM/2015 (ASSESSMENT YEAR 2010-11) ITA NO.5854/MUM/2015 (ASSESSMENT YEAR 2011-12) DCIT, CC 7(1), ROOM NO. 653, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020. VS. APURVA NATVAR PARIKH & CO. PVT. LTD., 96, CHEMBUR MANKHURD LINK ROAD, SHIVAJI NAGAR, MUMBAI- 400043 P AN: AAACN2937Q APPELLANT RESPONDENT APPELLANT BY : SHRI MADHUR AGARWAL (AR) RESPONDENT BY : SHRI MICHAEL JERALD (DR) DATE OF HEARING : 28.01.2020 DATE OF PRONOUNCEMEN T : 25.02.2020 ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THESE GROUP OF SEVEN APPEAL ARE DIRECTED AGAINST TH E SEPARATE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-49, MUMBAI [TH E LD. CIT(A)] FOR ITA NO. 2082 MUM 2015 & ORS - APURVA NATVAR PARIKH & CO. PV T. LTD. 2 ASSESSMENT YEAR 2010-11, 2011-12, 2013-14, 2014-15 & 2015-16, OUT OF WHICH TWO CROSS APPEAL BY BOTH THE PARTIES FOR ASSE SSMENT YEAR 2010-11 & 2011-12 AND FOR ASSESSMENT YEAR 2013-14, 2014-15 & 2015-16 BY ASSESSEE. IN ALL APPEAL, THE PARTIES HAVE RAISED CE RTAIN COMMON GROUNDS OF APPEAL, THEREFORE, ALL THE APPEALS WERE CLUBBED, HE ARD TOGETHER AND ARE DECIDED BY CONSOLIDATED ORDER FOR THE SAKE OF BREVI TY AND TO AVOID THE CONFLICTING DECISION. WITH THE CONSENT OF PARTIES, THE FACT IN APPEAL FOR ASSESSMENT YEAR 2010-11 IS TREATED AS LEAD CASE. TH E ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED (IT (A) -MUMBAI 49 HAS ERRED IN CONFIRM ING THE DISALLOWANCE OF RS. 1,11,30,167/- ON ACCOUNT OF AMORTIZATION OF THE ADDITIONAL PREMIUM PAID ON THE LEASEHOLD LAND. THE APPELLANT SUBMITS THAT T HE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE CLAIM MADE WAS FOR ITS LEGITIMA TE BUSINESS EXPENDITURE AND OUGHT TO HAVE BEEN ALLOWED. 2. THE LEARNED (IT (A) HAS ERRED IN CONFIRMING THE PAR T ADDITION UNDER SECTION 14A OF THE INCOME TAX ACT AFTER ALLOWING PRORATA RE LIEF ON ACCOUNT OF INVESTMENT MADE IN LIFT & SHIFT INDIA PVT. LTD. 3. THE (CIT (A) HAS ERRED IN CONFIRMING THE ADDITION O F RS. 1,20,54, 127/ - UNDER SECTION 40(A)(IA) OF THE INCOME TAX ACT TOWARDS AMO UNT PAID TO SAIKRUPA FOODS SERVICES PVT. LTD. 4. THE LEARNED (CIT(A)-MUMBAI 49 HAS ERRED IN CONFIRMI NG THE DISALLOWANCE OF RS. 8,20,356/- ON ACCOUNT OF PROFESSIONAL CHARGES P AID TO MR. BHAGWAN MADHHA. 5. THE APPELLANT CRAVES LEAVE TO ALTER, AMEND OR ADD A NY GROUNDS OF APPEAL AS MAY BE NECESSARY. RELIEF CLAIMED: 1. THE DISALLOWANCE OF RS. 1,11,30,167/- ON ACCOUNT OF AMORTIZATION OF THE ADDITIONAL PREMIUM LAID ON THE LEASEHOLD LAND BE DE LETED. 2. THE ADDITION MADE OF UNDER SECTION 14A OF THE INCOM E TAX ACT BE DELETED. ITA NO. 2082 MUM 2015 & ORS - APURVA NATVAR PARIKH & CO. PV T. LTD. 3 3. THE ADDITION OF RS. 1,20,54,127 UNDER SECTION 40(A) (IA) OF THE INCOME TAX ACT BE DELETED. 4. THE DISALLOWANCE OF RS. 8,20,356/- ON ACCOUNT OF PR OFESSIONAL CHARGES BE DELETED. 2. THE REVENUE IN ITS CROSS APPEAL (ITA NO. 2708/MUM/2 015) HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF THE C ASE AND IN LAW LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE ON ACCO UNT OF NON REFUNDABLE ONE TIME ENTRANCE FEES COLLECTED BY THE COMPANY FROM ME MBERS TREATING IT AS CAPITAL RECEIPT, PLACING RELIANCE ON THE CASE OF DI NERS BUSINESS SERVICES P LTD. WITHOUT APPRECIATING THE FACT THAT THE FACTS OF THI S CASE ARE DISTINGUISHABLE FROM THAT OF DINERS BUSINESS SERVICES P. LTD. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE CONSTRUCTION ACTIVITY, RUNNING ACERS CLUB, TRANSPOR TATION ETC, FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2020-11 DECLARING INC OME OF RS. 5,53,88,980/-. THE CASE WAS SELECTED FOR SCRUTINY. THE ASSESSING OFFICER AFTER SERVING STATUTORY NOTICE UNDER SECTION 143(2) AND 142(1) COMPLETED THE ASSESSMENT ON 30.03.2013. THE ASSESSING OFFICER WHI LE PASSING THE ASSESSMENT ORDER MADE ADDITION OF RS. 1,11,30,167/- CLAIMED ON ACCOUNT OF AMORTIZATION OF LEASE PREMIUM, DISALLOWANCE UNDER S ECTION 14A OF RS. 11,09,292/-. DISALLOWANCE UNDER SECTION 40A(IA) OF RS. 1,20,54,127/-. ADDITION ON ACCOUNT OF MEMBERSHIP FEES OF RS. 3,11, 78,438/-. ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE WAS GRANTED PAR TIAL RELIEF ON ACCOUNT OF ADDITION MADE ON NON-REFUNDABLE ONE TIME ENTRANCE F EES. THEREFORE, AGGRIEVED BY THE ADDITIONS/DELETING THE ADDITION ON ACCOUNT OF NON- REFUNDABLE ONE TIME ENTRANCE FEES, BOTH THE PARTIES HAVE FILED THEIR ITA NO. 2082 MUM 2015 & ORS - APURVA NATVAR PARIKH & CO. PV T. LTD. 4 RESPECTIVE APPEAL BY RAISING THE GROUNDS OF APPEAL WHICH WE HAVE REFERRED ABOVE. 4. WE HAVE HEARD THE SUBMISSION OF LD. AUTHORIZED REPR ESENTATIVE (AR) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) F OR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ITA NO. 2708/MUM/2015 FOR A.Y. 2010-11 BY REVENUE 5. AT THE OUTSET OF HEARING, THE LD. AR OF THE ASSESSE E SUBMITS THAT GROUND OF APPEAL RAISED BY REVENUE IN ITS APPEAL IS COVERED B Y THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2006-07 TO 2008-09 IN ITA NO. 2146 & 2148/MUM/2009 & 2283/MUM/2011 DATED 20.11.20 15. THE LD. AR OF THE ASSESSEE FURTHER SUBMITS THAT ON SIMILAR GRO UND OF APPEAL, THE TRIBUNAL DIRECTED THE ASSESSING OFFICER TO AX 1/25 TH SHARE OF CLUB ENTRANCE FEES IN EACH YEAR. 6. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUBMI TS THAT SIMILAR DIRECTION MAY BE GIVEN TO THE ASSESSING OFFICER. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE NOTED THAT DU RING THE YEAR, THE ASSESSEE RECEIVED ONE TIME MEMBERSHIP ENTRANCE FEES OF RS. 3.11 CRORE (APPROX) AS ONE TIME MEMBERSHIP FEES FOR LIFE TIME MEMBERSHIP OF CLUB (15 YEARS). THE ASSESSING OFFICER TREATED THE SAID RECE IPT AS REVENUE RECEIPT AGAINST THE ASSESSEES TREATMENT FOR TREATING IT AS A CAPITAL RECEIPT. WE HAVE NOTED THAT ON SIMILAR GROUND OF APPEAL, THE CO-ORDI NATE BENCH OF TRIBUNAL IN ITA NO. 2082 MUM 2015 & ORS - APURVA NATVAR PARIKH & CO. PV T. LTD. 5 ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2006-07 TO 2008-09 ON SIMILAR SET OF FACT PASSED THE FOLLOWING ORDER: 8. WE HAVE CONSIDERED RIVAL CONTENTIONS AND ALSO DE LIBERATED ON JUDICIAL PRONOUNCEMENTS CITED AT BAR IN THE CONTEXT OF FACTU AL MATRIX OF THE CASE. FROM THE RECORD WE FOUND THAT THE AO HAS TAXED ENTIRE EN TRANCE FEE FOR GIVING MEMBERSHIP OF CLUB FOR 25 YEARS, IN THE YEAR OF REC EIPT ITSELF. AS PER LD. AR THE FEE SO RECEIVED WAS CAPITAL IN NATURE AS PER DECISI ON OF DINNERS BUSINESS SERVICES PVT. LTD. 263 ITR 1. WE FOUND THAT IN CASE OF DINNERS BUSINESS SERVICES PVT. LTD (SUPRA) THE MEMBERSHIP SO RECEIVE D WAS FOR WHOLE-LIFE AND NOT FOR SPECIFIED PERIOD OF TIME, WHEREAS IN THE INSTAN T CASE AFTER EXPIRY OF 25 YEARS, MEMBER WAS TO AGAIN PAY ENTRANCE FEE, THEREFORE, FA CTS OF THE INSTANT CASE ARE DISTINGUISHABLE FROM THE CASE OF DINNERS BUSINESS S ERVICES PVT. LTD (SUPRA). IN CASE WHERE ONETIME MEMBERSHIP IS RECEIVED FOR A SPE CIFIED PERIOD OF TIME, THE ISSUE HAS BEEN DEALT BY THE ITAT SPECIAL BENCH IN T HE CASE OF CLUB MAHINDRA HOLIDAYS, 40 DTR 1, WHEREIN AFTER CONSIDERING THE D ECISION OF HON'BLE SUPREME COURT IN THE CASE OF E.D. SASOON, 26 ITR 27, MADRAS INDUSTRIAL CORPORATION LTD., 225 ITR 802, CALCUTTA CO. LTD. 37 ITR 1 AND I N THE CASE OF ROTORK CONTROLS INDIA PVT. LTD., 314 ITR 62, IT WAS HELD T HAT MEMBERSHIP FEE RECEIVED FOR 33/25 YEARS WAS LIABLE TO SPREAD OVER THE PERIO D OF TIME FOR WHICH SUCH FEE IS RECEIVED. RESPECTFULLY FOLLOWING THE SAME, WE DIREC T THE AO TO TAX 1/25 TH SHARE OF FEE IN EACH YEAR, RATHER THAN TAXING THE ENTIRE SUM IN THE YEAR OF RECEIPT ITSELF. 8. CONSIDERING THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE IN EARLIER YEARS AS REFERRED ABOVE. WE DIRECT THE ASSESSING OFFICER TO FOLLOW THE ORDER DATED 20.11.2015 PASSED IN ITA NO. 2146 & 2147/MUM/2009. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISPOSED OF IN THE TERM IN DICATED ABOVE. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS PARTLY ALLOWED. ITA NO. 2082/MUM/2015 FOR A.Y. 2010-11 BY ASSESSEE ITA NO. 2082 MUM 2015 & ORS - APURVA NATVAR PARIKH & CO. PV T. LTD. 6 10. AT THE OUTSET OF HEARING, THE LD. AR OF THE ASSESSE E SUBMITS THAT HE IS NOT PRESSING GROUND NO. 3. CONSIDERING THE SUBMISSION O F LD. AR OF THE ASSESSEE, GROUND NO. 3 OF THE APPEAL IS DISMISSED A S NOT PRESSED. 11. GROUND NO.1 RELATES TO CONFIRMING THE DISALLOWANCE OF RS. 1,11,30,167/- ON ACCOUNT OF AMORTIZATION OF ADDITIONAL PREMIUM PAID ON LEASE HOLD LAND. THE LD. AR OF THE ASSESSEE SUBMITS THAT BESIDES THE BUS INESS OF CONSTRUCTION, THE ASSESSEE MANAGING/RUNNING (THE ACRES CLUBS) ON THE PLOT SITUATED AT THE SURVEY NO. 411B, CHEMBUR. THE SAID PLOT IS OWNED BY NATVAR PARIKH & BROTHERS. THE ASSESSEE OBTAINED THE LEASE OF SAID P LOT FROM OWNER UPTO 02.02.2013. DURING THE PREVIOUS YEAR, THE ASSESSEE PAID COMPENSATION OF RS. 3,33,90,500/- TO THE STATE GOVERNMENT. THE STATE GO VERNMENT DEMANDED THIS COMPENSATION FROM NATVAR PARIKH & BROTHERS FOR RELEASING THE LAND FROM URBAN LAND CEILING AUTHORITY (ULCA). THE ASSES SEE CLAIMED 1/3 RD DEDUCTION PAID ON ACCOUNT OF COMPENSATION BY AMORTI ZING THE LEASE PREMIUM FOR A PERIOD OF THREE YEARS. THE ASSESSING OFFICER TREATED THE LEASED PREMIUM PAID BY ASSESSEE AS CAPITAL EXPENDIT URE. THE ASSESSING OFFICER ALSO CONCLUDED THAT THE COST INCURRED ON LA ND IS ALWAYS CAPITAL IN NATURE UNLESS ASSESSEES ENGAGED IN DEALING IN LAND . FURTHER, NO DEPRECIATION ALLOWABLE ON SUCH COST OF LAND AND THEREFORE, NO QU ESTION FOR ALLOWING AMORTIZATION OF SUCH COST OF LAND. THE LD. AR OF TH E ASSESSEE SUBMITS THAT THE EXPENSES WERE INCURRED FOR BUSINESS PURPOSE AND WAS ADMISSIBLE UNDER SECTION 37. THE UTILITY OF LEASED LAND PREVAILS ON LITTLE LEASE PERIOD. NO NEW ITA NO. 2082 MUM 2015 & ORS - APURVA NATVAR PARIKH & CO. PV T. LTD. 7 ASSET WAS ADDED IN THE BLOCK OF ASSET OF ASSESSEE. THE ASSET WAS ALREADY HELD BY ASSESSEE. THE CASE LAW RELIED BY LOWER AUTHORITI ES IN PANBARI TEA COMPANY LTD. (57 ITR 400) IS NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE. IN SUPPORT OF HIS SUBMISSION, THE LD. AR OF T HE ASSESSEE RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN CASE OF EMPIRE JUTE CO. LTD. [1980] 124 ITR 1 AND ASSOCIATED CEMENT CO. LTD. [1988] 17 2 ITR 257. 12. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPO RTED THE ORDER OF LOWER AUTHORITIES. THE LD. DR SUBMITS THAT THE PAYMENT WA S MADE FOR REALIZATION OF CERTAIN LAND WHICH WAS NOT A PART OF ASSET OF ASSES SEE. THE ASSESSEE IN ITS REPLY DATED 21.12.2012 FILED BEFORE THE ASSESSING O FFICER CLEARLY STATED THAT THE OWNER OF LAND I.E. NATVAR PRIKH & BROTHERS, WHI CH ARE RELATED PARTY MADE AN APPLICATION TO URBAN DEVELOPMENT AUTHORITY (UDA) TO RELEASE THE SURPLUS VACANT LAND FROM ULCA. THE UDA ORDERED FOR PAYMENT OF ADDITIONAL PREMIUM. THUS, IT IS CLEAR FROM THE FACT THAT THE LAND AGAINST WHICH THE ALLEGED PREMIUM WAS PAID WAS NOT A PART O F ASSET OF ASSESSEE. THE CASE LAW RELIED BY LD. AR OF THE ASSESSEE IS NOT AP PLICABLE ON THE FACTS OF THE PRESENT CASE. 13. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE PARTI ES AND PERUSED THE MATERIAL AVAILABLE ON RECORD CAREFULLY. DURING THE ASSESSMENT, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE CLAIMED DEDUCTION F OR AMORTIZATION OF LEASE PREMIUM OF RS. 1,11,30,167/-. THE ASSESSEE WAS ASKE D TO SUBMIT THE DETAILED REGARDING THE CLAIM OF SAID AMORTIZATION O F LEASE PREMIUM. THE ITA NO. 2082 MUM 2015 & ORS - APURVA NATVAR PARIKH & CO. PV T. LTD. 8 ASSESSEE FILED ITS REPLY DATED 21.12.2012. FOR APPR ECIATION OF FACTS THE CONTENTS OF REPLY AS RECORDED BY ASSESSING OFFICER IN PARA-4.2 OF ASSESSMENT ORDER, IS EXTRACTED BELOW: 'THE PLOT OF LAND SITUATED AT SURVEY NO. 411 B, CHE MBUR IS OBTAINED BY US UNDER LEASE FROM M/S. NAVTAR PARIKH & BROS AND IS U SED BY US SINCE 1968FOR OUR BUSINESS PURPOSES. 'THE ACRES CLUB' OUR DIVISION IS CONSTRUCTED ON THIS SAME PLOT. WE ARE ALSO GENERATING 'GO KARTING' INCOME FR OM THIS PLOT OF LAND. THE PRESENT 'LEASE DEED' IS FOR THE PERIOD OF 10 YEARS ENDING ON 02.02.2013 (REFER COPY ENCLOSED AS PART OF 'ANNEXURE 26' OF LETTER DA TED 29.10.2012). THE OWNER M/S NATVAR PARIKH & BROS. HAD MADE AN APP LICATION TO URBAN DEVELOPMENT AUTHORITY TO RELEASE THE SURPLUS VACANT LAND FROM URBAN LAND CEILING AUTHORITY. IN RESPONSE TO THE SAME UDA ORDE RED TO THE OWNER TO PAY THE ADDITIONAL PREMIUM WHICH WAS CALCULATED BY TAKING I NTO CONSIDERATION THE READY RECKNOR 2008-09 RATE. SINCE THE SAID PLOT WAS ACQUIRED BY US UNDER LEASE FROM THE OWNER, OWNER REQUESTED US TO PAY THE ADDIT IONAL PREMIUM ON THE BASIS OF CLAUSE II(1) OF THE LEASE DEED. CLAUSE II(1) OF THE LEASE DEED IS REPRODUCED BELOW. ' DURING THE SAID TERMS TO PAY THE RENT HEREINABOVE R ESERVED IN MANNER AFORESAID AND ALSO TO BEAR PAY AND DISCHARGE ALL EXISTING AND FUTURE RATES, TAXES, CHARGES ASSESSMENT DUTIES IMPOSITIONS, OUTGOINGS AN D BURDENS OF EVERY DESCRIPTION WHATSOEVER PAYABLE BY THE LESSOR TO GOV ERNMENT OR MUNICIPAL CORPORATION IN RESPECT OF THE LAND, BUILDINGS STRUC TURES AND CONSTRUCTION ERECTED OR TO BE ERECTED THEREON INCLUDING URBAN IMMOVABLE PROPERTY TAX AND RIOT TAX IF ANY ASSESSED CHARGED OR IMPOSED UPON THE DEMISED PR EMISES OR UPON THE OWNERS OR OCCUPIERS IN RESPECT THEREOF OR IN RESPEC T OF LAND OR BUILDING ERECTED THEREON. THE PRESENT TAXES PAYABLE ARE RS. 90,720/- (RUPEES NINETY THOUSAND SEVEN HUNDRED & TWENTY ONLY) PER YEAR. IN VIEW OF THE ABOVE CLAUSE WE HAVE PAID THE ADDITI ONAL PREMIUM OF RS. 3,33,90,500/- ON BEHALF OF THE LESSOR AND AMORTIZED THE SAME OVER THE BALANCE LEASE PERIOD OF 3 YEARS . ITA NO. 2082 MUM 2015 & ORS - APURVA NATVAR PARIKH & CO. PV T. LTD. 9 AS REQUIRED BY YOU WE ENCLOSE HEREWITH, THE FOLLOWI NG DOCUMENTS AS REQUIRED BY YOU PERTAINING TO PAYMENT MADE OF RS.3,33,90,500 /- TOWARDS ADDITIONAL PREMIUM LEVIED BY THE COMPETENT AUTHORITY OF URBAN LAND CEILING ACT. A. APPLICATION DATED 21.06.2008 MADE BY THE LAND OW NER 'NATVAR PARIKH & BROS 'FOR RELEASE OF SURPLUS VACANT LAND B. LETTER DATED 17. 02.2009 BY URBAN DEVELOPMENT AU THORITY TO DEPUTY COLLECTOR C. LETTER DATED 31.03.2009 NO NOC/ULC/D-5/6(J)/SR-7 , 659, 658 ADDRESSED TO NATVAR PARIKH & BROS, LAND OWNER BY DEPUTY COLLE CTOR (ULC) FOR PAYMENT OF ADDITIONAL PREMIUM OF &.3,33,90,500/-. D. COPY OF CHALLAN TOWARDS PAYMENT OF ADDITIONAL PR EMIUM OF &.3,33,90,500/- BY NATVAR PARIKH & CO. PVT. LTD. E. LETTER NO NOC/ULC/D-5/6(1)/SR-7, 659, 658 DATED 01.07.2009 FOR RELEASE OF SURPLUS VACANT LAND AFTER PAYMENT OF THE ADDITIONAL PREMIUM. 14. THE REPLY OF ASSESSEE WAS NOT ACCEPTED BY ASSESSING OFFICER. THE ASSESSING OFFICER CONCLUDED THAT MONTHLY PAYMENT OF LEASE REN T IS SEPARATELY PAYABLE BY ASSESSEE. THE AMOUNT OF LEASE PREMIUM CANNOT BE SAID TO BE PAYMENT OF RENT IN ADVANCE SUCH WOULD BE IN THE NATURE OF CAPI TAL EXPENDITURE INCURRED FOR OBTAINING LEASE HOLD RIGHT WHERE NO AMORTIZATIO N IS ALLOWABLE. THE COST INCURRED FOR LAND ALWAYS CAPITAL IN NATURE UNLESS A SSESSEE IS ENGAGED IN DEALING IN LAND, NO DEPRECIATION IS ALLOWABLE ON CO ST OF LAND AND THERE IS NO QUESTION FOR ALLOWING AMORTIZATION OF SUCH COST OF LAND. THE ASSESSING OFFICER FURTHER HELD THAT EXPENDITURE FOR ACQUISITI ON OF LEASE OR BRINGING INTO EXISTENCE OF ASSET OR ADVANTAGE OF ENDURING BENEFIT IS CAPITAL EXPENDITURE. THE LD. CIT(A) BY TAKING VIEW THAT PREMIUM WAS PAID BY ASSESSEE WHICH WAS DEMANDED FROM LESSER FOR THE LAND FROM ULCA. TH E ASSESSEE CAPITALIZED THE PREMIUM IN THE BOOKS OF ACCOUNT. TH E EXPENDITURE WAS ITA NO. 2082 MUM 2015 & ORS - APURVA NATVAR PARIKH & CO. PV T. LTD. 10 AMORTIZED FOR THREE YEAR AND ACCORDINGLY CLAIMED 1/ 3 RD OF RS. 3,33,90,500/-. THE LD. CIT(A) FURTHER NOTED THAT ASSESSEE CLAIMED EXPENSES AS BUSINESS EXPENDITURE. THE LD. CIT(A) FURTHER TOOK THE VIEW T HAT ASSESSEE IS ENTITLED TO CLAIM ONLY RENT PAID FOR THE LAND TAKEN ON LEASE AS REVENUE EXPENDITURE AND BY RELYING UPON THE DECISION OF HONBLE SUPREME COU RT IN PANBARI TEA COMPANY LTD. (SUPRA) WHEREIN IT WAS HELD THAT ONLY INSTALLMENT PAID AS PREMIUM WAS CAPITAL IN NATURE. IN SAID CASE, THE RE NT PAID WAS DISTINGUISHED FROM THE PREMIUM PAID. THE RENT WAS TREATED AS REVE NUE IN NATURE. HOWEVER, PREMIUM WAS TREATED AS CAPITAL IN NATURE. 15. WE HAVE INDEPENDENTLY EXAMINED THE FACTS OF THE ISS UE UNDER CONSIDERATION. THERE IS NO DISPUTE THAT PLOT OF LAND SITUATED ON S URVEY NO. 411B, CHEMBUR WAS UNDER THE LEASE OF NATVAR PARIKH & BROTHERS. TH E ASSESSEE DEVELOPED ITS CLUB ON THIS PLOT. FROM THE REPLY FURNISHED BY ASSE SSEE, IT IS CLEAR THAT LESSER OF ASSESSEE I.E. NATVAR PARIKH & BROTHERS, RELATED PARTY OF ASSESSEE MADE AN APPLICATION TO URBAN DEVELOPMENT AUTHORITY (UDA) TO RELEASE THE SURPLUS VACANT LAND FROM URBAN LAND & CEILING AUTHORITY (UL CA). THE UDA ORDERED TO THE OWNER/LESSER OF ASSESSEE TO PAY ADDI TIONAL PREMIUM ON THE BASIS OF RATE IN 2008-09. THE ASSESSEE CLAIMED THAT SAID PLOT WAS ACQUIRED BY THE ASSESSEE FROM ITS OWNER ON LEASE. THUS, THE OWN ER REQUESTED THE ASSESSEE TO PAY THE ADDITIONAL PREMIUM ON THE BASIS OF CLAUS E-II(I) OF LEASE-DEED. CLAUSE-II OF LEASE-DEED IS ALSO REPRODUCED BY ASSES SING OFFICER FROM THE REPLY OF ASSESSEE, WHICH WE HAVE EXTRACTED (SUPRA). WE HAVE ALSO PERUSED ITA NO. 2082 MUM 2015 & ORS - APURVA NATVAR PARIKH & CO. PV T. LTD. 11 THE CLAUSE-II(I) OF LEASE-DEED, COPY OF WHICH IS AV AILABLE AT PAGE NO.8 OF PAPER BOOK AND THE SAME IS CORRECTLY EXTRACTED BY A SSESSING OFFICER. PERUSAL OF CLAUSE-II (I) DISCLOSED THAT ASSESSEE TO PAY RENT, TO BEAR, PAY AND DISCHARGE EXISTING AND FUTURE RATES, TAX CHARGED, C OMPUTATION, IMPOSITION AND BURDEN ON EVERY DESCRIPTION WHATSOEVER PAYABLE BY LESSER TO GOVERNMENT OR MUNICIPAL CORPORATION IN RESPECT OF L AND, BUILDING STRUCTURE AND CONSTRUCTION ERECT OR TO BE ERECTED THEREON INC LUDING IMMOVABLE PROPERTY TAX AND ROIT TAX, IF ANY IMPOSITION ON THE OWNER IN RESPECT OF BUILDING THEREON. THE PRESENT TAX (PREVAILING TAX) WHICH WAS SPECIFIED AT RS. 90,720/- MENTIONED IN THE CLAUSE ITSELF. THERE IS N O CONDITION IN THE LEASE- DEED TO PAY ANY PREMIUM FOR RELEASE OF SURPLUS OR V ACANT LAND FROM ULCA. THE PAYMENT MADE FOR RELEASE OF SURPLUS LAND FROM U LCA IS NOWHERE THE LIABILITY OF ASSESSEE. MOREOVER THE SAID LAND WHICH WAS ALLEGEDLY RELEASED AFTER THE ORDER OF UDA WAS NOT THE PART OF BUSINESS ASSET AND IN POSSESSION OF ASSESSEE. THE ASSESSEE HAS NOT PROVED THAT THE P ARTIAL OF LAND RELEASED BY ASSESSEE WAS UNDER THE OCCUPATION OF ASSESSEE FOR T HE PURPOSE OF ITS BUSINESS. 16. WE HAVE PERUSED THE ENTIRE DEED. THE ENTIRE LEASE-D EED DOES NOT PRESCRIBED OR PUT ANY CONDITION OR OBLIGATION ON THE ASSESSEE FOR PAYMENT OF LEASE PREMIUM ON BEHALF OF LESSER. IN OUR VIEW, THE ASSES SEE HAS PAID THE PREMIUM ON BEHALF OF ITS RELATED PARTY AND THE SAME CANNOT BE CLAIMED AS REVENUE RECEIPT. THE CASE LAW RELIED BY LD. AR OF THE ASSES SEE IS NOT HELPFUL TO THE ITA NO. 2082 MUM 2015 & ORS - APURVA NATVAR PARIKH & CO. PV T. LTD. 12 ASSESSEE. IN EMPIRE JUTE CO. LTD. (SUPRA), THE HON BLE SUPREME COURT HELD THAT WHERE THERE IS NO ADDITION TO OR EXPANSION OF THE PROFIT-MAKING APPARATUS OF THE ASSESSEE. THE INCOME EARNING MACHI NE REMAINS WHAT IT WAS PRIOR TO THE PURCHASE OF LOOM HOURS. THE ASSESSEE I S MERELY ENABLED TO OPERATE THE PROFIT-MAKING STRUCTURE FOR A LONGER NU MBER OF HOURS. AND THIS ADVANTAGE IS CLEARLY NOT OF AN ENDURING NATURE. IT IS LIMITED IN ITS DURATION AND, MOREOVER, THE ADDITIONAL WORKING HOURS PER WEE K TRANSFERRED TO THE ASSESSEE HAVE TO BE UTILIZED DURING THE WEEK AND CA NNOT BE CARRIED FORWARD TO THE NEXT WEEK. IT IS, THEREFORE, NOT POSSIBLE TO SAY THAT ANY ADVANTAGE OF ENDURING BENEFIT IN THE CAPITAL FIELD WAS ACQUIRED BY THE ASSESSEE IN PURCHASING LOOM HOURS AND THE TEST OF ENDURING BENE FIT CANNOT HELP THE REVENUE. 17. FURTHER IN ASSOCIATED CEMENT CO. LTD. (SUPRA), THE HONBLE COURT HELD THAT IT IS MATERIAL TO CONSIDER IS THE NATURE OF THE ADV ANTAGE IN A COMMERCIAL SENSE AND IT IS ONLY WHERE THE ADVANTAGE IS IN THE CAPITAL FIELD THAT THE EXPENDITURE WOULD BE DISALLOWABLE ON AN APPLICATION OF THIS TEST. IF THE ADVANTAGE CONSISTS MERELY IN FACILITATING THE ASSES SEE'S TRADING OPERATIONS OR ENABLING THE MANAGEMENT AND CONDUCT OF THE ASSESSEE 'S BUSINESS TO BE CARRIED ON MORE EFFECTIVELY OR MORE PROFITABLY WHIL E LEAVING THE FIXED CAPITAL UNTOUCHED, THE EXPENDITURE WOULD BE ON REVE NUE ACCOUNT, EVEN THOUGH THE ADVANTAGE MAY ENDURE FOR AN INDEFINITE F UTURE. IN THE INSTANT CASE, THE ADVANTAGE WHICH WAS SECURED BY THE ASSESS EE BY MAKING THE ITA NO. 2082 MUM 2015 & ORS - APURVA NATVAR PARIKH & CO. PV T. LTD. 13 EXPENDITURE IN QUESTION WAS THE SECURING OF ABSOLUT ION OR IMMUNITY FROM LIABILITY TO PAY MUNICIPAL RATES AND TAXES UNDER NO RMAL CONDITIONS FOR A PERIOD OF 15 YEARS. IF THE LIABILITY HAD TO BE PAID , THE PAYMENTS WOULD HAVE BEEN ON REVENUE ACCOUNT AND, HENCE, THE ADVANTAGE S ECURED WAS IN THE FIELD OF REVENUE AND NOT CAPITAL. AND AS A RESULT OF THE EXPENDITURE INCURRED, THERE WAS NO ADDITION TO THE CAPITAL ASSETS OF THE ASSESS EE AND NO CHANGE IN ITS CAPITAL STRUCTURE. 18. WITH UTMOST REGARD TO THE DECISION OF HONBLE SUPRE ME COURT, IN OUR HUMBLE VIEW, THE RATIO OF THE DECISIONS ARE NOT HEL PFUL TO THE ASSESSEE. IN THE PRESENT CASE, THERE IS NO OBLIGATION UNDER LEASE AG REEMENT TO PAY AMORTIZATION OF LEASE PREMIUM BY ASSESSEE TO THE SU PER LESSER. THERE IS NO EVIDENCE ON RECORD THAT THE LAND WHICH WAS RELEASED BY UDA WAS UNDER THE OCCUPATION OF ASSESSEE OR IS PART OF BUSINESS ASSET , IN OTHER WORD IT WAS A PART AND PARTIAL OF THE PLOT OF LAND LEASED TO ASSE SSEE. THUS, THE RATIO OF THE DECISION OF HONBLE APEX COURT IS NOT APPLICABLE ON THE PRESENT CASE. IN THE RESULT, GROUND OF APPEAL RAISED BY ASSESSEE IS DISM ISSED. 19. GROUND NO.2 RELATES TO ADDITION/DISALLOWANCE UNDER SECTION 14A. THE LD. AR OF THE ASSESSEE SUBMITS THAT THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER MADE DISALLOWANCE UNDER SECTION 14 A R.W.R. 8D OF RS. 1109294/-. ON APPEAL, THE LD. CIT(A) DIRECTED TO DE LETE THE INVESTMENT MADE IN LIFT AND SHIFT INDIA PVT. LTD. BEING THE INVESTM ENT MADE IN GROUP/SUBSIDIARY COMPANY WHILE MAKING DISALLOWANCE UNDER RULE ITA NO. 2082 MUM 2015 & ORS - APURVA NATVAR PARIKH & CO. PV T. LTD. 14 8D(2)(III). THE LD. AR SUBMITS THAT AS PER THE DECI SION OF SPECIAL BENCH OF DELHI TRIBUNAL IN VIREET INVESTMENT PVT. LTD. [82 T AXMANN.COM 415 (DEL. SB), THE INVESTMENT WHICH GENERATED EXEMPT INCOME D URING THE RELEVANT ASSESSMENT YEAR SHOULD BE CONSIDERED FOR MAKING DIS ALLOWANCE. AS THE REVENUE HAS NOT FILED ANY APPEAL AGAINST THE ORDER OF LD. CIT(A), THE INVESTMENT MADE IN LIFT AND SHIFT INDIA PVT. LTD. S HOULD NOT BE CONSIDERED FOR MAKING DISALLOWANCE UNDER RULE 8D(2)(III) AND A CCORDINGLY, THE ASSESSING OFFICER MAY BE DIRECTED TO CONSIDER ONLY THOSE INVESTMENT WHICH YIELDED EXEMPT INCOME DURING THE YEAR. 20. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPO RTED THE ORDER LOWER AUTHORITIES. 21. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE PARTI ES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. DURING THE ASSESSMENT , THE ASSESSING OFFICER NOTED THAT ASSESSEE HAS RECEIVED DIVIDEND INCOME OF RS. 2.13 CRORE FROM THE INVESTMENT MADE IN EQUITY SHARE, MUTUAL FUND WHICH ARE CLAIMED AS EXEMPT UNDER SECTION 10(34). THE ASSESSEE DISALLOWED ONLY RS. 1739/- AS SUO-MOTO DISALLOWANCE. THE ASSESSING OFFICER REJECTED THE SU O-MOTO DISALLOWANCE BY TAKING VIEW THAT THE SAME IS NOT IN ACCORDANCE WITH THE PROVISION OF RULE 8D(2)(III). THE ASSESSEE WAS ASKED TO JUSTIFY THE A LLOCATION OF EXPENSES FOR EARNING EXEMPT INCOME. THE ASSESSEE FILED REPLY DAT ED 21.12.2012 AND STATED THAT ONLY RS. 1739/- IS INCURRED FOR EARNING EXEMPT INCOME. THE CONTENTION OF ASSESSEE WAS NOT ACCEPTED BY ASSESSIN G OFFICER BY TAKING ITA NO. 2082 MUM 2015 & ORS - APURVA NATVAR PARIKH & CO. PV T. LTD. 15 VIEW THAT THE ASSESSEE HAS MADE CONSIDERABLE TRANSA CTION IN MUTUAL FUND AND TRANSACTED IN PREFERENCE SHARE IN ITS WHOLLY OWNED SUBSIDIARY COMPANY. THE TRANSACTION REQUIRED MANPOWER AND OTHER OPERATIONAL EXPENDITURE. THE ASSESSING OFFICER INVOKED THE PROVISION OF RULE 8D AND MADE THE DISALLOWANCE OF DIRECT EXPENDITURE UNDER RULE 8D(2) (I) OF RS. 1739/- (SAME AS DISALLOWED BY ASSESSEE). NO DISALLOWANCE ON ACCO UNT OF INTEREST EXPENSES UNDER RULE 8D(2)(II). HOWEVER, THE ASSESSING OFFICE R MADE DISALLOWANCE UNDER RULE 8D(2)(III) @ .5% OF AVERAGE VALUE OF INV ESTMENT AND WORKED OUT THE DISALLOWANCE OF RS. 11,10,993/-. ON APPEAL BEFO RE THE LD. CIT(A), DIRECTED NOT TO CONSIDER THE INVESTMENT MADE IN LIF T AND SHIFT INDIA PVT. LTD., BEING MADE IN GROUP COMPANIES. AND REST OF TH E DISALLOWANCE UNDER RULE 8D(2)(III) WAS AFFIRMED. HOWEVER, THE ASSESSIN G OFFICER WRONGLY DEDUCTED RS. 1739/- FROM DISALLOWANCE OF RULE 8D(2) (III) WHICH WAS DIRECTED TO BE RECTIFIED. BEFORE US, THE LD. AR OF THE ASSESSEE VEHEMENTLY ARGUED THAT ONLY THOSE INVESTMENT WHICH YIELDED THE EXEMPT INCOME SHOULD BE CONSIDERED FOR CONSIDERING THE AVERAGE VALUE OF INVESTMENT FOR DISALLOWANCE UNDER RULE 8D(2)(III). 22. CONSIDERING THE DECISION OF SPECIAL BENCH OF DELHI TRIBUNAL IN VIREET INVESTMENT PVT. LTD. (SUPRA), WE DIRECT THE ASSESSI NG OFFICER TO RE-COMPUTE THE DISALLOWANCE UNDER RULE 8D(2)(III) BY CONSIDERI NG ONLY THOSE INVESTMENT WHICH YIELDED EXEMPT INCOME. NEEDLESS TO DIRECT THA T BEFORE COMPUTING THE DISALLOWANCE, THE ASSESSING OFFICER SHALL GRANT OPP ORTUNITY TO THE ASSESSEE. ITA NO. 2082 MUM 2015 & ORS - APURVA NATVAR PARIKH & CO. PV T. LTD. 16 IN THE RESULT, THIS GROUND OF APPEAL IS PARTY ALLOW ED. HOWEVER, WE MAY MAKE IT CLEAR THAT IN CASE ANY OTHER INVESTMENT MADE IN GROUP CONCERN AND GENERATED EXEMPT INCOME BE ALSO CONSIDERED FOR TAKI NG AVERAGE VALUE OF INVESTMENT, IF THOSE INVESTMENT YIELDED EXEMPT INCO ME AS PER THE DECISION OF SPECIAL BENCH OF VIREET INVESTMENT (SUPRA). 23. GROUND NO.4 RELATES TO PROFESSIONAL FEES PAYMENT OF RS. 8,20,356/-. THE LD. AR OF THE ASSESSEE SUBMITS THAT THE ASSESSING OFFIC ER MADE DISALLOWANCE OF PROFESSIONAL FEES PAID TO BHAGWAN MADHAV ON THE GRO UND THAT NO PROJECTS WERE UNDERTAKEN BY ASSESSEE DURING THE ASSESSMENT Y EAR UNDER CONSIDERATION. THE LD. AR SUBMITS THAT JUST BECAUSE THE ASSESSEE NOT COMMENCE ANY PROJECT DURING THE ASSESSMENT YEAR, DO ES NOT MEAN THAT EXPENSES SHOULD BE DISALLOWED. 24. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPO RTED THE ORDER OF LOWER AUTHORITIES. 25. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE PARTI ES AND PERUSED THE ORDER OF LOWER AUTHORITIES. WE HAVE NOTED THAT THE ASSESSING OFFICER DISALLOWED THE EXPENSES BY TAKING VIEW THAT HOUSING PROJECT IS YET TO COMMENCE AND SAME SHOULD BE CAPITALIZED AT THE TIME OF COMMENCEMENT OF PROJECT. DURING THE FIRST APPELLATE STAGE, THE ASSE SSEE STATED THAT THE PROFESSIONAL CHARGES WERE PAID TO BHAGWAN MADHAV, A CIVIL ENGINEER ENGAGED IN CONNECTION WITH HOUSING PROJECTS DEVELOP ED. THE ASSESSEE DEVELOPED HOUSING PROJECT IN PAST AND MERELY NO NEW PROJECT IS START, THE ITA NO. 2082 MUM 2015 & ORS - APURVA NATVAR PARIKH & CO. PV T. LTD. 17 EXPENSES CANNOT BE DISALLOWED. THE LD. CIT(A) AFFIR MED THE ACTION OF ASSESSING OFFICER THAT PROFESSIONAL CHARGES PAID FO R HOUSING DEVELOPED PROJECT IN THE PAST CANNOT BE ACCEPTED FOR REASONS THAT ASSESSEE FAILED TO ESTABLISH AGAINST WHICH PROFESSIONAL CHARGES WERE I NCURRED AND THAT ASSESSEE FAILED TO ESTABLISH THE NEXUS. WE HAVE NOTED THAT T HE ASSESSEE IS ENGAGED IN CONSTRUCTION ACTIVITIES. THE SERVICES OF CIVIL ENGI NEER ARE INTEGRAL PART OF CIVIL PROJECT CONSTRUCTION ACTIVITIES. THE ASSESSIN G OFFICER HAS NOT MADE ANY INVESTIGATION ABOUT THE GENUINENESS OF PAYMENT AND SERVICES RENDERED BY THE CIVIL ENGINEER. THE ASSESSING OFFICER SIMPLY DISALL OWED THE CHARGES PAID TO CIVIL ENGINEER BY TAKING VIEW THAT PROJECT IS YET T O START. SIMILARLY, THE LD. CIT(A) THE ACTION OF ASSESSING OFFICER HOLDING THAT ASSESSEE FAILED TO ESTABLISH THE NEXUS BETWEEN THE EXPENSES AND CORRES PONDING INCOME WITHOUT DISPUTING THE FACT THAT SERVICES OF CIVIL ENGINEER ARE INTEGRAL PART OF CIVIL CONSTRUCTION ACTIVITIES. CONSIDERING THE FACT THAT PROFESSIONAL CHARGES PAID TO CIVIL ENGINEER ARE DISALLOWED WITHOUT BRINGING ANY ADVERSE EVIDENCE ON RECORD AND BUSINESS OF ASSESSEE IS NOT IN DISPUTE, WE DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION. IN THE RESULT, THIS GROUND OF APPEAL IS ALLOWED. 26. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALL OWED. ITA NO. 5854/MUM/2015 FOR A.Y. 2011-12 BY REVENUE 27. GROUND NO.1 RELATES TO ONE TIME MEMBERSHIP FEES. WE HAVE NOTED THAT THIS GROUND OF APPEAL IS IDENTICAL TO THE GROUND NO.1 IN APPEAL FOR A.Y. 2010-11 BY REVENUE, WHEREIN WE HAVE DIRECTED THE ASSESSING OFFICER TO THE DECISION ITA NO. 2082 MUM 2015 & ORS - APURVA NATVAR PARIKH & CO. PV T. LTD. 18 IN ASSESSEES OWN CASE FOR A.Y. 2006-07 TO 2008-09 IN ITA NO. 2146 & 2148/MUM/2009 AND ITA NO. 2283/MUM/2011. THUS, THE ASSESSING OFFICER IS DIRECTED TO FOLLOW THE SAME DIRECTION. 28. GROUND NO.2 RELATES TO DISALLOWANCE UNDER SECTION 1 4A. THIS GROUND OF APPEAL IS SIMILAR TO THE GROUND NO.2 IN ASSESSEES APPEAL FOR A.Y. 2010-11, WHEREIN WE HAVE DIRECTED THE ASSESSING OFFICER TO M AKE DISALLOWANCE UNDER RULE 8D(2)(III) BY FOLLOWING THE DECISION OF SPECIA L BENCH OF DELHI TRIBUNAL IN VIREET INVESTMENT (SUPRA). THUS, THE AS SESSING OFFICER IS DIRECTED TO FOLLOW OUR ORDER ON GROUND NO.2 IN ASSE SSEES APPEAL FOR A.Y. 2010-11. IN THE RESULT, THIS GROUND OF APPEAL IS P ARTLY ALLOWED. 29. IN THE RESULT, APPEAL OF REVENUE IS PARTLY ALLOWED. ITA NO. 5034/MUM/2016 BY ASSESSEE FOR A.Y. 2012-13 ITA NO. 1400/MUM/2017 BY ASSESSEE FOR A.Y. 2013-14 ITA NO. 7521/MUM/2019 BY ASSESSEE FOR A.Y. 2014-15 ITA NO. 7522/MUM/2019 BY ASSESSEE FOR A.Y. 2015-16 30. IN ALL AFORESAID APPEALS EXCEPT FOR A.Y. 2012-13, T HE ASSESSEE HAS RAISED TWO SET OF GROUNDS OF APPEAL. FIRST SET OF GROUNDS OF A PPEAL RELATES TO ONE TIME MEMBERSHIP FEES AND SECOND SET OF GROUNDS RELATES T O DISALLOWANCE UNDER SECTION 14A. IN A.Y. 2012-13, ALL GROUNDS OF APPEAL RELATES TO ONE TIME MEMBERSHIP FEES. 31. FIRST SET OF GROUNDS OF APPEAL RELATES TO ONE TIME MEMBERSHIP FEES. WE HAVE NOTED THAT THIS GROUND OF APPEAL IS IDENTICAL TO TH E GROUND NO. 1 IN REVENUES ITA NO. 2082 MUM 2015 & ORS - APURVA NATVAR PARIKH & CO. PV T. LTD. 19 APPEAL, WHEREIN WE HAVE FOLLOWED THE DECISION OF TR IBUNAL FOR A.Y. 2006- 07 TO 2008-09, THEREFORE, OUR ORDER WILL APPLY MUTA TIS MUTANDI. 32. SECOND SET OF GROUNDS RELATES TO DISALLOWANCE UNDER SECTION 14A. THE LD. AR OF THE ASSESSEE SUBMITS THAT HE IS NOT PRESSING THE ISSUE ON DISALLOWANCE UNDER SECTION 14A. CONSIDERING THE SUBMISSION OF LD . AR OF THE ASSESSEE, THE GROUND RELATES WITH THE DISALLOWANCE UNDER SECT ION 14A IN APPEAL FOR A.Y. 2012-13 TO 2015-16 ARE DISMISSED. 33. IN THE RESULT, APPEALS OF ASSESSEE FOR A.Y. 2012-13 TO 2015-16 ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25/0 2/2020. SD/- SD/ - R.C. SHARMA PAWAN SINGH ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI, DATE: 25.02.2020 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR A BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI