M/s. The Coonoor Club, Coonoor V. ITO, Ooty

ITA 2160/CHNY/2008

• Counselvise Citation: 216021714 RSA 2008
• Duration Of Justice: 2 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 09-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 26-11-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIRUDH RAI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI [BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER] I.T.A NO. 2160/MDS/2008 (ASSESSMENT YEAR : 2006-07 ) THE COONOOR CLUB CLUB ROAD COONOOR NILGIRIS VS THE INCOME-TAX OFFICER WARD I(2) OOTY [PAN AAAAC3157H ] (APPELLANT) (RESPONDENT) APPELLANT BY : MS.HEMA MURALIKRISHNAN, ADVOCATE RESPONDENT BY : SHRI ANIRUDH RAI, CIT/DR DATE OF HEARING : 09-09-2011 DATE OF PRONOUNCEMENT : 09-08-2011 O R D E R PER HARI OM MARATHA, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE, FOR ASSESSMENT YE AR 2006-07, IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A), COIMB ATORE, DATED 3.10.2008. 2. AT THE OUTSET, IT WAS BROUGHT TO OUR NOTICE THAT SIMILAR ISSUES ARISING IN ASSESSMENT YEAR 2005-06 ARE PENDING FOR DECISION BEFORE THE HON'BLE SUPREME COURT AND IN THE LIGHT OF SUBMISSIO NS SO MADE AFTER ITA 2160/08 :- 2 -: FILING A DECLARATION U/S 158A(1) OF THE ACT IN THI S REGARD, IT WAS PRAYED THAT UNTIL THE FINAL DECISION OF THE QUESTIONS OF L AW RAISED IN ASSESSMENT YEAR 2005-06, WHICH ARE IDENTICAL TO THI S YEAR, THIS APPEAL MAY BE EITHER KEPT PENDING IN ITAT OR TO KEEP THE I SSUE ALIVE, IT MAY BE RESTORED TO THE FILE OF THE ASSESSING OFFICER. A COPY OF THE DECLARATION WAS PROVIDED TO THE LD.CIT/DR ALSO. 3. AFTER EXAMINING THE RECORDS, WE FIND THAT THE FO LLOWING TWO QUESTIONS ARE PENDING TO BE DECIDED/ANSWERED BY HON 'BLE SUPREME COURT IN ASSESSEES OWN CASE AND SAME AND SIMILAR L EGAL ISSUES ARE INVOLVED IN THIS APPEAL BEFORE US. THE QUESTIONS P ENDING BEFORE HON'BLE APEX COURT ARE AS UNDER: (A) WHETHER THE HIGH COURT IS RIGHT IN HOLDING THAT INVESTMENT OF SURPLUS FUND WITH SOME OF THE MEMBER BANKS AND OTHER INSTITUTIONS IN THE FORM OF FIXED DEPOSITS WHICH IN TURN RESULTED IN EARNING AMOUNTS BY WAY OF INTEREST CANNOT BE HELD TO SATISFY THE MUTUA LITY CONCEPT WHEN IT IS NOT IN DISPUTE THAT THE PETITION ER HEREIN IS A MEMBERS CLUB AND GOVERNED BY THE PRINCIPLES OF MUTUALITY IN ALL ITS TRANSACTIONS? (B) IS NOT THE HIGH COURT JUDGMENT CONTRARY TO THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS CAWNPORE CLUB REPORTED IN (2004) 140 TAXMAN 378; WHEREIN ON THE QUESTION WHETHER THE INCOME DERIVED FROM PROPERTY LET OUT AND INCOME BY WAY OF INTEREST RECEIVED FROM FDR, NSC ETC., WAS EXIGIBLE TO THE LE VY OF INCOME TAX, THE SUPREME COURT HELD THAT NO USEFU L PURPOSE COULD BE SERVED IN PROCEEDING WITH APPEALS ON THE SAID QUESTIONS AS THE ASSESSEE COULD NOT BE TAX ED ON THE PRINCIPLES OF MUTUALITY? ITA 2160/08 :- 3 -: 4. THEREFORE, UNDER THE PROVISIONS OF SECTION 158A(1)O F THE ACT, WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE SHOULD BE KEPT ALIVE IN ORDER TO AVOID MULTIPLICITY OF LITIGATIONS. CONSEQ UENTLY, WE RESTORE THIS APPEAL TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION THAT HE SHALL WAIT TILL THE FINALIZATION OF THE ISSUES INVOLVED I N THE APPEAL FOR ASSESSMENT YEAR 2005-06 BY THE HON'BLE SUPREME COUR T AND TO APPLY THE ANSWER GIVEN BY IT. CONSEQUENTLY, THIS APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES AS ABOVE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STAND S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 09-08-2011. SD/- SD/- (DR. O.K. NARAYANAN) VICE-PRESIDENT (HARI OM MARATHA) JUDICIAL MEMBER DATED: 09 TH AUGUST, 2011 RD COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR