ITO (E) II(1), MUMBAI V. PARMANAND JIVANDAS HINDU GYMKHANA, MUMBAI

ITA 3605/MUM/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8358 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 08-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Rule of consistency
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ./I.T.A. NO.3605/M/2013 ( AY: 2009 - 2010 ) ITO (E) - II(1), 509, 5 TH FLOOR, PIRAMAL CHAMBERS, LALBAUG, MUMBAI - 12. / VS. PARMANAND JIVANDAS HINDU GY MKHANA, NETAJI SUBHASH ROAD, MARINE DRIVE, MUMBAI - 400002. ./ PAN : AAACO3868Q ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI MOHIT JAIN / RESPONDENT BY : SHRI NIRAJ SHETH / DATE OF HEARING :14.8.2014 / DATE OF PRONOUNCEMENT :22 .8.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 8.5.2013 IS AGAINST THE ORDER OF THE CIT (A) - 1, MUMBAI DATED 1.2.2013 FOR THE ASSESSMENT YEAR 2009 - 2010. 2. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD CIT (A) ERRED IN HOLDING THAT THE INTEREST EARNED BY THE ASSESSEE ON THE FIXED DEPOSITS SHOULD BE ASSESSED AS INCOME FROM BUSINESS , WHEN THE SAME IS TO BE TREATED AS INCOME FROM OTHER SOURCES . 3 . BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE EARNS INCOME BY ENCOURAGING AND PROMOTING GAMES AND SPORTS AND FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 12,24,492/ - . ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT DETERM INING THE ASSESSED INCOME OF RS.76,92,576/ - . IN THE ASSESSMENT, AO DISALLOWED THE ASSESSEES CLAIM OF RS. 15,62,245/ - UNDER THE HEAD INCOME FROM BUSINESS & PROFESSION, WHICH WAS ADJUSTED AGAINST THE BROUGHT FORWARD LOSSES. AO ALSO TREATED THE INTERES T INCOME EARNED BY THE ASSESSEE FROM THE FIXED DEPOSITS OF RS. 58,49,831/ - . AGGRIEVED WITH THE DECISION OF THE AO, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 2 4. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, A FTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AS WELL AS FOLLOWING THE ORDER OF THE ITAT IN ASSESSEES OWN CASE FOR THE AY 2008 - 2009, DATED 31.5.2012, CIT (A) PARTLY ALLOWED THE ASSESSEES APPEAL. AGGRIEVED WITH THE DECISION OF THE CIT (A), REVENUE FIL ED THE PRESENT APPEAL BY RAISING THE ABOVE MENTIONED GRO UND . 5. DURING THE PROCEEDINGS BEFORE US, LD DR RELIED ON THE ORDER OF THE AO. 6. ON THE OTHER HAND SHRI NIRAJ SHETH, LD COUNSEL FOR THE ASSESSEE, HEAVILY RELIE D ON THE ORDER OF THE CIT (A) AND MENTIONED THAT THE MAIN ISSUE IN THE APPEAL RELATES TO THE TAXABILITY OF THE INTEREST INCOME UNDER THE HEAD BUSINESS INCOME OR INCOME FROM OTHER SOURCES. CONSISTENTLY, ASSESSEE HAS BEEN OFFERING THE SAME AS BUSINESS INCOME AND THE SAME IS BEING APPROVED BY THE TRIBUNAL IN THE EARLIER ASSESSMENT YEARS. IN SUPPORT OF THE SAME, ASSESSEE FILED ORDER OF THE TRIBUNAL FOR THE AY 2005 - 2006 VIDE ITA NO.1629/M/2010, DATED 14.1.2011 AND ANOTHER ORDER OF THE ITAT FOR THE AY 200 7 - 2008 VIDE ITA NO.6919/M/2010, DATED 31.5.2012. THE TRIBUNAL VIDE ITS ORDER DATED 31.5.2012 (SUPRA) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE IN ALL THE YEARS SINCE AY 1985 - 86 ONWARDS ( PARA S 5 TO 7 ARE RELEVANT IN THIS REGARD ) . 7. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AND THE RELEVANT MATERIAL PLACED BEFORE US AS WELL AS THE CITED ORDERS OF THE TRIBUNAL (SUPRA). ON PERUSAL OF THE TRIBUNALS ORDER DATED 31.5.2012 (SUPRA), WE FIND THE PARA 7 IS RELEVANT IN THIS R EGARD WHICH READS AS UNDER: 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THERE IS NO DISPUTE THAT THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE VARIOUS DECISIONS OF THE TRIBUNAL IN ASSESSEES OWN CASE. THE TRIBUNAL IN ITA NO.1629/MUM/2010, DATED 14.1.2011 FOR AY 2005 - 2006 IN ASSESSEES OWN CASE AFTER CONSIDERING ALL THE DECISIONS RELIED ON BY THE LD COUNSEL FOR THE ASSESSEE HAS HELD VIDE PARA 6 OF ITS ORDER AS UNDER: 6. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD WE FIND MERIT IN THE PLEA OF THE LD COUNSEL FOR THE ASSESSEE THAT THE ISSUE IS SQUARELY COVERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL IN ITA NO.2963/BOM/89 FOR ASSESSMENT YEAR 1985 - 86 DATED 29.8.1996 WHEREIN THE TRIBUNAL BY FOLLOWING THE ORDER OF THE TRIBUNAL IN ITO VS. THE FIRE SALVAGE ASSOCIATION OF BOMBAY LIMITED IN ITA NO.1889 & 1461/BOM/73 - 74 HAS HELD VI DE PARA 9 OF ITS ORDER THAT THE INTEREST INCOME DERIVED B THE ASSESSEE FROM FIXED DEPOSITS IS TO BE TREATED AS BUSINESS INCOME AND DEDUCTION BE ALLOWED AS IN THE EARLIER YEARS. THE ABOVE ORDER OF THE TRIBUNAL HAS BEEN FOLLOWED BY THE TRIBUNAL IN THE SUBSEQ UENT ASSESSMENT YEARS AS ABOVE. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUGHT ON RECORD BY THE REVENUE, WE, RESPECTFULLY FOLLOWING THE CONSISTENT VIEW OF THE TRIBUNAL HOLD THAT THE INTEREST INCOME DERIVED BY THE ASSESSEE FROM THE FDRS SHOULD BE ASS ESSED AS INCOME FROM BUSINESS AND ACCORDINGLY WE ARE INCLINED TO UPHOLD THE FINDING OF THE CIT (A) IN ALLOWING THE CLAIM OF THE ASSESSEE. THE GROUNDS TAKEN BY THE REVENUE, ARE, THEREFORE, REJECTED. 3 IN ABSENCE OF ANY DISTINGUISHING FEATURE BROUGHT ON REC ORD BY THE REVENUE AND KEEPING IN VIEW THE RULE OF CONSISTENCY, WE HOLD THAT THE INTEREST INCOME DERIVED BY THE ASSESSEE FROM THE FDRS SHOULD BE ASSESSED AS INCOME FROM BUSINESS AND ACCORDINGLY THE ORDER PASSED BY THE CIT (A) IN ALLOWING THE CLAIM OF THE A SSESSEE DOES NOT CALL FOR ANY INTERFERENCE. THE GROUNDS TAKEN BY THE REVENUE ARE, THEREFORE, REJECTED. 8 . CONSIDERING THE ABOVE SETTLED NATURE OF THE ISSUE IN THIS CASE ON IDENTICAL ISSUE , WE ARE OF THE OPINION THAT THE DECISION TAKEN BY THE CIT (A) IS F AIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 9 . IN THE RESULT, APPEAL OF THE R EVENUE IS DISMISSED . ORDER PRO NOUNCED IN THE OPEN COURT ON 22 ND AUGUST, 2014. SD/ - SD/ - (AMIT SHUKLA) (D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 22 /08/2014 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI