The DCIT, Circle-3(1)(2), Ahmedabad V. M/s. Rajpath Club Ltd., Ahmedabad

ITA 361/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5847 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 19-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P M MEHTA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA NOS. 361 & 392/AHD/2015 (ASSESSMENT YEARS: 2010-2011 & 2011-2012) DCIT, CIR-3(1)(2), AHMEDABAD APPELLANT VS. M/S. RAJPATH CLUB LTD., S. G. HIGHWAY, THALTEJ, AHMEDABAD - 380059 RESPONDENT PAN: AAACR7379A / BY REVENUE : SHRI PRASOON KABRA, SR. D.R. / BY ASSESSEE : SHRI P. M. MEHTA, A.R. /DATE OF HEARING : 15.03.2018 /DATE OF PRONOUNCEMENT : 16.03.2018 ORDER PER S. S. GODARA, JUDICIAL MEMBER THESE TWO REVENUES APPEALS FOR ASSESSMENT YEARS 201 0-11 AND 2011- 12; ARISE FROM THE CIT(A)-9, AHMEDABADS SEPARATE O RDERS; BOTH DATED 18.11.2014, IN CASE NOS. CIT(A)-9/288/WD-5(1)/12-13 & CIT(A)- XI/388/ACIT.CIR-5/13-14, REVERSING ASSESSING OFFICE RS IDENTICAL ACTION MAKING ADDITION(S) OF RS.57,30,868/- AND RS.35,06,4 24/- QUA INCOME ON ACCOUNT OF BOOKING OF LAWN AND AC HALL FROM NON-MEM BERS OF THE ASSESSEE CLUB; RESPECTIVELY, IN PROCEEDINGS U/S. 143(3) OF T HE INCOME TAX ACT, 1961; IN SHORT THE ACT. ITA NOS. 361 & 392/AHD/2015 [DCIT VS. M/S. RAJPATH CLUB LTD.] A.YS. 2010-11 & 2011-12 - 2 - HEARD BOTH THE PARTIES. CASE FILES PERUSED. 2. LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY CO NTENDS DURING THE COURSE OF HEARING THAT THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE IMPUGNED IDENTICAL ADDITION PERTAINING TO ASSESSEE S INCOME DERIVED FROM ITS NON-MEMBERS BY PROVIDING THEM CLUBS LAWN AND AIR C ONDITIONED HALL FOR THE REASON THAT MUTUALITY PRINCIPLE DOES NOT APPLY IN SUCH A CASE. WE FIND THAT THIS ISSUE HAS NOT COME FOR THE FIRST TIME BEFORE T HE TRIBUNAL. A CO-ORDINATE BENCHS ORDER IN ASSESSEES CASE ITSELF ITA NO. 277 2/AHD/2010 FOR ASSESSMENT YEAR 2007-08 DECIDED ON 13.01.2011 HAS DECLINED REV ENUES IDENTICAL GRIEVANCE AS FOLLOWS: 5. W E HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE FACTS OF THE CASE AS ALSO DECISION RELIED UPON ON BEHALF OF THE ASSESSEE. W E FIND THAT WHILE ADJUDICATING A SIMILAR ISSUE IN THE ASSESSEE'S OWN CASE FOR THE AY 2005-06 , THE ITAT IN THEIR DECISION DATED 23-01- 2009 IN ITA NO.3780/AHD/2008 WHILE RELYING UPON THEIR EARLIER DECISION DATED 28-01-2008 IN ITA NO.3338/AH D/2007 FOR THE AY 2004-05, CONCLUDED AS UNDER:- '3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ORDE RS OF THE AUTHORITIES BELOW AND ALSO THE MATERIAL PLACED ON RECORD. AT TH E OUTSET, THE LEARNED AR OF THE ASSESSEE SUBMITTED BEFORE US THAT IN THE AYS 2003-04 SIMILAR ADDITION HAD BEEN MADE BY THE ASSESSING OFFICER BUT ON APPEAL, THE CIT(A) DELETED THE SAME. AGGRIEVED, REVENUE FILED A PPEAL BEFORE THE TRIBUNAL AND THE ITAT, D-BENCH, AHMEDABAD VIDE ORDE R DATED 23-2-2007 IN ITA NO.2830/AHD/2006 UPHELD THE ORDER OF THE CIT (A) AND DISMISSED THE APPEAL OF THE REVENUE. FOLLOWING THIS DECISION, THE ITAT, BENCH-D, AHMEDABAD IN ITA NO.3338/AHD/2007 DATED 28-1-2008 H AS DISMISSED THE APPEAL OF THE REVENUE FOR THE ASSESSMENT YEAR 2004- 05 UPHOLDING THE ORDER OF THE CIT(A) DELETING SIMILAR ADDITION. THE RELEVANT PORTION OF THE ORDER; DATED 28-1-2008 IN ITA NO.3338-/AHD/2007 IN ASSESSEE'S OWN CASE IS REPRODUCED AS UNDER: 3. LEARNED COUNSEL FOR THE ASSESSEE, WHILE RELYING ON THE ORDER OF CIT(A) CONTENDS THAT ITAT IN ASSESSSEE'S OWN CASE F OR A.Y.2003-04 IN ITA NO.2830/AHD/2006 DATED 23-2-2007 ALLOWED SIMILAR CL AIM OF THE ASSESSEE BY FOLLOWING OBSERVATIONS: '6. WE HAVE HEARD THE LE ARNED REPRESENTATIVES OF THE PARTIES. THE ADMITTED FACTS OF THE CASE, ARE THAT THE AC HALL AND LAWN INCLUDING 'OTHER FACILITIES WERE PROVIDED ONLY TO THE MEMBERS. NON- MEMBERS CANNOT HIRE THE CLUB PREMISES ON THEIR OWN EXCEPT THROUGH THE MEMBERS. IN FACT ALL THE ACCOUNTING ENTRIES AND COL LECTION IS IN THE NAME OF THE MEMBERS. THE APEX COURT HELD THAT TO ESTABLI SH THE DOCTRINE OF MUTUALITY, THE FOLLOWING THREE CONDITIONS SHOULD EX IST: ITA NOS. 361 & 392/AHD/2015 [DCIT VS. M/S. RAJPATH CLUB LTD.] A.YS. 2010-11 & 2011-12 - 3 - 1. THE IDENTITY OF THE CONTRIBUTORS TO THE FUND AND THE RECEIPTS FROM THE FUND. 2. THE TREATMENT OF THE COMPANY THOUGH INCORPORATED AS A MERE ENTITY FOR THE CONVENIENCE OF THE MEMBERS. 3. THE IMPOSSIBILITY THAT CONTRIBUTORS SHOULD DERIV E PROFITS FROM CONTRIBUTIONS MADE BY THEMSELVES TO FUND WHICH COUL D ONLY BE EXPENDED AND RETURNED TO THEMSELVES. IT IS NOT THE CASE OF THE REVENUE THAT 'ANY OF THE ABOVE CONDITION IS NOT EXIST IN THIS CASE UNDER CONSIDERATION. THE CASE OF THE REVENUE ONLY IS THAT THE AO HALL AND LAWN WAS GIVEN TO RELATIVES AND GUE STS OF THE MEMBERS. THE APEX COURT IN THE CASE OF CHELARAM FOOD CLUB VS . CIT HELD THAT THE DOCTRINE OF MUTUALITY IS APPLICABLE EVEN TO MEMBERS AND THEIR GUESTS. SINCE IN THE CASE UNDER CONSIDERATION] THE FACILITI ES OF AC HALL AND LAWN WAS PROVIDED TO THE GUESTS OF THE MEMBERS ON ACCOUN T OF THE MEMBER HIMSELF, THUS IT CANNOT BE SAID THAT THE FACILITIES WERE PROVIDED TO NON- MEMBERS, IF OTHER CONDITIONS ARE SATISFIED. WE FIND THAT THE ASSESSEE IS ENTITLED FOR THE BENEFIT OF DOCTRINE OF MUTUALITY. THE DECISIONS RELIED UPON BY THE LEARNED DR ARE DISTINGUISHABLE ON FACTS AS T HOSE DECISIONS HAVE BEEN DECIDED BY THE COURTS BY CONSIDERING THE FACTS OF THE RESPECTIVE CASE. IN LIGHT OF ABOVE DISCUSSION, WE ARE INCLINED TO UP HOLD THE ORDER OF THE CIT(APPEALS).' IT IS SUBMITTED THAT CIT(A) WHILE PASSING IMPUGNED ORDER RELIED ON THE ABOVE ORDER OF THE ITAT AND PASSED JUST AND PROPER ORDER, THEREFORE, THE SAME MAY BE UPHELD AND APPEAL OF THE REVENUE BE DIS MISSED. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED MATE RIAL AVAILABLE ON RECORD. WE FIND THAT ON SIMILAR ISSUE FOR A.Y.2003- 2004 ITAT BY THE ABOVE ORDER IN ASSESSEE'S OWN CASE DISMISSED APPEAL OF THE REVENUE IN FAVOUR OF THE ASSESSEE, AND RELYING ON THE SAME PRO POSITION, CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY THE IMPUGNED O RDER FOR THIS ASSESSMENT YEAR ALSO. THEREFORE, WE FIND NO INFIRMI TY IRJ ORDER OF CIT(A), WHICH IS UPHELD.' 5. IN THE RESULT, REVENUE'S APPEAL IS DISMISSED.' THEREFORE, FACTS AND ISSUE ADMITTEDLY BEING COMMON ALSO IN THE ASSESSMENT YEAR UNDER CONSIDERATION, RESPECTFULLY F OLLOWING THE ABOVE DECISIONS OF THE TRIBUNAL IN ASSESSEE'S OWN CASE, W E UPHOLD THE IMPUGNED ORDER OF THE LEARNED CIT(A) AND DISMISS THE APPEAL OF THE REVENUE.' 6. IN THE LIGHT OF CONSISTENT VIEW TAKEN BY THE ITA T IN THEIR DECISIONS IN THE ASSESSEE'S OWN CASE FOR THE AFORESAID AYS 2003-04 & 2005-06, ESPECIALLY WHEN FACTS AND THE CIRCUMSTANCES OBTAINING IN THE YEAR U NDER CONSIDERATION ARE SIMILAR TO FACTS AND CIRCUMSTANCES IN THE PRECEDING YEARS, WE HAVE NO ALTERNATIVE BUT TO UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A),DELETIN G THE ADDITION. THEREFORE, GROUND NO.1 IN THE APPEAL IS DISMISSED. ITA NOS. 361 & 392/AHD/2015 [DCIT VS. M/S. RAJPATH CLUB LTD.] A.YS. 2010-11 & 2011-12 - 4 - 3. LEARNED DEPARTMENTAL REPRESENTATIVE FAILS TO INDI CATE ANY DISTINCTION ON FACTS OR LAW IN THE TWO ASSESSMENT YEARS IN QUESTIO N. WE THUS ADOPT JUDICIAL CONSISTENCY TO AFFIRM THE CIT(A)S FINDINGS IN THE IMPUGNED ASSESSMENT YEARS AS WELL. 4. THESE TWO REVENUES APPEALS ARE DISMISSED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 16 TH DAY OF MARCH, 2018.] SD/- SD/- ( AMARJIT SINGH ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 16/03/2018 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ()*+ ,--. ./0 / DR, ITAT, AHMEDABAD 1+23 / GUARD FILE. BY ORDER / . // ./0