DCIT, New Delhi V. M/s. Delhi Gymkhana Club Ltd., New Delhi

ITA 657/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61597 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 07-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Assessee Lawyers: PRASHANT SHUKLA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH B BB B : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI I.P.BANSAL I.P.BANSAL I.P.BANSAL I.P.BANSAL, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NOS SS S. .. .6 66 656 5656 56/DEL/2012 /DEL/2012 /DEL/2012 /DEL/2012 & 657/DEL/2012 & 657/DEL/2012 & 657/DEL/2012 & 657/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEARS SS S : : : : 200 200 200 2004 44 4- -- -05 0505 05 & 2006 & 2006 & 2006 & 2006- -- -07 0707 07 DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX INCOME TAX INCOME TAX INCOME TAX, ,, , CIRCLE CIRCLE CIRCLE CIRCLE- -- -1 11 10 00 0(1), (1), (1), (1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. M/S DELHI GYMKHANA CLUB LIMITED, M/S DELHI GYMKHANA CLUB LIMITED, M/S DELHI GYMKHANA CLUB LIMITED, M/S DELHI GYMKHANA CLUB LIMITED, 2, SAFDARJUNG ROAD, 2, SAFDARJUNG ROAD, 2, SAFDARJUNG ROAD, 2, SAFDARJUNG ROAD, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. PAN : AAACD0896L. PAN : AAACD0896L. PAN : AAACD0896L. PAN : AAACD0896L. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SURENDER PAL, SR.DR. RESPONDENT BY : SHRI PRASHANT SHUKLA, ADVOCATE. ORDER ORDER ORDER ORDER P PP PER G. ER G. ER G. ER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-IV, NEW DELHI DATED 2 ND NOVEMBER, 2011. 2. THE ONLY GROUND RAISED BY THE REVENUE IN THESE T WO APPEALS IS AGAINST THE CANCELLATION OF PENALTY LEVIED UNDER SE CTION 271(1)(C) OF THE IT ACT, 1961. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS E NGAGED IN RUNNING A MEMBERSHIP CLUB. DURING THE YEARS UNDER APPEAL, THE ASSESSEE CLAIMED INTEREST FROM BANK, NHB BONDS ETC. AND CAPI TAL GAINS TO BE EXEMPT UNDER THE DOCTRINE OF MUTUALITY. THE ASSESS ING OFFICER DID NOT ACCEPT THE ASSESSEES CLAIM AND MADE THE ADDITION I N RESPECT OF INTEREST INCOME AS WELL AS INCOME FROM CAPITAL GAIN S. HE ALSO LEVIED THE PENALTY UNDER SECTION 271(1)(C). IN THE QUANTU M APPEAL, SIMILAR ISSUE CAME UP BEFORE THE ITAT IN AY 2003-04 WHEREIN THE ITAT DELETED THE ADDITION AND, IN THE ASSESSMENT YEARS UNDER APP EAL, I.E., AY 2004- 05 AS WELL AS 2006-07, FOLLOWING ITS OWN ORDER FOR AY 2003-04, THE ITA-656 & 657/DEL/2012 2 ADDITIONS WERE SET ASIDE TO THE FILE OF THE ASSESSI NG OFFICER FOR PASSING FRESH ORDER IN THE LIGHT OF THE DECISION OF ITAT AS WELL AS HONBLE JURISDICTIONAL HIGH COURT FOR AY 2003-04. THE RELE VANT FINDING OF THE ITAT READS AS UNDER:- 2.3 WE HAVE DULY CONSIDERED THE RIVAL CONTENTION A ND GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED BY THE HONBLE HIGH COURT IN THE CASE OF ASSESSEES OWN CASE. THE JUDG MENT REFERRED BY THE LEARNED CIT(A) IN THE CASE OF CHELM SFORD CLUB 243 ITR 89, SPORTS CLUB OF GUJARAT VS. CIT AND DIT(E) VS. ALL INDIA ORIENTAL BANK OF COMMERCE WELFARE SOC IETY HAVE BEEN CONSIDERED BY THE HONBLE HIGH COURT. TH E JUDGMENT IS FULLY APPLICABLE ON THE FACTS OF THE PR ESENT THREE ASSESSMENT YEARS. CONSIDERING THE DECISION O F HONBLE DELHI HIGH COURT, WE DIRECT THE ASSESSING O FFICER TO VERIFY THE FACTS AND CIRCUMSTANCES IN RESPECT OF IN COME EARNED FROM INVESTMENT, INTEREST AND SALE OF INVEST MENT IN THE LIGHT OF ORDER OF THE ITAT IN ASSESSMENT YEAR 2 003-04 AS WELL AS IN THE LIGHT OF THE HONBLE HIGH COURTS DECISION IN ASSESSMENT YEAR 2003-04. IN OTHER WORDS, LEARNE D ASSESSING OFFICER SHALL GIVE SAME EFFECT TO THE REC EIPTS IN THESE THREE YEARS AS WAS GIVEN IN ASSESSMENT YEAR 2 003- 04. 4. THE LEARNED CIT(A) CANCELLED THE PENALTY AFTER C ONSIDERING THE ABOVE FINDING OF THE ITAT AND ALSO THE DECISION OF HONBLE JURISDICTIONLA HIGH COURT FOR AY 2003-04. THE RELEVANT FINDING OF THE LEARNED CIT(A) IN THIS RESPECT READS AS UNDER:- ON FIRST APPEAL, THE LD.CIT(A)-XVI, NEW DELHI HAS DISMISSED THE ABOVE GROUNDS OF THE ASSESSEE. HOWEVER, IT IS POINTED ITA-656 & 657/DEL/2012 3 OUT BY THE LD.AR THAT THE ISSUES WITH REGARD TO QUA NTUM HAS BEEN COVERED IN FAVOUR OF THE ASSESSEE IN ITS O WN CASE BY THE HONBLE ITAT, DELHI IN AY 2003-04 AND FURTHE R APPEAL FILED BY THE REVENUE HAS BEEN DISMISSED BY T HE HONBLE DELHI HIGH COURT VIDE ITS DETAILED ORDER DA TED 09.12.2010 IN ITA NO.1288 OF 2010. IT IS FURTHER P OINTED OUT BY THE LD.AR THAT THE ISSUES IN QUESTION HAVE A LSO BEEN DECIDED IN FAVOUR OF THE ASSESSEE IN ITS OWN CASE B Y THE HONBLE ITAT, DELHI FOR AYS 2004-05, 2006-07 AND 20 07-08 (WHICH INCLUDES THE ASSESSMENT YEARS UNDER CONSIDER ATION BEFORE US) VIDE COMMON ORDER DATED 24.06.2011 IN IT A NOS.187, 188 & 189/DEL/2011. THE LD.AR HAS FILED C OPY OF THE ABOVE ORDERS. IT IS ARGUED THAT IN VIEW OF THE ABOVE, THE IMPUGNED PENALTY HAS NO BASIS AND NEEDS TO BE QUASHED. IN VIEW OF THE FOREGOING, I FIND THAT THE BASIS ON WHICH THE PENALTY U/S 271(1)(C) WAS INITIATED AND L EVIED NO LONGER SURVIVES. IN OTHER WORDS, THE PENALTY ORDER S HAVE NO LEGS TO STAND ON. THE IMPUGNED PENALTIES IMPOSE D U/S 271(1)(C), THEREFORE, STAND DELETED. 5. AFTER CONSIDERING THE FACTS OF THE CASE AND ARGU MENTS OF BOTH THE SIDES, WE DO NOT FIND ANY INFIRMITY IN THE ABOVE FI NDING OF THE LEARNED CIT(A). THE ASSESSEES CLAIM HAS BEEN ACCEPTED BY THE ITAT IN ASSESSEES OWN CASE FOR AY 2003-04 AND WHICH HAS AL SO BEEN UPHELD BY THE HONBLE JURISDICTIONAL HIGH COURT. IN AY 20 04-05 & 2006-07, THE ITAT DIRECTED THE ASSESSING OFFICER TO PASS THE ORD ER AFRESH IN VIEW OF THE ABOVE DECISION OF HONBLE JURISDICTIONAL HIGH C OURT. IT HAS NOT BEEN SHOWN TO US BY THE REVENUE THAT AFTER THE ORDER OF THE ITAT, ANY ADDITION IS MADE IN THE CASE OF THE ASSESSEE IN THI S REGARD. EVEN OTHERWISE, MERELY BECAUSE THE ASSESSEES CLAIM THAT ITS INCOME FROM INTEREST/CAPITAL GAIN IS EXEMPT ON ACCOUNT OF MUTUA LITY IS REJECTED WOULD NOT AMOUNT TO CONCEALMENT OF INCOME. IT IS N OT THE CASE OF THE ITA-656 & 657/DEL/2012 4 REVENUE THAT THE ASSESSEE CONCEALED ANY PARTICULAR FACT OR FURNISHED ANY INCORRECT FACT. ON THESE FACTS, THE DECISION O F HONBLE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT.LTD. 322 ITR 158 WOULD BE SQUARELY APPLICABLE. IN VIEW OF THE ABOVE, WE DO N OT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF LEARNE D CIT(A). THE SAME IS SUSTAINED FOR BOTH THE YEARS UNDER CONSIDERATION. 6. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON CONCLUSION OF HEARING ON 10 TH APRIL, 2012. SD/- SD/- ( (( (I.P.BANSAL I.P.BANSAL I.P.BANSAL I.P.BANSAL) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 10.04.2012 VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR