WILLINGDON CATHOLIC GYMKHANA, MUMBAI V. ACIT 19(2), MUMBAI

ITA 6887/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8825 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 13-09-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 11-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMARD EEP
• Assessee Lawyers: BHARAT B JOKHARKAR
• Keywords: Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER. I.T.A. NO. 6887/MUM/2011. ASSESS MENT YEAR :2007-08. M/S WILLINGDON CATHOLIC GYMKHANA, ASSTT. COMMISSIONER OF CHURCH AVENUE, SANTACRUZ (W), VS. INCOME-TAX-19(2), MUMBAI 400054. MUMBAI. PAN AAAAW0008K APPELLANT RESPONDENT. APPELLANT BY : SHRI BHARAT B. JOKHARKAR . RESPONDENT BY : SHR I AMAR DEEP. DATE OF HEARING : 13-09-2012. DATE OF PRONOUNCEMENT : 26-09-2012. O R D E R PER P.M. JAGTAP, A.M. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LEARNED CIT(APPEALS)-35, MUMBAI DATED 18-07-2011 AND THE SO LITARY ISSUE ARISING OUT OF THE SAME RELATES TO THE ADDITION OF RS.3,49,625/- M ADE BY THE AO AND CONFIRMED BY THE LEARNED CIT(APPEALS) ON ACCOUNT OF DISALLOWANCE OF EXPENSES. 2. THE ASSESSEE IN THE PRESENT CASE IS A NON-PROFIT MAKING SPORTS & AMENITIES CLUB TREATED AS AOP. THE RETURN OF INCOME FOR THE Y EAR UNDER CONSIDERATION WAS FILED BY IT ON 31-10-2007 DECLARING TOTAL INCOME OF RS.22,97,618/-. IN THE SAID 2 ITA NO. 6887/MUM/2011 RETURN, INTEREST AND OTHER MISCELLANEOUS INCOME WAS DECLARED BY THE ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES AND EXPENSES A MOUNTING TO RS.4,85,872/- WERE CLAIMED AS DEDUCTION AGAINST THE SAID INCOME. THE EXPENSES SO CLAIMED WERE COMPRISING OF 25% OF ADMINISTRATIVE EXPENSES AND 50 % OF PROFESSIONAL FEES AND AUDIT FEES. ACCORDING TO THE AO, THE EXPENSES SO CL AIMED BY THE ASSESSEE WERE NOT INCURRED WHOLLY AND EXCLUSIVELY TO EARN THE INTERES T INCOME AND MISCELLANEOUS INCOME AND THE SAME, THEREFORE, WERE NOT DEDUCTIBLE U/S 57(III). HOWEVER, KEEPING IN VIEW THE PRINCIPLES OF NATURAL JUSTICE AND REASO NABLENESS, HE ALLOWED THE DEDUCTION U/S 57(III) ON ACCOUNT OF THE EXPENSES IN CURRED BY THE ASSESSEE TO THE EXTENT OF RS.1,36,246/- BEING 5% OF THE GROSS INTER EST AND MISCELLANEOUS INCOME AND DISALLOWED THE BALANCE AMOUNT OF RS.3,49,625/-. ON APPEAL, THE LEARNED CIT(APPEALS) CONFIRMED THE SAID DISALLOWANCE. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT SIMILAR DED UCTION IN RESPECT OF EXPENSES INCURRED WAS CLAIMED BY THE ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES IN THE EARLIER YEARS AND THE LEARNED CIT(APPEALS) V IDE ITS ORDER DATED 27-12-2000 PASSED FOR ASSESSMENT YEAR 1997-98, ALLOWED THE SAI D DEDUCTION CLAIMED BY THE ASSESSEE AT 25% OF THE COMMON ADMINISTRATIVE EXPENS ES AND 50% OF PROFESSIONAL CHARGES AND AUDIT FEES. EVEN IN THE ASSESSMENT YEAR 1999-2000, THE LEARNED CIT(APPEALS) VIDE ITS APPELLATE ORDER DATED 14-10- 2002 HAS ALLOWED SIMILAR DEDUCTION CLAIMED BY THE ASSESSEE UNDER THE HEAD I NCOME FROM OTHER SOURCES FOLLOWING THE APPELLATE ORDER OF HIS PREDECESSOR I N ASSESSEES OWN CASE FOR ASSESSMENT YEAR 1997-98. AS SUBMITTED BY THE LEARNE D COUNSEL FOR THE ASSESSEE AND REMAINED UNCONTROVERTED OR REBUTTED BY THE LEARNED DR, THE APPELLATE ORDERS OF THE LEARNED CIT(APPEALS) GIVING RELIEF TO THE ASSESSEE ON SIMILAR ISSUE IN ASSESSMENT YEARS 1997-98 AND 1999-2000 HAVE BEEN ACCEPTED BY T HE DEPARTMENT AND NO 3 ITA NO. 6887/MUM/2011 APPEALS HAVE BEEN FILED AGAINST THE SAME BEFORE THE TRIBUNAL. AS FURTHER SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE, EVEN IN T HE REMAINING EARLIER YEARS, A SIMILAR DEDUCTION CLAIMED BY THE ASSESSEE HAS BEEN ALLOWED BY THE DEPARTMENT IN THE SUMMARY ASSESSMENTS MADE U/S 143(1). KEEPING IN VIEW THIS PAST HISTORY OF THE ASSESSEES CASE AND FOLLOWING THE RULE OF CONSISTEN CY, WE DIRECT THE AO TO ALLOW THE DEDUCTION OF RS.4,85,872/- U/S 57(III) AS CLAI MED BY THE ASSESSEE. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON 26 TH DAY OF SEPT., 2012. SD/- (VIVEK VARMA) JUDICIAL MEMBER SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER DATED : 26 TH SEPT., 2012 COPY TO : 1. THE ASSESSEE 2. THE RESPONDENT 3. THE CIT(A)-CONCERNED. 4. THE CIT, CONCERNED. 5. THE DR CONCERNED, MUMBAI 6. GUARD FILE BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI