ITO-EXEMPTION-2(2), MUMBAI V. PARMANANDDAS JIVANDAS HINDU GYMKHANA, MUMBAI

ITA 7419/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6598 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 26-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Business expenditure; Rule of consistency

Judgement Text

ITA NO.7418 &7419/MUM/2018 M/S. PARMANANDDAS JIVANDAS HINDU GYMKHAMA ASSESSMENT YEARS :2015-16 & 2014-15 1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.7419/MUM/2018 ( / ASSESSMENT YEAR : 2014-15 ) & ./ I.T.A. NO.7418/MUM/2018 ( / ASSESSMENT YEAR : 2015-16 ) INCOME TAX EXEMPTIONS - 2(2) 502, 5 TH FLOOR, PIRAMAL CHAMBERS, LAL BAUG MUMBAI- 400 012. / VS. M/S. PARMANANDDAS JIVANDAS HINDU GYMKHANA NETAJI SUBHASH ROAD MUMBAI-400 002. ! ./ ! ./PAN/GIR NO. AAACP-3868-Q ( &' /APPELLANT ) : ( ()&' / RESPONDENT ) ASSESSEE B Y : SHRI NEERAJ SHETH-LD.AR REVENUE BY : SHRI SHAILESH KUMAR YADAV-LD.DR / DATE OF HEARING : 15/09/2020 / DATE OF PRONOUNCEMENT : 15/09/2020 / O R D E R PER BENCH 1. AFORESAID APPEALS BY REVENUE FOR ASSESSMENT YEAR S [IN SHORT REFERRED TO AS AY] 2014-15 AND 2015-16 CONTEST SE PARATE ORDERS OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-1, MUMBAI, [IN SHORT REFERRED TO AS CIT(A)], APPEAL NOS. CIT(A)-1/ITO(E)-2(2)/155/ 2016-17 AND APPEAL ITA NO.7418 &7419/MUM/2018 M/S. PARMANANDDAS JIVANDAS HINDU GYMKHAMA ASSESSMENT YEARS :2015-16 & 2014-15 2 NO. CIT(A)-1/ITO(E)-2(2)/39/2016-17 BOTH DATED 28/0 9/2018. THE FACTS ARE STATED TO BE PARI-MATERIA THE SAME IN BOTH THE YEARS. THEREFORE, THE APPEALS WERE HEARD TOGETHER AND ARE NOW BEING DISPO SED-OFF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND B REVITY. 2. THE LD. AUTHORIZED REPRESENTATIVE, AT THE OUTSET , DREW ATTENTION TO THE CONCLUDING PARA OF IMPUGNED ORDER FOR AY 2014-1 5 AND SUBMITTED THAT LD. CIT(A) HAS MERELY FOLLOWED THE ORDER OF TR IBUNAL IN VARIOUS EARLIER YEARS AND THEREFORE, THE SAME WOULD NOT REQ UIRE ANY INTERFERENCE ON OUR PART. THE ADJUDICATION BY LD. CIT(A), AS GAT HERED FROM IMPUGNED ORDER, IS AS FOLLOWS: - 7. DECISION:- I HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISS IONS MADE BY THE APPELLANT. IN THIS CASE, THE AO RELYING ON VARIOUS DECISIONS (SUP RA) HAS TREATED THE APPELLANT'S INTEREST INCOME FROM FIXED DEPOSITS AS INCOME FROM OTHER SOURCES. THE A.R. OF THE APPELLANT DURING THE APPELLATE PROCEEDINGS HAS STAT ED THAT THE HON'BLE TRIBUNAL, MUMBAI, IN THE APPELLANT'S OWN CASE FOR THE ASSESSM ENT YEARS 1985-86, 1986-87 , 1995-96 ,,1998-99 , 2001-02 , 2003-04 , 2005-06 , 2 007-08 , 2009-10 AND 2010-11, HAS TREATED THE INTEREST INCOME FROM FIXED DEPOSITS AS BUSINESS INCOME AND ALLOWED THE APPEAL OF THE ASSESSEE. FURTHER, VIDE ITA NO.66 31 & 6633/MUM/2016 FOR A.YRS. 2012-13 & 2013-14 ALSO THE HON'BLE TRIBUNAL % C' BENCH, MUMBAI HAS ALLOWED THE APPEAL FOLLOWING THE RULE OF CONSISTENCY AND JUDICI AL PRECEDENCE AND UPHELD THE CONTENTION OF THE ASSESSEE THAT THE INTEREST INCOME IS TO BE TAXED UNDER THE HEAD 'BUSINESS INCOME'. THE CIT(A) -1, MUMBAI , HAS ALLO WED THE ABOVE GROUND FOR THE AY 2005-06 , AY 2006-07, AY 2007-2008 , AY 2009-10 , AY 2011-12 , AY 2012-13 AND AY 2013-14 RELYING ON THE ABOVE ITAT ORDERS. IN VIEW OF THE FACT THAT AN IDENTICAL ISSUE IS INVOLVED IN THE EARLIER YEARS, A ND THE SAME HAS BEEN ALLOWED BY HON'BLE TRIBUNAL AND ALSO MY PREDECESSOR, THE AO IS DIRECTED FOLLOW THE DIRECTIONS OF HON'BLE ITAT AND COMPUTE INCOME ACCORDINGLY. THE REVENUE COULD NOT CONTROVERT THE SAME. NO CONTR ARY ORDER / JUDGMENT HAS BEEN PLACED ON RECORD. IN THE ABOVE BA CKGROUND, OUR ADJUDICATION TO THE APPEALS WOULD BE AS GIVEN IN SU CCEEDING PARAGRAPHS. 3. THE MATERIAL ON RECORD WOULD REVEAL THAT AN ASSE SSMENT WAS FRAMED AGAINST THE ASSESSEE FOR AY 2014-15 U/S 143( 3) ON 18/10/2016. ITA NO.7418 &7419/MUM/2018 M/S. PARMANANDDAS JIVANDAS HINDU GYMKHAMA ASSESSMENT YEARS :2015-16 & 2014-15 3 IT TRANSPIRED THAT THE ASSESSEE EARNED INTEREST ON BANK DEPOSITS FOR RS.196.93 LACS AND OFFERED THE SAME AS BUSINESS INCOME . HOWEVER, LD. AO HELD THE SAME TO BE INCOME FROM OTHER SOURCES AND CONSEQUENTLY, THE DEDUCTION OF PROPORTIONATE BUSINESS EXPENDITURE AS CLAIMED BY THE ASSESSEE WOULD NOT BE AVAILABLE. 4. UPON FURTHER APPEAL, LD. CIT(A), FOLLOWING THE E ARLIER ORDERS OF TRIBUNAL FOR VARIOUS YEARS (IN ASSESSEES OWN CASE) , DIRECTED LD. AO TO TREAT THE SAME AS BUSINESS INCOME . AGGRIEVED AS AFORESAID, THE REVENUE IS IN FURTHER APPEAL BEFORE US WITH FOLLOWING GROUN DS: - 1. WHETHER, ON THE FACTS AND IN CIRCUMSTANCES OF THE LAW, ID.CIT(A) ERRED IN ACCEPTING THAT INCOME OF RS.1,96,38,609/- FROM INTE REST ON FIXED DEPOSITS WITH BANK IS BUSINESS INCOME AND NOT AN INCOME FROM OTHER SOU RCES IGNORING THE RATIO OF HON'BLE SUPREME COURT JUDGMENTS IN THE CASE OF BANG ALORE CLUB VS. COMMISSIONER OF INCOME-TAX (255 ITR 465) WHEREIN HON'BLE SUPREME COURT HAS HELD THAT INTEREST EARNED BY ASSESSEE FROM BANKS WOULD NOT FALL WITHIN AMBIT OF MUTUALITY PRINCIPLE AND WILL THEREFORE , BE ELIGIBLE TO INCOME TAX IN HANDS OF ASSESSEE.' ALSO, THE ISSUE IS SUPPORTED BY THE HON'BLE BOMBAY HIGH COURT DECISION IN THE CASE OF CIT VS. COMMON EFFLUENT TREATMENT PLANT (THANE BELAPUR) ASS OCIATION AS REPORTED AT (2016) 328 (ITR) 362(BOM). 2. THAT THE DECISION OF HON'BLE ITAT IN THE CASE OF ASSESSEE FOR A. YS. 2005-06 TO 2007-08, 2009-10 TO 2013-14, ON WHICH THE LD. CIT(A ) RELIED UPON, HAS NOT ACCEPTED BY REVENUE AND APPEAL FILED BEFORE THE HON 'BLE HONBLE COURT/HON'BLE ITAT WHICH IS PENDING FOR ADJUDICATION. 5. UPON PERUSAL OF IMPUGNED ORDER AS WELL AS FROM G ROUNDS OF APPEAL, IT IS QUITE EVIDENT THAT THE ISSUE IS RECURRING ONE AND LEARNED FIRST APPELLATE AUTHORITY HAS MERELY FOLLOWED THE EARLIER ORDERS OF TRIBUNAL IN ASSESSEES OWN CASE FOR BOTH THE YEARS. THEREFORE, NO FAULT COULD BE FOUND IN THE SAME. WE SEE NO REASON TO INTERFERE IN THE IMPUGNED ORDER. ITA NO.7418 &7419/MUM/2018 M/S. PARMANANDDAS JIVANDAS HINDU GYMKHAMA ASSESSMENT YEARS :2015-16 & 2014-15 4 6. RESULTANTLY, BOTH THE APPEALS STAND DISMISSED. ORDER PRONOUNCED ON 15 TH SEPTEMBER, 2020. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 15/09/2020 SR.PS, JAISY VARGHESE $%&'(' / COPY OF THE ORDER FORWARDED TO : 1. &' / THE APPELLANT 2. ()&' / THE RESPONDENT 3. 0 ( ) / THE CIT(A) 4. 0 / CIT CONCERNED 5. 12(+3 , 3 , / DR, ITAT, MUMBAI 6. 245 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.