M/s Bangalore Club, Bangalore V. ITO, Bangalore

ITA 919/BANG/2011

• Counselvise Citation: 91921114 RSA 2011
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 21-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ETWA MUNDA
• Assessee Lawyers: NARENDRA SHARMA
• Section: 147; 234B

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 BANGALORE BANGALORE BANGALORE BANGALORE BENCH BENCH BENCH BENCH C CC C BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI N. N. N. N. BARAT BARAT BARAT BARATH HH HVAJA SANKAR, VICE VAJA SANKAR, VICE VAJA SANKAR, VICE VAJA SANKAR, VICE- -- -PRESIDENT PRESIDENT PRESIDENT PRESIDENT A AA AND NDND ND SHRI SHRI SHRI SHRI N.V.VASUDEVAN N.V.VASUDEVAN N.V.VASUDEVAN N.V.VASUDEVAN, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO.919/BANG/2011 (ASSESSMENT YEAR: 2007-08) M/S.BANGALORE CLUB, NO.10, FIELD MARSHAL K.M.CARIAPPA ROAD, BANGALORE - 25. APPELLANT PAN:AAAAB 1046 L VS. INCOME-TAX OFFICER, WARD 1(1), BANGALORE. RESPONDENT APPELLANT BY: SHRI NARENDRA SHARMA, ADVOCATE. RESPONDENT BY : SHRI ETWA MUNDA, CIT. DATE OF HEARING: 17-07-2012. DATE OF PRONOUNCEMENT: 17-07-2012. O R D E R O R D E R O R D E R O R D E R PER PER PER PER N. BARATHVAJA SANKAR, VP N. BARATHVAJA SANKAR, VP N. BARATHVAJA SANKAR, VP N. BARATHVAJA SANKAR, VP: :: : THIS IS AN APPEAL PREFERRED BY THE ASSESSEE- M/S.BANGALORE CLUB FOR THE ASSESSMENT YEAR 2007-08 AGAINST THE APPELLATE ORDER DATED 16-9-2011 OF THE CIT(A)-I , BANGALORE. 2. 2.2. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF REASSESSMENT IS BAD IN LAW AND VOID AB INITIO FOR WANT OF REQUISITE JURISDICTION ESPECIALLY, THE MANDATORY REQUIREMENT TO ASSUME JURISDICTION UNDER SECTION 147 OF THE ACT DID NOT EXIST AND HAVE NOT B EEN ITA NO.919/BANG/2011 PAGE 2 OF 5 COMPLIED WITH AND CONSEQUENTLY, THE REASSESSMENT REQUIRES TO BE CANCELLED. 2. THE REASON RECORDED BY THE LEARNED ASSESSING OFFICER AMOUNT TO REASON TO SUSPICION AND NOT REASON TO BELIE VE UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE APPELLANT DENIES ITSELF LIABLE TO BE TAXED ON A TOTAL INCOME OF RS.2,29 , 46,950/- AS ASSESSED BY THE LEARNED ASSESSING OFFICER AS AGAINST THE RETURNED INCOME OF RS.19,87,502/- UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE OF THE APPELLANT. 4. THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN LAW IN HOL DING THAT THE INTEREST INCOME ACCRUED / EARNED OUT OF THE FIXED DEPOSITS FROM THE BANKS WHO ARE THE CORPORATE MEMBERS OF THE APPELLANT CLUB HAS TO BE TAXED AND T HE CONCEPT OF PRINCIPLES OF MUTUALITY DOES NOT APPLY TO THE INTEREST RECEIVED ON SUCH DEPOSITS UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN LAW IN HOL DING THAT THE BANKS WHICH THE APPELLANT HAS DEPOSITED IT S FUNDS ARE NOT ITS CORPORATE MEMBERS AND THUS THE CONCEPT OF MUTUALITY IS NOT APPLICABLE ON THE CONTRA RY THE SAID BANKS ARE THE CORPORATE MEMBERS UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. WITHOUT PREJUDICE TO THE MAIN CONTENTION THE LEA RNED AUTHORITIES BELOW ARE NOT JUSTIFIED IN LAW IN NOT AL LOWING THE PROPORTIONATE EXPENDITURE AS AGAINST THE EARNING O F INTEREST UNDER THE FACTS AND CIRCUMSTANCES OF THE CAS E . 7. THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN LAW IN APPRECIATING THE FACT THAT THE DECIS I ON OF THE JURISDICTIONAL HIGH COURT IN THE APPELLANT ' S OWN CASE FOR THE A . Y . 1989-90 WHERE THE IDENTICAL FACTS ARE INVOLVED HAS BEEN STAYED BY THE HON'BLE APEX COURT AND THUS THE AUTHORITIES OUGHT NOT TO HAVE APPLIED THE DECISION O F THE JURISDICTIONAL HIGH COURT'S DECISION WHEN THE MATTER I S SUB-JUDICE BEFORE THE HIGHER FORUM UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. 3.3. 3. AT THE TIME OF HEARING, LEARNED COUNSEL FOR THE ASSESSEE PLACED ON RECORD PAPER COMPILATION 37 PAGE S COMPRISING THEREIN THE FOLLOWING: ITA NO.919/BANG/2011 PAGE 3 OF 5 1. WRITTEN SUBMISSIONS OF THE ASSESS EE DT.17-7-2012. 2. APEX COURT JUDGMENT DT.8 - 9 - 2006 IN CP NO.14470/2006. 3. APEX COURT JUDGMENT DT.5 - 1 - 2007 IN CP NO.14470/2006. 4. JUDGMENT OF THE KARNATAKA HIGH COURT IN WP NO.22445/2004 C/W 16858/2004 DATED 24-8-2006 IN THE CASE OF CHIKKAVEERAPPA VS. THE STATE OF KARNATAKA. 5. JUDGMENT OF THE KARNATAKA HIGH COURT IN TRC NO.17/2000 DATED 21-11-2007 IN THE CASE OF CWT VS.S.N.WODEYAR (HUF). 6. ITAT, BANGALORE BENCH B , ORDER DT. 31 - 10 - 2008 IN WTA NOS.43, 44 & 275/BANG/93 IN THE CASE OF ACIT VS. S.N.WODEYAR. 7. APEX COURT JUDGMENT IN THE CASE OF D.K.TRIVEDI & SONS & OTHERS VS. STATE OF GUJARAT & OTHERS REPORTED IN 1986 (SUPP) SCC 20. 8. ITAT, BANGALORE BENCHA, ORDER DT. 6 - 9 - 2011 IN ITA NOS.791 TO 796/BANG/10 IN THE CASE OF BANGALORE CLUB VS. ITO. 9 ITAT, BANGALORE BENCHB, ORDER DT. 29 - 6 - 2010 IN ITA NO.562/BANG/06 IN THE CASE OF ITO VS. BANGALORE CLUB. BY PLACING THE ABOVE MATERIAL ON RECORD, THE LEARNE D COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CIT(A) HAS DISMISSE D THE ASSESSEES APPEAL FOLLOWING HIS OWN DECISION IN THE CASE OF THE SAME ASSESSEE FOR ASSESSMENT YEAR 2000-01. HE DRE W OUR ATTENTION TO THE DECISION OF THE TRIBUNAL FOR THE A SSESSMENT YEARS 2000-01 AND 2002-03 TO 2006-07 IN THE CASE OF THE SAME ASSESSEE IN ITA NOS.791 TO 796/BANG/2010 ORDER DT.6 -9-2011 AND SUBMITTED THAT IDENTICAL ISSUES IN THE EARLIER YEARS WERE REMITTED TO THE FILE OF THE AO TO DECIDE THE SAME I N ACCORDANCE ITA NO.919/BANG/2011 PAGE 4 OF 5 WITH LAW AFTER GIVING A FAIR OPPORTUNITY OF HEARING . FOR THE ASSESSMENT YEAR 2001-02 ALSO THE REVENUES APPEAL W AS ALLOWED FOR STATISTICAL PURPOSES. HENCE, FOLLOWING THE EARLIER DECISIONS OF THIS TRIBUNAL, PARTICULARLY FOR THE AS SESSMENT YEAR 2000-01 AND 2002-03 TO 2006-07 TO WHICH ONE OF US V IZ., VICE- PRESIDENT, IS A PARTY, THE ISSUE RAISED IN THIS APP EAL SHOULD ALSO BE RESTORED TO THE FILE OF THE AO WITH A SIMILAR DI RECTION. 4. 4.4. 4. WE HAVE ALSO HEARD THE LEARNED DR AND PERUSED TH E MATERIAL ON RECORD. FOLLOWING THE TRIBUNAL ORDER DT . 6-9-2011 FOR ASSESSMENT YEARS 2000-01 AND 2002-03 TO 2006-07 WE RESTORE THE MATTER TO THE FILE OF THE AO WITH SIMILAR DIREC TIONS AS CONTAINED IN THE TRIBUNAL ORDER DATED 6-9-2011. 5. 5.5. 5. THE ASSESSEE HAS ALSO TAKEN ANOTHER GROUND RELAT ING TO CHARGING OF INTEREST U/S 234B OF THE ACT. IN OUR O PINION, IT IS CONSEQUENTIAL IN NATURE AND THE AO SHALL GIVE CONSE QUENTIAL RELIEF WHILE DECIDING OTHER ISSUES WHICH ARE RESTOR ED TO HIM BY US IN THE ABOVE PARAGRAPHS OF OUR ODDER. 6. 6.6. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AT THE CLOSE OF THE HEARING ON 17 TH JULY, 2012 . SD/- SD/- (N. (N. (N. (N.V. V.V. V.VASUDEVAN VASUDEVAN VASUDEVAN VASUDEVAN) )) ) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER (N.BARATHVAJA SANKAR) (N.BARATHVAJA SANKAR) (N.BARATHVAJA SANKAR) (N.BARATHVAJA SANKAR) VICE VICE VICE VICE- -- -PRESIDENT PRESIDENT PRESIDENT PRESIDENT EKS ITA NO.919/BANG/2011 PAGE 5 OF 5 COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) CONCERNED 4. CIT 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE