DCIT, CHENNAI V. Mahindra Holidays & Resorts India Ltd., CHENNAI

MA 62/CHNY/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 8575 (ITAT-CHENNAI)
• Duration Of Justice: 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-07-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 18-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: H P MAHAJANI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI [BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER] M.P.NO.62/MDS/2012 [ARISING OUT OF I .T.A NO.1613/MDS/2011 ] ASSESSMENT YEAR : 2005-06 THE DY. CIT (LTU) CHENNAI VS M/S MAHINDRA HOLIDAYS & RESORTS INDIA LTD C/O M/S SUBBARAYA AIYAR PADMANABHAN 7 RAMAMANI, ADVOCATES 75A, DR.RADHAKRISHNAN SALAI MYLAPORE, CHENNAI 600 004 [PAN AAACM 6469L] (PETITIONER) (RESPONDENT) PETITIONER BY : SHRI SHAJI P. JACOB, ADDL. CIT RESPONDENT BY : SHRI H.P.MAHAJANI, CA DATE OF HEARING : 06-07-2012 DATE OF PRONOUNCEMENT : 13-07-2012 O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS A MISCELLANEOUS PETITION FI LED BY THE REVENUE AGAINST THE ORDER OF THE TRIBUNAL DATED 25.5.2012 I N I.T.A.NO. 1613/MDS/2011. 2. THE MISCELLANEOUS PETITION OF THE REVENUE READ S AS UNDER: THE ABOVE APPEAL WAS DISPOSED OFF BY TRIBUNAL VIDE ORDER DATED 25-05-2012. ON 25-05-2012 IT WAS PRONOUNCED IN THE OPEN COURT THAT BOTH THE APPEALS FILED BY THE ASSESSEE AS WELL AS REVENUE ARE DISMISSED WH ICH IS EVIDENT FROM PARA. 19 OF THE ORDER. HOWEVER, WHEN THE M.P 62/2012 :- 2 -: COPY OF THE ORDER WAS RECEIVED, IT IS SEEN THAT GR. 2 RAISED BY ASSESSEE STANDS ALLOWED. SINCE WRITTEN ORDER CO NTRARY TO PRONOUNCEMENT MADE IN THE OPEN COURT IS A MISTAKE AS HELD BY DELHI HIGH COURT IN CLT VS G . SAGAR SURI & SONS REPORTED IN 185 ITR 484, IT IS PRAYED THAT PARA. 12 OF THE ORDER MAY BE REVISED IN TUNE WITH THE FINDING PRONOUNCED IN THE COURT SINCE ANNOUNCEMENT MADE IN THE OPEN COURT IS THE ORDER OF THE TRIBUNAL AND THE WRITTEN ORDER MERELY CONTAINS THE REASONS FOR IT TO COME TO THE CONCLUSION AS HELD BY THE DELHI HIGH COURT. 2. FURTHER THE BINDING DECISIONS OF THE APEX COURT IN CIT VS CALCUTTA STOCK EXCHANGE ASSOCIATION LTD. (36 ITR 322) AND DELHI STOCK EXCHANGE ASSOCIATION LTD. VS CIT (41 ITR 495) WHICH WERE DISCUSSED IN DETAIL AND FOLLOWED BY PATNA HIQH COURT IN CLT VS UNITED CLUB (161 ITR 853) WHICH WERE RELIED ON BY THE CLT(A) IN HIS ORDER AND D.R DURING THE COURSE OF HIS ARGUMENT WERE NOT CONSIDERED BY THE TRIBUNAL IN ARRIVING AT THE CONCLUSION IN PARA 12 OF ITS ORDER. SINCE NON- CONSIDERATION OF AN EXISTING DECISION OF SUPREME COURT IS A RNISTAKE APPARENT FROM RECORD AS HELD BY HON'BLE SUPREME COURT IN ACLT VS SAURASHTRA KULCH STOCK EXCHANGE LTD. REPORTED IN 305 ITR 227, IS REQUESTED THAT THE ORDER DATED 25-05-2012 MAY BE RECALLED AND RENDER JUSTICE TO THE DEPARTMENT. 3. AFTER HEARING THE RIVAL SUBMISSIONS AND PERUSING THE MATERIALS AVAILABLE ON RECORD, WE FIND THAT THE CONTENTION OF THE REVENUE IS THAT IN THE WRITTEN ORDER OF THE TRIBUNAL DATED 25.5.201 2 THE TRIBUNAL HAS DECIDED GROUND NO.2 OF THE APPEAL OF THE ASSESSEE IN FAVOUR OF THE ASSESSEE WHICH IS CONTAINED AT PARA 12 OF THE ORDER OF THE TRIBUNAL. THE DR HAS STATED THAT WHEN THE ORDER WAS PRONOUNC ED BY THE TRIBUNAL ON 25.5.2012 IT PRONOUNCED THAT THE APPEAL OF THE ASSESSEE AS WELL AS OF THE REVENUE WERE DISMISSED. THIS IS EVIDENCED BY THE RECORDING MADE AT PARA 19 OF THE ORDER OF THE TRIBU NAL. IN THESE M.P 62/2012 :- 3 -: CIRCUMSTANCES, ACCORDING TO THE REVENUE, THERE IS A MISTAKE IN PARA 12 OF THE ORDER OF THE TRIBUNAL WHICH REQUIRES RECTIFI CATION. 4. THE DR ALSO PLACED RELIANCE ON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS G. SAGAR SURI AND SONS, [1990] 185 ITR 484(DEL). 5. THE A.R SUBMITTED THAT THE TRIBUNAL, AFTER CONSIDER ING THE FACTS AS WELL AS THE ARGUMENTS AND THE DECISION OF THE SPECI AL BENCH OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE REPORTED IN 1 31 TTJ 1, HAS ARRIVED AT A DECISION LOGICALLY AND ALLOWED GROUND NO.2 OF THE APPEAL OF THE ASSESSEE. THEREFORE, THERE IS NO MISTAKE A PPARENT FROM THE RECORD IN PARA 12 OF THE ORDER OF THE TRIBUNAL, WHI CH REQUIRES RECTIFICATION. PARA 19 OF THE ORDER OF THE TRIBUNA L CONTAINS A MISTAKE WHICH REQUIRES RECTIFICATION. 6. WE FIND THAT IN PARA 12, THE TRIBUNAL HAS HELD AS U NDER: 12. THE ISSUE IN THE PRESENT APPEAL IS THAT WH ETHER THE AMOUNT RECEIVED ON ACCOUNT OF TIME SHARING UNITS IS TO BE TAXED IN THE YEAR OF RECEIPT WHEN IT IS A FACT THAT SERVICES ARE TO BE RENDERED BY THE ASSESSEE IN SUBSEQUENT YEARS ALSO. IT WAS SUBMITTED THAT IN THE CASE OF GOPAL SARAN NA RAIN SINGH VS. CIT., 31 ITR 237, IT IS HELD THAT ANYTHI NG WHICH CAN BE PROPERLY DESCRIBED AS INCOME IS TAXABLE UN DER THE INCOME TAX ACT UNLESS EXPRESSLY EXEMPTED. IT WAS A LSO SUBMITTED THAT IN THE CASE OF ASHOKA VINIYOGA LTD.V S. CIT., 84 ITR 264 (SC), IT IS HELD THAT THE MODE OR SYSTE M OF BOOK KEEPING CANNOT OVERRIDE THE SUBSTANTIAL CHARACTER OF A TRANSACTION. IT WAS FURTHER SUBMITTED THAT IN THE CASE OF CHOWRANGEE SALES BUREAU PVT. LTD., 87 ITR 542 (SC), IT WAS HELD THAT A TRADING RECEIPT WILL REMAIN A TRAD ING RECEIPT EVEN IF IT IS NOT SHOWN AS TRADING RECEIPT. HE FUR THER M.P 62/2012 :- 4 -: SUBMITTED THAT IN THE CASE OF STERLING HOLIDAY RESO RTS (INDIA) LTD. VS. ACIT., (2007) 295 ITR (AT) 162 (CHENNAI), IT HAS BEEN HELD THAT THERE IS NOTHING IN THE ACT TO PER MIT THE ASSESSEE TO TREAT PART OF THE INCOME AS DEFERRED IN COME AND TO OFFER IT FOR TAXATION AT WILL. THE ABOVE DECISIONS RELIED ON BY THE D.R. HAVE NOT CONSIDERED OR DECIDE D THIS ISSUE. THEREFORE, THESE DECISIONS ARE NOT APPLICABL E TO DECIDE THE ISSUE UNDER CONSIDERATION AND ON THE BA SIS OF THOSE DECISIONS IT CANNOT BE HELD THAT THE DECISION OF SPECIAL BENCH WAS PER INCURIAM. WE THEREFORE RESPECTFULLY FOLLOWING THE DECISION OF THE SPECIAL BENCH, SET AS IDE THE ORDERS OF LOWER AUTHORITIES AND DELETE THE ADDITION MADE BY THE ASSESSING OFFICER AND ALLOW THE GROUND OF APPEA L. 7. THE TRIBUNAL RECORDED AT PARA 19 AS UNDER: IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSE SSEE AS WELL AS REVENUE ARE DISMISSED. 8. AFTER PERUSING THE MATERIALS AVAILABLE ON RECORD, W E DO NOT FIND ANY MISTAKE IN PARA 12 OF THE ORDER OF THE TRIBUNAL. H OWEVER, WE FIND THAT THERE WAS A TYPOGRAPHICAL ERROR AT PARA 19 OF THE O RDER OF THE TRIBUNAL. WE FIND THAT THE TRIBUNAL HAS, AFTER FOLLOWING THE ORDER OF THE SPECIAL BENCH, HAS ALLOWED GROUND NO.2 OF THE APPEAL OF THE ASSESSEE AND ALSO RECORDED SO WHILE DISPOSING THE GROUND OF APPE AL OF THE ASSESSEE. HOWEVER, AT PARA 19, THE TRIBUNAL SHOULD HAVE RECORDED THAT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . DUE TO A TYPOGRAPHICAL ERROR, IT RECORDED THAT THE APPEAL OF THE ASSESSEE IS DISMISSED. WE, THEREFORE, SUO MOTU RECTIFY PARA 19 OF THE ORDER OF THE TRIBUNAL PASSED IN I.T.A.NO. 1613/MDS/2011 AS DISCU SSED ABOVE. M.P 62/2012 :- 5 -: 9. FURTHER, IT IS NOT A CASE WHERE THE TRIBUNAL HAS P ASSED THE ORDER IMMEDIATELY AFTER HEARING BOTH THE PARTIES. IN THI S CASE, THE TRIBUNAL, AFTER HEARING BOTH THE PARTIES, MADE A WRITTEN ORDE R CONTAINING REASONS, HAS ARRIVED AT THE ORDER AND THEN ON THE B ASIS OF SUCH WRITTEN ORDER MADE ORAL PRONOUNCEMENT OF THE ORDER. THE AB OVE FACT IS EVIDENT BY THE FACT THAT WRITTEN ORDER AS WELL AS O RAL PRONOUNCEMENT BOTH WERE MADE ON THE SAME DAY. THUS, THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS G. SAGAR SU RI AND SONS (SUPRA) IS DISTINGUISHABLE ON FACTS AND IS NOT APPLICABLE I N THE INSTANT CASE. THEREFORE, THE MISCELLANEOUS PETITION FILED ON THIS ISSUE IS REJECTED. 10. THE DR ALSO CONTENDED BEFORE US THAT THE DECISION O F THE HON'BLE SUPREME COURT/HIGH COURT MENTIONED BY HIM IN THE WR ITTEN SUBMISSION FILED BEFORE THE TRIBUNAL WERE NOT TAKEN INTO CONSI DERATION BY THE TRIBUNAL WHILE DECIDING GROUND NO.2 OF THE APPEAL O F THE ASSESSEE . THEREFORE, THE ORDER OF THE TRIBUNAL CONTAINS A MIS TAKE APPARENT FROM RECORD. 11. WE FIND THAT THE DECISIONS WHICH WERE RELIED UPON B Y THE DR AT THE TIME OF THE HEARING BEFORE THE TRIBUNAL WERE DULY T AKEN INTO CONSIDERATION BY THE TRIBUNAL AND DISCUSSED IN ITS ORDER. THE DR IN THE WRITTEN SUBMISSION IN RESPECT OF THE ISSUE UNDER CO NSIDERATION HAS WRITTEN AS UNDER: M.P 62/2012 :- 6 -: E.ENCLOSURE COPIES OF THE FOLLOWING DECISIONS ARE ENCLOSED FOR KIND READY REFERENCE. ANNEXURE-1 41 ITR 495 'WHETHER ADMISSION FEES OF MEMBERS OR AUTHORISED AS SISTANTS RECEIVED BY THE ASSESSEE IS TAXABLE INCOME IN ITS HANDS?' (ANSWER-YES) ANNEXURE-2 36 ITR 222 (SC) 'WHETHER SUBSCRIPTION/ENTRANCE FEE RECEIVED FROM MEMBERS SHOULD BE INCLUDED IN THE ASSESSABLE I NCOME OF THE ASSESSEE?' (ANSWER-YES) ANNEXURE-3 161 ITR 853 (PATNA) 'WHETHER ENTRANCE FEE RECEIVED BY THE CLUB AT THE TIME OF ENTRANCE OF THE NEW MEMBER IS A RECE IPT OF REVENUE NATURE AND CHARGEABLE TO TAX IN THE HANDS O F THE CLUB?' (ANSWER-YES) ANNEXURE-4 161 ITR 861 (PATNA) 'WHETHER ENTRANCE FEES ARE IN THE NATURE OF CAPITA L RECEIPTS?' (ANSWER-NO) ANNEXURE-5 ITA NO. 2076 TO 2080/MDS/201 0 ENTRANCE/ADMISSION FEE IS A REVENUE RECEIPT, TAXAB LE AS INCOME. 12. HOWEVER, AT THE TIME OF ORIGINAL HEARING, THE D R MADE ORAL ARGUMENT IN RESPECT OF THE ABOVE GROUND AND IN THE COURSE OF THE ORAL ARGUMENT NEITHER REFERRED TO THE ABOVE DECISIONS NO R EXPLAINED THE ABOVE DECISIONS EVEN DURING THE PRESENT HEARING. THE DR HAS NOT EXPLAINED HOW THE ABOVE CITED DECISIONS ARE APPLICA BLE FOR THE ISSUE INVOLVED IN THIS RELEVANT GROUND OF APPEAL. FROM T HE WRITTEN SUBMISSION OF THE DR WE FIND THAT ALL THE FOUR DECI SIONS RELATE TO ADMISSION FEE OR ENTRANCE FEE IN THE CASE OF CLUB A ND DOES M.P 62/2012 :- 7 -: NOT RELATE TO THE RECEIPT UNDER A TIME SHARING ARRA NGEMENT. THUS, WE FIND THAT THERE IS NO MISTAKE IN THE ORDER OF THE T RIBUNAL WHICH REQUIRES RECTIFICATION ON THIS ISSUE. THEREFORE, THE GROUND RAISED IN THE MISCELLANEOUS PETITION IS DISMISSED. 13. IN THE RESULT, THE MISCELLANEOUS PETITION F ILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY , THE 13 TH JULY,2012. SD/- SD/- (VIKAS AWASTHY) JUDICIAL MEMBER (N.S.SAINI) ACCOUNTANT MEMBER DATED: 13 TH JULY, 2012 RD COPY TO: PETITIONER/RESPONDENT/CIT(A)/CIT/DR