ITO 5(2)(3), MUMBAI vs. MALABAR HILLS CLUB LTD, MUMBAI

O R D E R PER S. RIFAUR RAHMAN (AM)

1. This appeal is filed by the revenue against order of the Learned Commissioner of Income Tax (Appeals)–10, Mumbai [hereinafter in short “Ld.CIT(A)”] dated 02.03.2015 for the A.Y.2010-11.

3. Assessing Officer observed that assessee has received ₹.335,01,200/- as entrance fees from the ordinary members who opted for life membership and ₹.172,66,375/- as entrance fees from the life members totaling to ₹.502,67,575/-. He observed that assessee has considered only an amount of ₹.75,64,875/- as income of the said total entrance fees received. However, Assessing Officer interpreted the High Court decision in a different manner as done in the earlier AY’s by the respective predecessors. Accordingly, he treated 80% of the entrance fees as revenue income and added the same as income of the assessee. Further, the assessee received corporate membership of ₹.6500,000/- out of which a sum of ₹.25,06,000/- has been declared as income in the P&L

(A.Y: 2010-11) M/s. Malabar Hill Club Limited account, which is less than 80%. Accordingly, he added back the balance amount of ₹.26,94,000/- as income from the entrance fees.

4. Aggrieved, the assessee preferred an appeal before Ld.CIT(A)-10, Mumbai and before him filed a detailed submissions, for the sake of clarity, it is reproduced below:

“'1:0 Re.: Addition of Rs. 138,13,100/- towards the fees received from life members:

1. 1. The issue at hand viz, determination of the portion of entrance fees received from life members as taxable income for the year has been decided by the Hon'ble Bombay High Court in Appellant's own case - refer page No. 20 to 25 of the compilation.

2. In this connection we invite your Honour's attention to the following directions / decision of the High Court wherefrom it is clearly evident that the said directions were on the basis of the entrance fees for life membership and ordinary membership for the years before the Court and not on the basis of any percentage and/or ratio as has been sought to be made out by the Assessing Officer. "The assessment years in question are assessment years 1963-64 and 1964-65. The categories of members of the assessee-club are: (1) honorary members, (2) life members. (3) ordinary members, (4) temporary members, (5) service members. and (6) associate members. Under the articles of association of the club entrance fees are payable by life members and ordinary members of such respective amount as may from time to time be determined by the executive committee. During the assessment years in question the entrance fees for life members was Rs. 2,500 and the entrance fee for ordinary members was Rs.

4. As per the directions of the High Court the entrance fees received during the year from life members (other than the ones being ordinary members who choose to become life members during the year) is to be broken up into two parts. a. An amount equal to the entrance fees paid by the ordinary members is to be treated as a 'capital receipt and b. The balance amount is to be treated as the income of the Appellant.

5. To put it in other words. the Hon'ble High Court had directed that: a. In case of an ordinary member opting to become a life member during the year under consideration the whole amount should be taxed. b. In case of newly admitted life members:

(A.Y: 2010-11) M/s. Malabar Hill Club Limited i) the amount of entrance fees paid by an ordinary member at that point in time should be treated as a capital receipt; and ,a ii. The balance amount should be considered as taxable income.

6. Applying the aforesaid the Appellant had, while returning its income for the year: a. Offered to tax the whole amount received by it from ordinary members who had opted to become life members; and b. Divided the amount received from life members into two parts: i. One to the extent the same equated to the entrance fees paid by an ordinary member the same was treated as a capital receipt; and ii. The balance amount was considered as taxable.

8. The Assessing Officer's computation to arrive at the figure of addition is as under: Amount considering the Assessment Amount Basis of Particulars Order — (refer page (Rs.) determination No.-- of the impugned Order) Entrance fees received during the year from Life members 1,72,66,375/- 80% of 1,38,13,100/- ₹.1,72,66,375/- Ordinary 3,35,01,200/- 80% of 2,68,00,960/- members ₹.3,35,01,200/- Total 5,07,67,575/- 4,06,14,060/-

(A.Y: 2010-11) M/s. Malabar Hill Club Limited 9. The aforesaid addition has been made on the basis of following observations /contentions and the Appellant’s rebuttal to the same are as under: Reference to Assessing Officer's Appellants Assessment observations (verbatim) submissions to the Order same Paragraph 4.1 on The assessee vide its Her, it is submitted that page 3 submissions through its the appellant has authorised representative offered to tax the entire dated vide appendix “I” the amount of fees details of membership / collected from ordinary entrance fees received during members who have the year from life member opted to become life and ordinary members. On members as has been perusal of the said appendix held by Hon'ble it is seen that out of the total Bombay High Court in collection of Rs. 5,07, 67, its own case. 575/- received, the assessee Further, the details of has offered to tax a sum of amount so offered to Rs. 75,64,875/- as income tax vis--vis ordinary out of life membership. members who had Thus no amount is offered to opted for life tax out of the sum collected membership were from the ordinary members submitted before the who have opted to become Assessing Officer under life members cover of our letter dated 11 December 2012 (refer page no. 26 to 31 of the compilation) and the details pertaining of membership fees offered to tax in relation to ordinary members who had opted for membership were marked as converted members. Paragraph 4.1 on The assessee has not The Appellant was page 3 furnished the basis of taking never called upon to the amount of Rs. submit the basis of 75,64,875/- out of entrance taking the amount of fees for life member and has Rs. 75,64,875i- OW of not taken anything out of entrance fees from life

(A.Y: 2010-11) M/s. Malabar Hill Club Limited Reference to Assessing Officer's Appellants Assessment observations (verbatim) submissions to the Order same entrance fee for ordinary members and offering member during the relevant the same to tax. A Y. The Appellant was only called upon to submit the details of entrance fees received from members along with an explanation as to why the same are not taxable vide Notice dated 08 November 2012 issued u/s. 142(1) of the Income-tax Act, 1961 - a copy of the said notice is already forwarded herewith as "Appendix -C" - refer page nos. 32 to 33 of the compilation. The aforesaid details called for were submitted under the cover of the Appellant's representatives letter dated 11 December 2012 - a copy of the said letter is already forwarded as 'Appendix - B" (refer page No. 26 to 31 of the compilation). Thereafter, during the course of the assessment proceedings no further details/particulars were called for in the matter – a photocopy of the proceeding sheet maintained by the aurhorized

(A.Y: 2010-11) M/s. Malabar Hill Club Limited Reference to Assessing Officer's Appellants Assessment observations (verbatim) submissions to the Order same representative of the appellant recording the proceedings before the Assessing Officer evidencing the same sis forwarded herewith – refer “Appendix – Dividend” (Page No. 34 to 36 of the Compilation).

10. In light of above, it/s submitted and it will be appreciated that the impugned addition has been made by the Assessing Officer without examining the details / particulars filed during the course of assessment proceedings and misinterpreting/wrongly applying the decision of Hon'ble Bombay High Court in Appellant's own case wherein the principles of determination of portion of entrance fees which should be considered as 'taxable income' has been laid down.

11. Lastly, we would also like to point out that similar additions (i.e. 80% of entrance fees received from life members) were sought to be made by the Assessing Officer in the Assessment Years 2003- 04 to 2008-09 and the said issue stands decided in favour of the Appellant by the 'Orders passed by the Commissioner of Income-tax (Appeals) for these years - photocopies of the said Orders are forwarded herewith - refer "Appendix-- E" (page No. 37 to 94 of the compilation). In view of the foregoing it is submitted and it will he appreciated that the Appellant has strictly followed the directions of the Hon'ble Bombay High Court as has been done in the earlier several years and hence the impugned addition of Rs. 1,38,13.1001- made to the returned income is misconceived, erroneous, incorrect, illegal and ought to be struck down and we request your Honour to direct the Assessing Officer to delete the addition so made by h/in and to re- compute its total income accordingly. Without prejudice to the above.' 2:0 Re.: Double taxation of Rs 75,64,8751/- being fees received from life members and offered to tax y the Appellant.:

(A.Y: 2010-11) M/s. Malabar Hill Club Limited 1. The Assessing Officer in his impugned Order has made an addition of Ps. 1,38,13.100/- (being 80% of 1,72,66,375/-) towards entrance fees received from the life members.

2. However, while doing so, the entrance fees of Rs. 75,64,874/- suo-moto offered to tax by the Appellant in its return of income have not been reduced by the Assessing Officer and this amounts to double taxation of income to the extent of Ps. 75,64.874/- suo-moto offered to tax by the Appellant.

3. The Appellant had preferred an rectification application u/s. 154 of the Income-tax Act 1961 inter-al/a pointing out the aforesaid mistake apparent on record - a photocopy of the said rectification application is forwarded herewith - refer "Appendix - F (page No. 95 to 102 of the compilation).

4. The said rectification application has been disposed off by the Assessing Officer vide 'Order' dated 15 July 2013 passed u/s. 154 of the Income-tax Act, 1961 without commenting upon the double taxation of entrance fees received from life member to the extent of Rs, 75,64,874/- suo - mob o offered to tax by the Appellant - a photocopy of said 'Order is also forwarded herewith — refer "Appendix - G" (page No. 103 to 104 of the compilation).

5. The Appellant has also preferred an appeal against the 'Order' dated 15 July 2013 passed u/s. 154 of the Income-tax Act, 1961, which appeal, is pending adjudication. Lastly, in this connection it is submitted and it will be appreciated that in the event it is held that 80% of entrance fees received from life members is taxable income for the year then a deduction to the extent of sum of Rs. 75,64,874/- suo-moto offered to tax by Appellant in its return of income be granted. 3:0 Re.: Treating entrance fees received from the ordinary members as taxable receipt.

1. The members opting for ordinary membership pay a onetime entrance fees which are non- refundable and also pay annual subscription fees for availing membership benefits.

2. During the year under consideration, the Appellant had received an amount of Rs 3,35,01,200/- as entrance fees from the ordinary members which has been capitalized and credited/transferred to the 'Entrance Fees Reserve' in the Balance Sheet - a photocopy of annual accounts of the Appellant for the year is forwarded herewith — refer "Appendix-H" (page No. 105 to 152 of the compilation).

(A.Y: 2010-11) M/s. Malabar Hill Club Limited 3. In terms of the impugned Assessment Order, the Assessing Officer has considered 80% of entrance fees received from the ordinary members as taxable income of the Appellant for the year.

4. The aforesaid addition has been made by the Assessing Officer in complete disregard/misinterpretation/misapplication of the decision of Hon'ble Bombay High Court in its own case reported in (1982) 136 ITR 569.

5. In this connection it is submitted that in terms of the aforesaid decision it has been clearly laid down that the membership fees received from ordinary members is in the nature of capital receipt and hence not taxable — the relevant extract of the judgment of Hon'ble Bombay High Court in the Appellant's case is reproduced hereunder for your Honour's ready reference: "The acquisition of right as an ordinary member is done by the payment of the entrance fee of Rs. 500 in the relevant assessment years. In lieu of this payment of the entrance fee, a member does not get any return in the form of any services or amenities. All that he gets is a right to avail of the amenities or facilities provided by the club on a payment of the annual subscription. This right can be exercised by him as long as the Membership is not determined as provided by article 44. This receipt of Rs. 500 received by the club is a return for vesting a right of membership in the member and, therefore. in our view, the entrance fee would clearly be in the nature of a capital receipt in the hands of the assessee."

7. In fact, the basis of determining the portion of entrance fees received from life members as 'capital receipt' and 'revenue receipt' as has been laid down by the Hon'ble Bombay High Court in the case of the Appellant is the entrance fees received from ordinary members and to the extent of entrance fees received from ordinary members, the fees received from life members is in the nature of a capital receipt.

8. This further clearly brings out the fact that one-time entrance fees received from ordinary members is in the nature of capital receipt and hence no portion thereof by any stretch of imagination can be brought to tax.

(A.Y: 2010-11) M/s. Malabar Hill Club Limited 9. The Assessing Officer has, however, in terms of the impugned Order considered 80% of the entrance fees received from ordinary members as taxable income for the year in complete disregard/misinterpretation of the decision of Hon'ble jurisdictional High Court in the Appellant's own case.

10. The Appellant had preferred an rectification application u/s.154 of the Income-tax Act 1961 inter-alia pointing out therein that taxing the entrance fees received from ordinary members is an mistake apparent on record — a photocopy of the said rectification application is already forwarded herewith as "Appendix - F" (page No. 95 to 102 of the compilation).

2. Accordingly, the membership fees received from the corporate members is apportioned/recognized as income over the period of membership (i.e.10 years).

3. The rationale for apportioning/recognizing the membership fees received from corporate members over the period of membership is as under- (A.Y: 2010-11) M/s. Malabar Hill Club Limited • Lump-sum fees are received from the corporate members upfront at the time of admission; • Tenure of corporate membership is fixed/limited for 10 years; • No annual subscription is received from the corporate members; • since the membership period of corporate members is fixed for 10 years, the lump-sum membership fees received by the Appellant is recognized as income over the period of 10 years following the principles of matching concept i.e. recognizing revenue over the period for which membership is offered to the corporate members A photocopy of the annual accounts of the Appellant is already forwarded herewith as "Appendix -H" (page No. 105 to 152 of the compilation).

4. Accordingly, the Appellant had recognized and offered to tax a sum of Rs. 25,06,0001- out of corporate membership fees received during the year under consideration. During the course of assessment proceeding the details of entrance fees received from the corporate members and the basis of apportioning the entrance fees received from corporate members was ca/led for and the said details ca/led for were submitted under cover of our letters dated 11 December 2012 and 17 December 2012 - a copy each of the said letters alongwith relevant enclosures thereto is forwarded herewith - refer "Appendix —I". (page No. 153 to 158 of the compilation).

(A.Y: 2010-11) M/s. Malabar Hill Club Limited 2. In this connection it is submitted that in so far as membership fees received from corporate members is concerned, the Appellant offers to tax the entire amount of lump-sum fees received from corporate members over the period of tenure of the membership (i.e. 10 years) following the principles of matching concept and no portion of membership fees has heel? claimed to be in the nature of a capital receipt since unlike the ordinary and life members where the period of membership is not limited in the case of the corporate membership the tenure of membership is fixed i.e. it's for 10 years only.

3. Further, in terms of section 145 of the Income-tax Act, 1961 the income under the head 'profits or gains of business or profession' has to be computed on the basis of method of accounting regularly followed by the Appellant.

6. The aforesaid position too has been accepted and followed consistently and continuously all along for all of the earlier years by the lower authorities.

7. Attention in this regard is invited to the decision of Supreme Court in the case of Madras Industrial Investment Corporation Ltd. v/s. CIT (1997) 91 Taxman 340 wherein considering the principle of matching concept has been accepted.

10. Here, it submitted and it will be appreciated that the principles laid down by the Hon'ble Bombay High Court in the case of the Appellant vis-a-vis the determination of portion of fees received from ordinary and life members as taxable income has no relevance and hence cannot be applied in the case of corporate members — since in the case of the corporate members — the period of membership is pre- determined and the entire membership fees received from them is offered to tax over the period of membership. Lastly, in this connection we invite your Honour's attention to the recent decision of the Supreme Court in the case of CIT v/s. Excel Industries Ltd. (2013) 38 taxmann.com 100 (decision rendered on 08 October 2013 — copy forwarded herewith — refer "Appendix - J" page No.159 to 164 of the compilation) wherein inter-alia it has observed that where the dispute was only as to the year of taxability and the rate of tax remained the same the dispute raised by the Revenue is entirely academic or at best may have a minor tax effect and therefore there is no need for the Revenue to continue with this litigation. In view of foregoing it is submitted and it will be appreciated that the corporate membership has been rightly offered to tax by the Appellant over the period of membership and the impugned addition made by the Assessing Officer is misconceived, erroneous, incorrect, illegal and ought to be struck down and we request your Honour to direct the Assessing Officer to delete the addition so made by him and to re-compute its total income accordingly. Without prejudice to the foregoing it is submitted before your Honour that in the event it is held that 80% of corporate membership received during the year is taxable income for the year then consequential relief be granted in the subsequent years when the same have been offered to tax following the principles of matching concept.”

5. After considering the detailed submissions of the assessee, Ld.CIT(A) decided the above issues in favour of the assessee and observed as under: - ”Ground Nos.1 to 3 are regarding the old recurring dispute in the case of the appellant regarding the taxability of membership fees. It

(A.Y: 2010-11) M/s. Malabar Hill Club Limited is the stand of the appellant from year to year that the issue is settled by the order of Hon’ble Bombay High Court in the case of the appellant itself in A.Ys.1963-64 and 1964-65, wherein it was clearly held by the Hon’ble High Court that in the case of life member the entrance fees of Rs.500/- as paid by the ordinary member will be held as capital receipt and the remaining amount of Rs.2,000/- out of total fees of Rs.2,500/- will be taxed as revenue receipt. It is noted that in earlier years also the AO has interpreted the order of Hon’ble High Court in a different way by stating that as per the spirit of the aforesaid order, 80% should be the revenue receipt (as Rs.2,000/- out of Rs.2,500/- is 80%) and the remaining 20% should be treated as capital receipt. After perusing the order of Hon’ble High Court, my predecessors in earlier years have agreed with the contention of appellant that the Hon’ble High Court has not given any percentage- wise bifurcation of fees received from life members, rather it states that entrance fees taken from ordinary member will be capital receipt and annual subscription will be revenue receipt. It was a coincidence that during the period which was before Hon’ble High Court the ratio of entrance fees and remaining amount was 20:80. In this regard, the findings of my predecessor in the preceding A.Y.2006-07 which was also followed in later years also, are reproduced for clarity - “The only dispute in appeal is what portion of the entrance fees received by the Appellant from persons at the time of admitting them as life members are taxable receipts. The issue has been settled by the Bombay High Court in its own case in assessment year 1963-64 and assessment year 1964- 65 (136 ITR 569). Bombay High Court held that the entrance fee par by the life members equivalent to the amount collected from ordinary members is a capital receipts not liable to tax and the balance amount is in fact compounded payment in lieu of annual subscriptions and therefore are revenue receipts. Thus it will be seen that Bombay High Court has not laid down any ratio for the purpose of splitting entrance fee between revenue and capital receipt. Therefore, the Assessing Officer was wrong in splitting the fee received from life members into capital and revenue receipts in 20:80 ratio. That part of the entrance fee collected from life members, which collected from ordinary members, is to be treated as capital receipts and over and above this amount is to be treated as compounded value of annual subscriptions and therefore thus part is a taxable receipts as held by Bombay High Court. Accordingly, the Assessing Officer was not justified in making an addition of Rs.5,76,000/ to the income of the Appellant an account of subscriptions transferred from the advance subscription account of ordinary members to the (A.Y: 2010-11) M/s. Malabar Hill Club Limited life members subscription account. This ground of the appeal of the Appellant is allowed.” I agree with the finding of my predecessor which has also been followed by the CIT(A) in subsequent years also, that the Hon’ble High Court in the case of the appellant has held that the equivalent amount of entrance fees paid by an ordinary member will be treated as capital receipt in the case of a life member and rest of the payment will be treated as revenue receipt. Accordingly, following the principle laid down by the Hon’ble Bombay High Court in letter and spirit, the AO is directed to treat the equivalent amount of entrance fees of ordinary member as capital receipt in the case of life members and tax the remaining amount as revenue receipt instead of using the formula of 20:80, as has been done in the assessment order. This ground is accordingly, statistically allowed. Ground No. 4 is regarding the addition of Rs.26,94,000/- on account of the receipts from corporate members. The AO has applied the same formula of 80:20 in the case of the receipts from corporate members, whereas it is the claim of the appellant that the issue of taxability of corporate membership was not decided by the Hon’ble Bombay High Court and in the earlier years the department has regularly accepted the accounting of 1/10 of corporate membership fees as revenue receipts for a period of 10 years because the corporate members does not pay any entrance fee and their membership last for 10 years only. After considering the rival submission, particularly the fact that the membership fees for corporate is for 10 years, it appears quite reasonable to equally tax 1/ 10th of receipts every year as has been done by the appellant and has also been accepted by the department in earlier years. Under these circumstances, the AO is directed to delete the addition made by applying the formula of 80% revenue receipts and 20% capital receipts out of corporate membership.

6. Aggrieved with the above order, the revenue is in appeal before us raising following grounds of appeal: - “1(i) “On the facts and circumstances of the case and in law, the Ld.CIT(A) erred in directing the Assessing Officer to treat the equivalent amount of entrance fees of ordinary member as capital receipt in the case of life members and tax the remaining amount as revenue receipt without appreciating the ratio of 20:80 as is done in assessment order?”

(A.Y: 2010-11) M/s. Malabar Hill Club Limited ii) The Ld.CIT(A) further erred in ignoring that the Hon'ble Jurisdictional High Court decided the said issue in favour of the Revenue for earlier years in assessee’s own case?” 2. “On the facts and circumstances of the case and in law, the Ld.CIT(A) erred in deleting the entire addition of RS26,94,000/on account of lump-sum entrance fees received from corporate members by ignoring the Assessing Officer's detailed findings given in assessment order. The appellant prays that the order of the Ld. CIT (Appeals) be set aside and the order of the AO be restored.”

7. Considered the rival submissions and material place on record. We observe that this issue under appeal is decided by the coordinate bench in favour of the assessee in the earlier years. In the recent decision of the ITAT is placed on record, in which the coordinate bench has decided as under:- “5. Now coming to the appeal filed by the revenue, it is pleaded by learned DR that the membership fees received by the assessee club is liable to be taxable in view of the judgement Hon’ble Bombay High Court but the said judgement has not produce before the Bench. However, it is also pleaded that the 80% entrance fees received from the life member was liable to be taxable. As mentioned above in support of this contentions no material has been placed on record. However, learned counsel for the assessee submitted that this issue has now covered by the order of the CIT(A) for the A.Y.2005-06 who decided this issue in favour of the assessee relying upon the Bombay High Court judgement in the assessee’s own case for the year 1963-64 and 1964-65 cited in 136 ITR 569. In the said judgement allocation of relevant receipts in the ratio of 20:80 on life membership receipts i.e. capital receipts and revenue receipts was decided by the Hon’ble Bombay High Court. The said ratio is relevant for that year under consideration and is not universally applicable for all the assessment year of the assessee. The ratio laid down by the Hon’ble Bombay High Court should be properly appreciated. After hearing both the parties we are reproducing the extract of the said para page 7 of the learned CIT(A) order as under:

(A.Y: 2010-11) M/s. Malabar Hill Club Limited The only dispute in appeal is what portion of the entrance fees received by the Appellant front persons at the time of admitting them as life members are taxable receipts. The issue has been settled by the Bombay High Court in its own case in assessment year1963-64 and assessment year 1964- 65 (136 ITR 569). Bombay High Court held that the entrance fee paid by the life members equivalent to the amount collected from ordinary members is a capital receipts not liable to tax and the balance amount is infact compounded payment in lieu of annual subscriptions and therefore are revenue receipts. . Thus it will be seen that Bombay High Court has not laid down any ratio for the purpose of splitting entrance fee between revenue and capital receipt. Therefore, the Assessing Officer was wrong in splitting the fee received from life members into capital and revenue receipts in 20 : 80 ratio. That part of the entrance fee collected from life members, which collected from ordinary members, is to be treated as capital receipts and over and above this amount is to be treated as compounded mille of annual subscriptions and therefore this part is a taxable receipts as held by Bombay High Court. Accordingly the Assessing Officer was not justified in making an addition of Rs.5. 76,000/- to the income of the Appellant on account of subscriptions transferred from the advance subscription account of ordinary members to the life members subscription account. This ground of the appeal of the Appellant is allowed. 5.2. I have considered the facts and the submissions made by the Authorized representative. Since the facts are same and issue is identical, I do not find any reason to deviate from the stand taken by my predecessor and accordingly hold that the addition made by the Assessing Officer is not justified. The ground of appeal is, therefore allowed. From the above, learned CIT(A) merely followed his processed order who reliance upon the judgement of Hon’ble Bombay High Court for the A.Y.1964-65(Supra). Requirement of splitting up of the entrance fee collected from life members in the ratio 20:80 is not the ratio of the cited judgement. To that extent, the decision of the learned CIT(A) is in order. Considering the above learned DR has not brought anything on record to show how the impugned order of learned CIT(A) decided on the strength of Bombay High Court judgement is not fair. We find the order of learned CIT(A) does not call for any interference. Thus, the ground raised by the revenue is dismissed.

6. In the result, the appeal of the revenue and cross objection of the assessee are hereby dismissed.”

(A.Y: 2010-11) M/s. Malabar Hill Club Limited We find that in the aforesaid order of the Tribunal, the decision from Hon'ble Bombay High Court in the case of the assessee for Assessment years 1963-64 and 1964-65 (136 ITR 569) (Bom.) was duly considered and hold that the ration of the decision is not applicable to the facts under consideration for the year under appeal. Hon'ble Bombay High Court has not laid down any ratio for the purpose of splitting entrance fee between revenue and capital receipt. The ld. DR has not brought any contrary facts/case laws in his favour, therefore, following the aforesaid decisions of the Tribunal, we find no infirmity in the conclusion drawn by the Ld. Commissioner of Income Tax (Appeal). It is affirmed, resulting into, dismissal of appeal of the Revenue. Finally, the appeal of the Revenue is dismissed.”

8. Respectfully following the above decision, we are inclined to agree with the findings of Ld.CIT(A) and accordingly, we dismiss the ground raised by the revenue in this regard.

9. With regard to ground no 3 raised by the revenue regarding entrance fees from the Corporate members, we observe that this issue also covered in favour of the assessee considering the fact that revenue accepted the 1/10 of the entrance fees from corporate membership collection as income in the earlier assessment years since the corporate membership is valid for 10 years only and they don’t pay any yearly entrance fees. Ld.CIT(A) has held that this appears quite reasonable and this was also accepted by the department in the earlier AYs. In our considered view this issue also covered in favour of the assessee, therefore, we are inclined to accept the findings of the Ld.CIT(A) in this (A.Y: 2010-11) M/s. Malabar Hill Club Limited regard and accordingly, the ground no 3 raised by the revenue is dismissed.

Order pronounced in the open court on 22.04.2022.