THE POONA CLUB LIMITED,PUNE vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -4, PUNE

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ITA 511/PUN/2020Status: DisposedITAT Pune30 August 2022AY 2015-163 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal noted that the issue was already decided in the assessee's own case by a previous ITAT order, which allowed a 7.5% deduction. Therefore, the Tribunal found no infirmity in the CIT(A)'s order.

What were the facts?

The assessee challenged the CIT(A)'s order regarding the deduction on interest income. The CIT(A) allowed a deduction of up to 7.5% of interest received as expenses for earning such income, following previous ITAT orders.

What were the issues?

Whether the assessee is eligible for a deduction on interest income beyond the 7.5% allowed by the CIT(A) based on previous tribunal orders.

Which sections of the Income-tax Act were involved?

Section 57

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, PUNE

Before: SHRI INTURI RAMA RAO & SHRI S.S. VISWANETHRA RAVI

For Appellant: Shri Neelesh Khandelwal
For Respondent: Shri M.G. Jasnani

आदेश / ORDER

PER S.S. VISWANETHRA RAVI, JM :

1.

This appeal by the assessee against the order dated 13-03-2020 passed by the Commissioner of Income Tax (Appeals)-3, Pune [‘CIT(A)’] for assessment year 2015-16.

2.

The ld. AR submits that the assessee is not interested to prosecute ground Nos. 2 and 3. Hence, the same are dismissed as not pressed.

3.

Ground No. 1 raised by the assessee challenging the action of CIT(A) for not granting of adequate deduction u/s. 57 of the Act on account of interest income in the facts and circumstances of the case.

4.

We note that the CIT(A) discussed the issue from pages 5 to 14 of the impugned order wherein the CIT(A) allowed claim a deduction of upto 7.5% of interest received as expenses for earning such interest income by placing reliance on the order of this Tribunal in assessee’s own case in and ITA No. 1512/PUN/2016 for A.Y. 2010-11. The CIT(A) reproduced the relevant portion of the Tribunal’s order at page No. 14 of the impugned order. The same are as under : “5.5 During the appellate proceedings, the appellant stated that the issue has been decided by the Hon’ble ITAT Pune order in assessee’s own case. The Hon’ble ITAT Pune in its order dated 26/09/2018 in ITA No. 1481/PUN/2016 & ITA No. 1512/PUN/2016 (AY 2010-11), in the case of ACIT, Cir. 4 Pune Vs. M/s. Poona Club Ltd., held that : 11. The Tribunal in the latest order relating to assessment year 2008- 09 (supra) had considered the claim of assessee over and above the deduction claimed out of interest expenditure and held that the assessee was not eligible for claiming any deduction under section 57(iii) of the Act over and above the deduction earlier allowed by the Tribunal in assessee’s own case to the extent of 7.5%. Following the same parity of reasoning, grounds of appeal

No.1 to 4 raised by the assessee are thus, partly allowed. All the other grounds of appeal are not pressed, hence the same are dismissed as not pressed. Similarly, the Hon’ble ITAT, Pune in the appellant’s case for A.Y. 2010-11, in ITA No. 1481/PUN/2016 in order dated 26/09/2018, held that :-

11. The Tribunal in the latest order relating to assessment year 2008- 09 (supra) had considered the claim of assessee over and above the deduction claimed out of interest expenditure and held that the assessee was not eligible for claiming any deduction under section 57(iii) of the Act over and above the deduction earlier allowed by the Tribunal in assessee’s own case to the extent of 7.5%. Following the same parity of reasoning, grounds of appeal No.1 to 4 raised by the assessee are thus, partly allowed. All the other grounds of appeal are not pressed, hence the same are dismissed as not pressed.

16. The Tribunal in assessment year 1994-95 (supra) had elaborately considered the plea of assessee in this regard and held that the said charges received from guest of members were exempt on the ‘principle of mutuality’. The said principle has been applied in later years by the Tribunal i.e. assessment year 1995-96 (supra). Following the same parity of reasoning, we find no merit in the grounds of appeal raised by the Revenue.

Thus, Hon’ble ITAT Pune has already decided that the appellant can claim a deduction of upto 7.5% from interest receipt as expenses for earning this interest income. Therefore, respectfully following the decision of the Hon’ble ITAT Pune, the addition of Rs.25,81,565/- is deleted and Ground No. 1 of the appellant is ALLOWED. As the issue has been decided by the Hon’ble ITAT the Additional Ground No. 1 is DISMISSED.”

5.

The ld. AR fairly conceded that the said issue is covered against the assessee by the order of this Tribunal. The ld. AR did not bring on record any contrary view to the order passed by this Tribunal in assessee’s own case. Thus, we find no infirmity in the order of CIT(A) and it is justified. Thus, the ground No. 1 raised by the assessee is dismissed.

6.

In the result, the appeal of assessee is dismissed.

Order pronounced in the open court on 30th August, 2022.

Sd/- Sd/- (Inturi Rama Rao) (S.S. Viswanethra Ravi) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ददिांक / Dated : 30th August, 2022. रधव आदेश की प्रधतधलधप अग्रेधर्त / Copy of the Order forwarded to : अपीलार्थी / The Appellant. 1. प्रत्यर्थी / The Respondent. 2. 3. The CIT(A)-3, Pune. 4. The Pr. CIT-2, Pune. धवभागीय प्रधतधिधि, आयकर अपीलीय अधिकरण, “बी” बेंच, 5. पुणे / DR, ITAT, “B” Bench, Pune. गार्ा फ़ाइल / Guard File. 6. //सत्याधपत प्रधत// True Copy// आदेशािुसार / BY ORDER,

वररष्ठ धिजी सधचव / Sr. Private Secretary आयकर अपीलीय अधिकरण ,पुणे / ITAT, Pune

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