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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
Before: HON’BLE SHRI MAHAVIR SINGH, VP & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
ITA No.7418 &7419/Mum/2018 M/s. Parmananddas Jivandas Hindu Gymkhama Assessment Years :2015-16 & 2014-15 No. CIT(A)-1/ITO(E)-2(2)/39/2016-17 both dated 28/09/2018. The facts are stated to be pari-materia the same in both the years. Therefore, the appeals were heard together and are now being disposed-off by way of this common order for the sake of convenience and brevity.
The Ld. Authorized Representative, at the outset, drew attention to the concluding para of impugned order for AY 2014-15 and submitted that Ld. CIT(A) has merely followed the order of Tribunal in various earlier years and therefore, the same would not require any interference on our part. The adjudication by Ld. CIT(A), as gathered from impugned order, is as follows: - 7. Decision:- I have considered the facts of the case and submissions made by the appellant. In this case, the AO relying on various decisions (supra) 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 stated that the Hon'ble Tribunal, Mumbai, in the appellant's own case for the assessment years 1985-86, 1986-87 , 1995-96 ,,1998-99 , 2001-02 , 2003-04 , 2005-06 , 2007-08 , 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 & 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 judicial 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 allowed 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, and 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 contrary order / judgment has been placed on record. In the above background, our adjudication to the appeals would be as given in succeeding paragraphs.
The material on record would reveal that an assessment was framed against the assessee for AY 2014-15 u/s 143(3) on 18/10/2016. &7419/Mum/2018 M/s. Parmananddas Jivandas Hindu Gymkhama Assessment Years :2015-16 & 2014-15 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.
Upon further appeal, Ld. CIT(A), following the earlier orders of Tribunal for various years (in assessee’s 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 grounds: -
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 interest on fixed deposits with bank is business income and not an income from other sources ignoring the ratio of Hon'ble Supreme Court judgments in the case of Bangalore 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) Association 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 Hon’ble Court/Hon'ble ITAT which is pending for adjudication.
5. Upon perusal of impugned order as well as from grounds 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 assessee’s 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. &7419/Mum/2018 M/s. Parmananddas Jivandas Hindu Gymkhama Assessment Years :2015-16 & 2014-15
6. Resultantly, both the appeals stand dismissed. Order pronounced on 15th September, 2020.
Sd/- Sd/- (Mahavir Singh) (Manoj Kumar Aggarwal) उपा�� / Vice President लेखा सद� / Accountant Member मुंबई Mumbai; िदनांक Dated : 15/09/2020 Sr.PS, Jaisy Varghese आदेशकी�ितिलिपअ�ेिषत/Copy of the Order forwarded to : अपीलाथ�/ The Appellant 1. ��थ�/ The Respondent 2. आयकरआयु�(अपील) / The CIT(A) 3. आयकरआयु�/ CIT– concerned 4. िवभागीय�ितिनिध, आयकरअपीलीयअिधकरण, मुंबई/ DR, ITAT, Mumbai 5. गाड�फाईल / Guard File 6. आदेशानुसार/ BY ORDER,