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Income Tax Appellate Tribunal, MUMBAI BENCHES “D”, MUMBAI
Before: Shri D T Garasia & Shri N K Pradhan
O R D E R Per D T Garasia, Judicial Member:
These appeals have been filed by the Revenue against the orders of CIT(A)-14, Mumbai, both dated 29.09.2015, relating to assessment years 2010-11 & 2011-12. Since identical issue is involved in both these appeals, they were heard together and are being disposed of by this common order.
The only ground taken in these appeals reads as under:
“On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in treating the entrance fees received from Pits member as capital receipts ignoring the fact that facilities that are made available to the members are done in the normal course of its business as the assessee is engaged in the business of race course.”
We shall take up the appeal for A.Y. 2010-11. The short facts of the case are that the assessee is in the business of conducting horse racing, turf club house and providing hospitality services to its members. During the year under consideration the assessee has credited an amount of `.5,71,47,250/- to the general reserves, which has not been offered for taxation claiming it to be capital receipt. The amount was received by the assessee as entrance fees from various types of members of the club. The Assessing Officer held that one-time payment made by the members are for special facilities and the same is done in the normal course of its business and, therefore, cannot be treated as capital receipts. The CIT(A) following the decision of his predecessor in the assessee’s own case for A.Ys. 2005-06 to 2009-10 treated the amount as capital receipt. Aggrieved, the Revenue is in appeal before us.
During the course of hearing, the learned AR submitted that for the A.Ys 2007-08 to 2009-10, the mater travelled up to the Tribunal and the Tribunal also dismissed the appeal of the department. The learned DR, on the other hand, relied on the order of the Assessing Officer.
We have heard the rival contentions and also gone through the orders of the authorities below. We find that identical issue came up before the Tribunal in assessee’s own case for A.Ys. 2007-08 to 2008-09 and the Tribunal vide its order dated 27.07.2016 in 4235 & 6336/Mum/2012 dismissed the appeal of the revenue observing as under:
2.3. If the observation made in the assessment order, conclusion drawn in the impugned order, assertion made by the Id. Respective counsel and the material facts available on record, if kept in juxtaposition and analyzed, there is no dispute to the fact that right from practically the date of incorporation i.e. 1925 onwards, the entrance fee from the members was treated as capital in nature. As explained by the ld. Counsel that majority of the orders were passed u/s 143(3) of the Act. We have noted the facts of Assessment Year 2005-06, the order passed by the Ld. Commissioner of Income Tax (Appeals), wherein, vide ground no.2(page-2 onwards), entrance fee, received from its members held that the onetime entrance fees, received from its members is in the nature of lifetime membership fees, hence it cannot be treated as annual subscription as the same is collected once in lifetime, therefore, it is a capital receipt. The Hon’ble jurisdictional High Court in CIT vs Diners Business Services Pvt. Ltd. 263 ITR 1(Bom.) held that any sum paid by a member to acquire the rights of a club is a capital receipt. We further note that for Assessment Year 2003-04, while framing the assessment u/s 143(3) of the Act and also for Assessment Year 2001-02, identically the claim of the assessee was allowed. No contrary material was brought to our notice. It is also noted that even revisional jurisdiction u/s 263 was invoked by the Department and finally the entrance fees was treated as capital receipt, therefore, we find force in the contention of the assessee.
2.4. If this issue is analyzed on the principle of consistency, we note that in earlier years, identically the claim of the assessee was decided in favour of the assessee by accepting the entrance fees as capital receipt, therefore, we are of the view that unless and until contrary facts are brought on record by the Revenue, no U-turn is permissible. The learned Assessing Officer is bound by rule of consistency. The following cases support the case of the assessee: - i. Parshuram Pottery Works Ltd. vs ITO 106 ITR 1 (SC) ii. Security Printers 264 ITR 276(Del.) iii. CIT vs Neo Polypack Pvt. Ltd. 245 ITR 492 (Del.) iv CWT vs Allied Finance Pvt. Ltd. 289 ITR 318 (Del.) v. Berger Paints India Ltd. vs CIT 266 ITR 99 (SC) vi. DCIT vs United Vanaspati (275 ITR 124) AT) (Chandigarh ITAT) vii. Union of India vs Kumudini N. Dalai 249 ITR 219 (SC) viii Union of India vs Satish Pannalal Shah 249 ITR 221 ix. B.F.Varghese vs State of Kerala 72 ITR 726 (Ker.) x. CIT vs Narendra Doshi 254 ITR 606 (SC) xi. CIT vs Shivsagar Estate 257 ITR 59 (SC) xii. Pradip Ramanlal Seth vs UOI 204 ITR 866 (Guj.) xiii. Radhaswamy Satsang vs CIT 193 ITR 321 (SC) xiv. Aggarwal warehousing & Leasing Ltd. 257 ITR 235 (MP)
2.5. The sum and substance of the aforesaid judicial pronouncements is that on the basis of principle of judicial discipline, consistency has to be followed and once in a particular year, if any view is taken, in the absence of any contrary material, no contrary view is to be taken as finality to the litigation is also a principle which has to be followed. Before us, no contrary facts or any adverse material was' brought on record by the Revenue, therefore, on the principle of consistency also, the assessee is having a good case in its favour, thus, considering the totality of facts, we find no infirmity in the order of the Ld. Commissioner of Income Tax (Appeal).
Respectfully following the decision of the Tribunal in the assessee’s own case, we dismiss the appeals of the Revenue for both the years under consideration.
In the result, the appeals are dismissed.
Order pronounced in the open court on 22nd day of September, 2017.