Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2016 (12) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (12) TMI 1559 - GUJARAT HIGH COURTReceipt of membership fees - nature of income - revenue or capital receipt - assessee is carrying on the business of club activities - Held that:- Considering the fact that the security deposit is refundable after a period of 25 years or on occurrence of the contingencies mentioned in the byelaws and it cannot be said that the assessee club had absolute dominion over the impugned deposits, the case on behalf of the Revenue that the same be treated as revenue income cannot be accepted. Merely because the security deposit is not kept apart and/or subsequently the amount of security deposit is utilized by the club for other purposes such as construction and providing other amenities at the club, the same shall not loose the “character of deposit”, which as observed hereinabove is refundable on occurrence of the contingencies as mentioned in the byelaws. No error has been committed by the learned Tribunal in holding the same as Capital Receipt in view of the decision in the case of S.S. Sakhar Karkhana Ltd. (2004 (9) TMI 6 - SUPREME Court ). Considering the fact that the security deposit recovered from the members at the time of their enrollment as a club member is refundable on occurrence of the contingencies mentioned in the Rules, Regulations and ByeLaws, same is required to be treated as a deposit and therefore, the same is required to be considered as capital receipts. We confirm the impugned judgment and order passed by the learned Tribunal. - Decided in favour of assessee
|