TMI Blog2012 (5) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... ee in its accounts is neither conclusive nor a sure indication of the nature and character of the receipt – against assessee. - INCOME TAX APPEAL No. - 123 of 2002 - - - Dated:- 30-4-2012 - Ashok Bhushan, Prakash Krishna, JJ. Petitioner Counsel :- Rishi Raj Kapoor Respondent Counsel :- A.N. Mahajan,B Agrawal (Delivered by Prakash Krishna, J.) The only issue involved in the present appeal is whether the receipt of Rs.2,72,000/- received by the appellant assessee herein by way of subscription of magazine known as Akhand Jyoti from life members is revenue receipt or was a deposit for membership. The facts of the case lie in a narrow compass and are not much in dispute. The appellant herein is publishing monthly magaz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbership as a revenue receipt and the income for the year under consideration? (ii) Whether the view of the Tribunal treating the deposit of Rs.2,72,000.00 as a revenue receipt is based on relevant consideration? Shri V.B. Upadhyaya, learned senior counsel appeared along with Shri R.R. Kapoor for the appellant and submitted that the receipt was in the nature of deposit and as such, the Tribunal erred in law in holding the same as revenue receipt. Reliance was placed upon CIT Vs. Mantra Tantra Yantra Vigyan, (2008) 300 ITR 140 (Rajasthan). The learned counsel for the department, on the other hand, supported the order of the Tribunal. Considered the respective submissions of the learned counsel for the parties and perused the record. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O. was not justified in assessing this amount as revenue receipts during the year under consideration in view of the fact that evidences placed before him that the amount was refundable to the subscribers and was being utilised by the assessee for his business purposes and the magazine was being supplied on account of interest which may be earned on the said amount or the interest paid by the assessee on the funds borrowed." While reversing the order of CIT(A), the Tribunal has observed that the CIT(A) did not make any attempt to work out the average expenditure of the magazine supplied to the life members to arrive at the conclusion whether the interest accrued on paltry sum of Rs.150/- was sufficient to meet the expenses attributable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature of deposit. No such case appears to have been set up before the Assessing Officer. It was developed subsequently at the first appellate stage and even CIT(A) without examining the said plea on merits allowed the appeal. It was not disputed that the assessee did receive the subscription for life membership in the capacity of businessman. The Tribunal has correctly observed that the annual subscription and ten years subscription are revenue receipts. There is absolutely no justification for not treating the amount received from life members as subscription as revenue receipt. There is no iota of evidence on record to show that the amount received from life members as subscription is refundable. As noticed by the Assessing Officer, no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the High Court has observed that the best and nearest case they could find is the one reported in S. Sahkari Sakhar Karkhana Ltd. Vs. CIT (2004) 270 ITR 1. Relying upon the ratio propounded therein it was held that the amount received by the assessee as subscription for life membership cannot be said to be amounting to revenue receipts liable to tax rather they are in the nature of capital receipts liable to be returned to the subscriber/member constituent. A strong reliance was placed by the senior counsel on this portion of the judgment. A close reading of the judgment of the Apex Court in the case of S. Sahkari Sakhar Karkhana Ltd. (supra) would show that it was a case where the assessee was a society and always treating the deposits as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the nature and character of the receipt, yet, it is not an irrelevant factor. After making the aforesaid observation, the Apex Court examined the question in the light of the salient features as mentioned from 1 to 9 of that case. It concluded that the deposit was convertible into shares and it was not disputed that such conversion is as good as refund. It may be another thing that conversion into additional shares was postponed till the events of repayment of loans towards the capital expenditure and the repayment of Government share capital happen. A close reading of the judgment of the Apex Court would show that it was rendered in the peculiar facts of that case and it has no application to the facts as they exist in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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