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2010 (9) TMI 476 - AT - Income TaxRevenue receive or capital receipt - receipt from members of society as membership fee - Held that: the assessee did not file any evidence in support of this claim that this entry fee is corpus receipt - This aspect has also to be examined as to what will happen if a member seizes to be a member for any reason although the assessee club remains in operation - The applicability of the provisions of section 44A(1) should also be examined and, therefore, this issue should be decided afresh by the A.O – Appeal is allowed by way of remand Festival expense and Swimming Pool expenses - There is no such claim lodged by the assessee before the A.O. that these expenses actually crystallized during the present year - The assessee has to furnish evidence before the A.O. in support of this contention that these expenses have actually crystallized during the present year – Decided in the favour of the revenue by way of remand Regarding dedication u/s 44A(3)- principal of Mutuality - From the reading of section 28(iii) and section 44A, the receipt of assessee has to be bifurcated into two parts - Similarly, the expense of the assessee has to be bifurcated into two parts, i.e. the revenue expenditure and capital expenditure - Thereafter, as per the provisions of section 44A(3) there is further restriction for granting of deduction which has to be restricted to the extent of 50% of the total income of the association as computed before making any allowance under that section i.e. section 44A - No deduction is allowable u/s 44A(i), in the absence of any such deficiency of expenses incurred for the purpose of protection and advancement of common interest of members of the assessee - Instead of this, the assessee has claimed deduction to the extent of 50% of its gross total income without showing that it has incurred any expenditure for the purpose of protection and advancement of common interest of its members - This ground of revenue is allowed Regarding telephone expense - Ad-hoc disallowance was made by the A.O. on estimate basis without bringing any adverse material on record - This aspect is now covered in favour of the assessee by the judgment of Hon’ble High Court of Gujarat rendered in the case of Sayaji Iron Co. as reported in (2001 -TMI - 13175 - GUJARAT High Court)
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