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2017 (2) TMI 329 - AT - Income TaxEntrance fee received from members - capital receipts or revenue receipt - 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 - Held that:- 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 learned counsel that majority of the orders were passed under section 143(3) of the Act. We have noted the facts of the assessment year 2005-06, the order passed by the learned Commissioner of Income-tax (Appeals), wherein, vide ground No. 2 (page-2 onwards), entrance fee, received from its members held that the one-time 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 v. Diners Business Services P. Ltd. [2003 (4) TMI 56 - BOMBAY High Court] held that any sum paid by a member to acquire the rights of a club is a capital receipt. We further note that for the assessment year 2003-04, while framing the assessment under section 143(3) of the Act and also for the 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 the revisional jurisdiction under section 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. If this issue is analysed 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 - Decided in favour of assessee Receipt of interest-free deposits - capital receipts or revenue receipt - Held that:- As per the agreement, the first security deposit of ₹ 10 crores stand forfeited, as liquidity damages if due to any reason, the work related to "new development" is not completed by M/s. Pegasus Resorts and Hotels Pvt. Ltd. Since the new development could not be started due to inability of M/s. Pegasus Resorts and Hotels Pvt. Ltd., the aforesaid amount was forfeited by the assessee. We are of the view that since the amount of ₹ 10 crores was in the nature of deposits, i.e., capital receipts, in the hands of the assessee, the forfeiture of the same cannot change the nature of receipt, therefore, it is capital receipt. - Decided in favour of assessee
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