Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (9) TMI 725 - AT - Income TaxLife Membership Fee received - revenue receipt or capital receipt for a trust - corpus donations u/s 11 (1)(d) - Held that:- I find that the facts of this case indicate that the assessee has been capitalizing the life membership fee receipt since beginning and it has been so accepted by the Revenue earlier. The lump sum payment was dissected into two parts. One being entrance fee and other part commuted payment in liew of annual subscriptions. It was expounded that the element of entrance fee was to maintain parity with ordinary members, and the same was of return for investing the right of membership and hence it was the capital receipt, the other element was the consolidation of the revenue receipt and hence taxable. From this it follows that treatment of life membership fee depends upon its objective/attribution. The assessee has made submissions before the learned CIT(A) that part of life membership fee is attributed towards subscription of magazine, which is otherwise charged to normal members. In such circumstances, in my considered opinion, prima facie the entire life membership fee in this case cannot be attributed to revenue receipt. However, the necessary facts towards objective/attribution of the life membership fee need to be brought on record. Hence, deem it appropriate to remit the issue to the file of the assessing officer. The assessing officer is directed to obtain the necessary information regarding the objective/ attribution of life membership fee and, thereafter, decide as per the above case law from jurisdictional High Court in the case of WIAA Club vs. CIT [1979 (1) TMI 5 - BOMBAY High Court]. The issue raised is remitted to the file of the assessing officer
|