TMI Blog2013 (6) TMI 552X X X X Extracts X X X X X X X X Extracts X X X X ..... eceipts under question. Therefore the issues relating to taxability of permit room compensation of Rs. 4.8 lacs as well as the general compensation of Rs. 2.4 lacs should be set aside to the files of the CIT (A) for fresh adjudication - appeal of the assessee is partly allowed for statistical purposes. - ITA No.721/M/2010 - - - Dated:- 15-5-2013 - Shri D. Manmohan And Shri D. Karunakara Rao, AM,JJ. For the Appellant : Shri Subramanian For the Respondent : Shri Majoj Kumar, CIT-DR ORDER Per D. Karunakara Rao, AM:- This appeal filed by the assessee on 4.4.2013 is against the order of CIT (A)- 29, Mumbai dated 24.11.2009 for the assessment year 2005-2006. 2. In this appeal, assessee raised the following grounds which read as under:- "1.(a) The Ld CIT (A) has erred in law and fact in treating an amount of Rs. 4,80,000/- as income from other sources. The amount is received for the permit room area. All the activities and the proceeds of the permit room are utilized by the members and hence any receipt is not taxable and is covered under the principle of mutuality. (b) The Ld CIT (A) failed to appreciate the fact that what is chargeable to tax is income and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hs pa) on account of permit room was not offered to tax and it was claimed as exempt under the 'principle of mutuality'. AO noticed that both these amounts are similar ie the same contractor M/s. Sadar Caterers, purpose is the same ie use of the premises and other facilities of the club. Therefore, AO find no reason as to why the assessee failed to offer Rs. 4.8 lacs also to tax. As per the AO, the amount received the amounts by way of compensation from the contractor, who is not a member of the club not beneficiary of the club and therefore he stands outside the scope of the principle of mutuality. As per the AO, the said amount was given by the contractor in the form of compensation and he has a motive to generate to his business and never has an intention to contribute to the common fund of the club. In this regard, AO relied on the order of the ITAT in the case of Maker Chambers V Premises Co-op. Society Ltd. vs. ITO (2005) 2 SOT 797 (Mumbai). AO was of the opinion that there must be complete identity between the contributor and the participators. He further mentioned that 'all the contributors to the common fund must be entitled to participate in the surplus and that all the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appeal' that the amount of compensation of Rs. 2.4 lacs and the interest earned on Fixed Deposits amounting to Rs. 6,14,350/- were already offered to tax as they are covered by the principles of the mutuality. However, in the additional grounds filed before us for the first time, the assessee intended to withdraw from taxation, the income of Rs. 2.4 lacs, originally offered in the return and stated that the said amount of Rs. 2.4 lacs is also exempt from tax in view of the applicability of the 'principle of mutuality'. He mentioned that the said issue, being legal in nature, can be raised at any time. For this purpose, he relied on the judgment of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. Vs Commissioner of Income-tax (SC) 284 ITR 323 and also another judgment of the Apex Court in the case of National Thermal Power Corporation (299 ITR 383)(SC). Further, Shri Subramanian, Ld Counsel for the assessee argued stating that the additional grounds must be admitted in view of its legal nature. Ld Counsel mentioned that the said amount was originally offered in the return of income under bona fide belief that the said income is taxable and while the said income is co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissing the appeal, he merely compared the compensation received on account of permit room with that of the general compensation, without distinguishing the differences. Further, making reference to the additional grounds, Ld Counsel mentioned that in view of the additional grounds raised, where the sum of Rs. 2.4 lacs is not to be treated as a taxable receipt, the order of the CIT (A) requires the amendment and re- adjudication. 10. On the other hand, Ld DR mentioned that the assessee is shifting the stands on taxability of the said receipts time to time, which must not be allowed by the Tribunal as it is a case of afterthought. He further argued stating that the order of the AO should be confirmed. Further, Ld DR relied on the latest judgment of the Hon'ble Supreme Court in the case of Bangalore Club Vs Commissioner of Income- tax (SC) 350 ITR 509, which explains the history and the scope of the said 'principle of mutuality'. Ld DR fairly agreed with the Ld Counsel for the assessee on the fact that the CIT (A) essentially confirmed the addition of Rs. 4.8 lacs qua the general compensation which is offered to tax by the assessee in the return of income. He mentioned that con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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