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The Deputy Commissioner of Income Tax Versus M/s Road Safety Club (P) Ltd.,

2015 (9) TMI 539 - ITAT CHENNAI

Membership fee receipt - accrual of income on proportionate basis - CIT(Appeals)’s action in allowing the assessee’s claim offering only 1/8th of membership receipts received during the relevant previous year as its income - Held that:- The Revenue had sought to tax the similar membership advances in the relevant year of receipt in earlier assessment years as well. The assessee produces copy of the co-ordinate bench decision (supra) rejecting this course of action. The Revenue only submits that .....

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nce of safety bonuses written off as per Actuarial valuation. The Revenue neither draws any distinction on facts nor does it quote any case law to the contrary directly covering the issue. We follow consistency in these circumstances and reject the Revenue’s arguments. - Decided against revenue. - ITA Nos.2957 & 2958/Mds/2014 - Dated:- 11-3-2015 - Shri A. Mohan Alankamony And Shri S.S. Godara JJ. For the Appellant : Shri P. Radhakrishnan, JCIT For the Respondent : Shri R. Sivaraman, Advocate ORD .....

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the Act'). 2. For the sake of convenience and brevity, we proceed assessment year-wise in dealing with these appeals. I.T.A. No. 2957/Mds/2014 (Assessment Year 2008-09) 3. The Revenue s pleadings in this case challenge the CIT(Appeals) s action in allowing the assessee s claim offering only 1/8th of membership receipts received during the relevant previous year as its income and also in deleting disallowance of safety bonus claim of ₹ 1,24,76,016/-. 4. The assessee-company promotes saf .....

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d insure its members with insurance companies against accidents. It recognized only 1/8th of receipt of membership fees as income of relevant previous year. There is no dispute that the CIT(Appeals) and the tribunal have already upheld the very method of recognition of income in earlier assessment year. The Assessing Officer rejected the assessee s practice and observed that the Revenue had not accepted the aforesaid appellate orders. He considered the entire membership fees as its income to be .....

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nt years 2001-02 to 2007-08 and the issue 'has been decided in favour of the appellant. Extract from the orders of the Honourable ITAT bench "B", Chennai in ITA No.1651/Mds/2010 dated 16-12-2010 for the assessment year 2007-08 is given below: "We have perused the orders and heard the rival contentions. In so far as ground Nos.2 and 3 are concerned, these are similar to the grounds raised by the Revenue for assessment year 2006-07. In its order dated 25th June, 2010 after consi .....

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cision of this Tribunal. The facts for the impugned assessment year are pari materia and nothing has been brought on record by the revenue to show any decision of any higher judicial authority which would warrant a different view. We thus find no error In the order of the CIT(A). Accordingly, ground Nos.2 & 3 of the revenue stand dismissed We also find from the order of the CIT(Appeals) that he had made a bifurcation of refundable fees and non-refundable fees before allowing relief to the as .....

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t find any reason to interfere with the order of the CIT(Appeals) on the above two grounds since no facts which are different from the earlier year has been brought out by the Revenue. Accordingly, ground Nos. 2 and 3 stand dismissed" 6. We have heard both sides and gone through the relevant findings. The Revenue had sought to tax the similar membership advances in the relevant year of receipt in earlier assessment years as well. The assessee produces copy of the co-ordinate bench decision .....

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ited this amount being excess provision of safe bonus written back in its profit & loss account. It claimed exclusion of the same amount from its total income as already subjected to tax in the earlier assessment year. It also clarified to have given back the membership fee as safety bonus in the end of the membership period in case the member concerned did not raise any claim. The Assessing Officer did not agree and disallowed / added the safety bonus claim sum of ₹ 1,24,76,016/-. 8. .....

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basis of Actual Valuation by one Mr. A. Venkataraman, Actuarian, Chennai. The appellant has claimed the Safety Bonus liability as a deduction. In the earlier assessment years 2001-02 to 2007-08, the appellant had provided for such Safety Bonus liability and claimed the same. The same was disallowed in those years. On appeals the CIT(A) directed the appellant to file computation of Safety Bonus liability which could be considered to have accrued during the relevant period on the basis of the Law .....

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