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2016 (3) TMI 1065 - ITAT AHMEDABAD

2016 (3) TMI 1065 - ITAT AHMEDABAD - TMI - Security deposit collected from its members refundable - whether receipts does not partake the character of income? - Held that:- The Tribunal in assessee’s own case passed for AY 2008-09, under the identical facts and circumstances of the case, has held that the security deposit collected from its members which is refundable and does not partake the character of income.

Disallowance u/s 14A - Held that:- Looking to totality of the facts and .....

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are directed against the separate orders of the Commissioner of Income-tax (Appeals)-2, Ahmedabad dated 27/10/2015 & 28/10/2015 for Assessment Years (AYs) 2011-12 & 2012-13 respectively. Since common issues are raised in these appeals and pertain to the same assessee, these were heard together and are being disposed of by way of this consolidated order for the sake of convenience. 2. Firstly, I shall take up for adjudication of Assessee s appeal in ITA No.3301/Ahd/2015 for AY 2011-12:- .....

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me and added a sum of ₹ 2,29,50,600/- to the returned income of the assessee for the year under consideration. 2.1. Aggrieved assessee filed an appeal before the First Appellate Authority. The ld.CIT(A) partly allowed the appeal of the assessee by holding that only 1/25th of the security deposit collected during the year would alone be liable for taxation during the relevant financial year. Aggrieved by the order of the ld.CIT(A), the assessee is in further appeal before the Tribunal. 3. A .....

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e material available on record and gone through the orders of the authorities below as well as the decision relied upon by the ld.counsel for the assessee. The Tribunal, under the identical facts and circumstances of the case, has held that the security deposit collected from its members which is refundable and does not partake the character of income. The relevant finding of the Tribunal contained in para-5 in assessee s own case passed for AY 2008-09(supra) reads as follows:- 5. We have heard .....

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every receipt cannot be termed as income unless it is satisfies the requirement of law. In the present case, the assessee-club had received refundable non-interest bearing security deposit would remain liability for the assessee-club. Member by giving security deposit entitles himself for the concessional rate services provided by the assessee-club. Therefore, looking to the totality of the facts of the case and in view of the judgement of the Hon ble Supreme Court in the case of Siddheshwar Sah .....

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r Karkhana Ltd. (supra) has held that these deposits are akin to transaction of loan. They are clearly liable to be excluded from taxable income. Therefore, respectfully following the judgement of the Hon ble Apex Court in the case of Siddheshwar Sahakari Sakhar Karkhana Ltd., we are of the considered view that the security deposits as received by the assessee-club cannot be subjected to tax. Accordingly, we find no merit in this ground of the Revenue s appeal, same is rejected. 4.1. In view of .....

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the said issue is covered against the Assessee and in favour of Revenue in view of the Tribunal s order passed in assessee s own case for AY 2008-09(supra). 5.1. The ld.Sr.DR also supported the order of the ld.CIT(A) on this issue. 6. I have heard both the parties. Looking to totality of the facts and circumstances of the case and in view of the submission made by the ld.counsel for the assessee, I hold that the disallowance of ₹ 1,44,869/- by applying the provisions of section 14A of the .....

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income for the relevant assessment year. This issue is also covered by the decision of the Coordinate Bench passed in ITA No.2337/Ahd/2011 (Revenue s appeal) and ITA No.2054/Ahd/2011 for AY 2008-09 (Assessee s own appeal), dated 30/11/2015, wherein the Tribunal has held that the refundable security deposit collected does not tantamount to income and the same cannot be taxed. In view of the finding of the Tribunal, I hold that the ground raised in Departmental appeal is to be dismissed. 9. In th .....

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