TMI Blog2017 (9) TMI 725X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 - I.T.A. No. 3245/Mum/2017 - - - Dated:- 5-9-2017 - SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER For The Appellant : Shri Devendra Jain For The Respondent : None ORDER Per Shamim Yahya, A. M.: This appeal by the assessee is directed against order of learned CIT(A)-1, Mumbai dated 28.02.2017 and pertains to the assessment year 2012-13. 2. The grounds of appeal reads as under: On the facts and in the circumstances of case and in law, 1. The Ld. CIT(A) has erred in confirming the action of A.O of adding L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arily contribution for specific purpose which the assessee trust can claim exemption u/s.11(1)(d) of the Act. ( 2) Life membership is the tees charged by the trust and members get for future benefits, cannot be considered as voluntarily contribution for specific purpose. ( 3) Reliance is placed in the case of WJ.A.A Club Ltd v/s CIT {1979} 2 Taxman 57 (Bom), the Hon ble Bombay High Court held that it would be seen that the lump sum payment of ₹ 2,500/- in the case of life membership has two elements in it. A part is entrance fee and the other part is consolidated commuted payment in lieu of annual subscriptions. The element of entrance fee which in this case has to be computed at ₹ 500 to maintain parity with ordinary members, is a return for vesting a right of membership and is clearly in the nature of a capital receipt. The other element of life membership, amounting to ₹ 2,000 in each case, is the consolidation of a revenue receipt, and is taxable as income . In view of the above, Life membership fees of Rs,9,73,800/- is treated as revenue receipt and brought to tax. 5. Before the learned CIT-A, the assessee s submissions r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,73,800/- is to be treated as corpus. However, nothing has been brought on record to rebut the observation of the Assessing Officer that, the same is not corpus/earmarked fund being not voluntary contribution for specific purpose which the assessee can claim exempt u/s.11(1)(d). Also claim of the appellant, that its accounting system takes care of the theory propounded by the Hon. Bombay High Court in the case of WIAA Club (supra) is neither elaborated nor supported by any documentary evidence. Accordingly, it is held that the decision of Bombay High Court squarely applies to the facts of the appellant's case. ii. Appellant submitted that in preceding years no such addition was made and hence consistency should have been maintained by A.O. In this regard it is mentioned that, in the case of M. M. Ipoh Ors vs. CIT(SC) 67 ITR 106 Hon'ble Apex court has observed that res judicata is not applicable as each assessment year is a separate proceeding. Similar observations were made by Hon'ble Supreme Court in the case of New jehangir Vakil Mills Co Ltd Vs CIT(SC) 49 ITR 137, and Bharat Sanchar Nigam Ltd Anr. Vs Union of India Ors (SC) 282 ITK 273. Further in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presentative (DR) submitted that the authorities below have decided the issue against the assessee by referring to and following a Hon'ble jurisdictional High Court decision which is germane. He submitted that it is settled law that not following an Hon'ble jurisdictional High Court decision results in mistake apparent from record. Hence, the ld. DR submitted that since the decision has been made on the basis of Hon'ble jurisdictional High Court decision, the same needs to be affirmed. Furthermore, the ld. DR submitted that the Hon ble Apex Court has held that an error should not be perpetuated. 10. I have carefully considered the submissions and perused the records. 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. In the present assessment year, the A.O. has invoked a decision of Hon'ble jurisdictional High Court in the case of WIAA Club vs. CIT [1979] 2 taxman 57 (Bom). In this regard, I may gainfully refer to the decision of Hon'ble jurisdictional High Court in this case as under: it would be seen that the lump sum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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