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2017 (10) TMI 246

the amount retained by the assessee from the bills raised by the caterers would not be taxable under the principles of mutuality, since the said receipt cannot be considered as amount received from outsiders. The Co-ordinate bench observed that the assessee has received money from its members and paid to the caterers at a lower rate by retaining its share and hence it cannot be said that the transaction involves non-members. In the instant case also, we notice that the facts are almost identical. The outside caterer has given assessee’s share by way of direct payment, the source of which is the collection from the members. Accordingly, consistent with the view taken by the coordinate benches, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete the impugned addition. - Interest income earned by the assessee from UTI and GOI tax free bonds - Held that:- It is well settled proposition that the AO is not entitled to assess an income, which is otherwise exempt under the Act, since the AO is required to determine the total income in accordance with the law. Since the assessee claims that the above said interest income of ₹ 51.69 lakhs would be e .....

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provisions of the Act. - I.T.A. No. 6937/Mum/2014 - Dated:- 4-10-2017 - Shri B.R. Baskaran (AM) And Shri Pawan Singh (JM) For The Assessee : Shri R. Murlidhar For The Department : Shri H.N. Singh ORDER Per B.R. Baskaran (AM) :- The appeal filed by the assessee is directed against the order dated 28- 08-2014 passed by Ld CIT(A)-1, Mumbai and it relates to the assessment year 2009-10. 2. The assessee is a company registered u/s 25 of the Companies Act as non-profit organization and is also registered as a charitable institution u/s 12A of the Act. The assessee claimed certain income as exempt under the principles of mutuality. The assessing officer completed the assessment by making various additions. The Ld CIT(A) enhanced the total income of the assessee and dismissed the appeal also. Aggrieved, the assessee has filed this appeal before us. 3. The Ld A.R did not press the ground No.1(a) relating to royalty receipts, as the assessee itself has offered the same in the revised return of income filed for second time. Hence the said ground is dismissed as not pressed. 4. The Ground No.1(b) relates to the claim for deduction of proportionate expenditure relating to royalty income. The Ld .....

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ice that the facts are almost identical. The outside caterer has given assessee s share by way of direct payment, the source of which is the collection from the members. Accordingly, consistent with the view taken by the coordinate benches, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete the impugned addition. 8. Ground No. 3 relates to interest income of ₹ 51.69 lakhs earned by the assessee from UTI and GOI tax free bonds. The Learned AR submitted that the assessee had received aggregate interest income of ₹ 2.84 crores, out of which a sum of ₹ 51.69 lakhs was earned from Unit Trust of India and Government of India Tax Free Bonds. He submitted that the Assessing Officer had assessed the entire amount of interest income, by holding that principles of mutuality would not apply to the same. The learned CIT(A) also confirmed the order passed by the AO on this issue. The Learned AR submitted that the above said interest income of ₹ 51.69 lakhs would be exempt u/s. 10(15) of the Act and hence the tax authorities are not justified in assessing the same as income of the assessee. 9. We heard learned Departmental Representative a .....

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bunal has restored the identical matter to the file of the Assessing Officer in A.Y. 2006-07. Accordingly, consistent with the view taken by the Tribunal in A.Y. 2006-07, we set aside the order passed by the learned CIT(A) on this issue and restore the same to the file of the Assessing Officer with similar directions given by the Tribunal. 14. Ground No. 5.1(b) relates to disallowance of payment of water charges made to BMC claimed by the assessee as part of municipal tax. The AO, by following his predecessor s order, took the view that the water charges cannot be form part of municipal tax. Accordingly he disallowed the claim of water charges. The Ld CIT(A) also confirmed the same. The Learned AR submitted that the Tribunal has allowed an identical claim in its order passed for A.Y. 2008-09 in ITA No. 5935/Mum/2012. 15. We have gone through the order dated 21.3.2016 passed in A.Y. 2008-09 and the Tribunal, in para No. 28 of the order has deleted the addition under the principles of consistency as explained in the case of CIT Vs. Dalmia Promoters Developers Pvt. Ltd. (281 ITR 346). The Tribunal noticed the fact that the assessee is in need of water to maintain the ground and other .....

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rned Departmental Representative and perused the record. We find merit in the submissions of the assessee. Accordingly, we restore this issue to the file of the Assessing Officer with the direction to allow MAT credit as per the relevant provisions of the Act. 21. Next ground urged in 5.1(e) relates to claim of depreciation on the addition of ₹ 185.31 lakhs made in A.Y. 2007-08 by treating the revenue expenditure claimed by the assessee as capital expenditure. The Learned AR submitted that the Assessing Officer had incurred expenses for hosting ICC Champions Trophy 2006 to the tune of ₹ 185.31 lakhs in A.Y. 2007-08 and claimed the same as revenue expenditure. However the AO disallowed the above said claim by treating the same as capital in nature. However he allowed depreciation thereon at the rate of 10%. The Ld A.R submitted that the order passed by the Assessing Officer in AY 2007-08 has since been reversed by Hon'ble ITAT. However, the Revenue has challenged the order passed by the ITAT by filing the appeal before the High Court of Bombay and is pending. The Ld A.R submitted that, in the event of reversal of order of the ITAT passed on this issue, then the asses .....

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