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TMI Blog2003 (4) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee also received annual rent for both the properties from Diners Club India Limited. The Assessing Officer held that the arrangement was a collusive arrangement between two sister concerns and that the assessee had received lesser rent vis-a-vis the market rent from Diners Club Limited. Consequently, the Assessing Officer held that 60 per cent. of the amount should be taxed as value of the benefit which accrued to the assessee. Accordingly, the Assessing Officer made an addition of Rs. 20,19,921 to the income of the assessee on this ground under section 28(iv) of the Income-tax Act, 1961. During the year in question, the assessee also received non-refundable entrance fees from its members amounting to Rs. 4,08,950. This was also brough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Findings: In this case, a factual finding is recorded by the Commissioner of Income-tax (Appeals) which finding of fact has been confirmed by the Tribunal. In this case, the assessee had let out a part of commercial premises admeasuring 5,390 sq. ft. in Bombay and 735 sq. ft. in Hyderabad to Diners Club India Limited (a sister concern of the assessee) for which the assessee received non-interest bearing deposit of Rs. 48,51,000 for the Bombay property and a sum of Rs. 4,50,000 for the Hyderabad property. The Commissioner (Appeals) found that the assessee had fixed the rent at Rs. 647 per sq. ft. per annum for the Bombay property and the rent was fixed at Rs. 299 per sq. ft. per annum for the Hyderabad property. For the purpose of the wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned by the Assessing Officer was arbitrary. The Commissioner (Appeals) found that the Assessing Officer has determined the market rent without discounting the amenities and facilities which existed in so-called comparable premises. The Commissioner (Appeals) found that the assessee had bought three floors in Raheja Chambers, Nariman Point, Mumbai. That, the first and the second floors were used as "executive centre" in which secretarial assistants, telex, fax and other amenities were provided. The Commissioner (Appeals) found that the premises in question were located in the basement and on the first floor (a small portion) and since the assessee had no use for the premises in question, the assessee had let out the premises to Diners Club I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of CIT v. W.I.A.A. Club Ltd. [1982] 136 ITR 569 (Bom), it has been held that the entrance fees were paid to the club in order to acquire the right to avail of services and facilities extended by the club. It was held that the entrance fees constituted receipt in the capital field. Hence, the Commissioner (Appeals) ordered deletion of Rs. 4,08,950 made by the Assessing Officer on account of non-refundable entrance fees received by the asses see. In view of the judgment of the Bombay High Court in the case of CIT v. W.I.A.A. Club Ltd. [1982] 136 ITR 569, the Tribunal was right in ordering deletion of Rs. 4,08,950 made by the Assessing Officer on account of non refundable entrance fees. Accordingly, we answer question No. 2 in the affi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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