TMI Blog2019 (9) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... d before us that revenue has not accepted the decision of the coordinate bench in DCIT vs. JP greens Ltd where golf course was held to be plant. Therefore, it stands concluded that golf course is a plant looking to the nature of business of the assessee. Further, the judicial precedents relied upon by the parties also only lays down the proposition established by the higher judicial forum supports the above view. In view of this, ground number 1 of the appeal of the assessee is allowed reversing the views of the lower authorities, holding that golf course is a plant on which assessee is entitled to the depreciation at the rate of 25% under the income tax act. Disallowing the expenses on account of golf course on repairs and maintenance - HELD THAT:- It is a fact that assessee has submitted the details of such expenses. The books of the accounts of the assessee are duly audited and the learned assessing officer has also not pointed out any specific debate the defect in the details of such expenses. The merely because there is an increase in the expenditure compared to the golf course income the disallowance cannot be made. Further the assessing officer has also not established ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pertains to, the addition is required to be deleted. Taxability of the security deposit against the golf course membership fee - HELD THAT:- The identical issue arose before the honourable Gujarat High Court in principal Commissioner of income tax vs. Gulmohar Green Golf and country club Ltd [ 2016 (12) TMI 1559 - GUJARAT HIGH COURT] wherein it was been held that the security deposit recovered from the members at the time of their enrolment as a member is refundable on occurrence of the contingency mentioned in the rules and regulation and bylaws, therefore it is required to be treated as a deposit, thus, a capital receipt. Therefore, it was held that it is not an income of the assessee. As in the case of the assessee also the security deposit is refundable hence respectfully following the decision above, we also hold that the sum of refundable security deposit received from the members of the assessee is a capital receipt and cannot be charged to tax as income. Accordingly, we direct the learned assessing officer to delete the addition to the extent of refundable deposit received from the members Disallowance of bad debt/advances written off in the normal course of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been made in assessment year 2001 02 and 2003 04 on the basis of agreement to sale dated 16th/2/2001 and 17/3/2003 - HELD THAT:- As the revenue could not point out that what is the trigger point of taxing the above amount in this year and further in which year the transfer of the capital asset has happened, the above addition has rightly been deleted by the learned CIT A. In view of this we do not find any infirmity in the order of the learned CIT A deleting the protective addition Addition on account of interest disallowances - HELD THAT:- No infirmity in the order of the learned CIT A wherein it has been held that that fresh borrowing of INR 7.75 crore were utilized for repayment of loan pertaining to earlier years and the purpose of the loan has been accepted by the learned assessing officer, the disallowance made by the learned assessing officer is not sustainable. We also do not find any infirmity in the order of the learned CIT A mentioning the reasons for deletion of the disallowance Penalty u/s 271(1)(c) - Defective notice - HELD THAT:- None of the twin charges have been struck off by the learned assessing officer in notice dated 18/05/2007. Honou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the CIT (A)/assessing officer erred on facts and circumstances of the case and in law in not appreciating that classification of golf course could not be changed in subsequent year when claim of depreciation @ 25% on golf course as plant stood allowed/ accepted in the past assessment years, i.e., 1998-99 to 2000-01 and succeeding assessment years, i.e., 2006-07 to 2009-10. 1.2 That the CIT (A)/assessing officer erred on facts and circumstances of the case and in law in not appreciating that the classification of block of asset which has been allowed/accepted and merely carried forward from earlier years cannot be modified in current year 1.3 That the CIT(A) erred on facts and circumstances of the case and in law in holding that golf course has not manufactured or produced anything so as to classify it as a plant and machinery . 2. Without prejudice, if the golf course is treated as building , the assessing officer be directed to re-compute depreciation admissible under section 32(1) (ii) of the Act with reference to revised written down value of golf course in subsequent years. 3. The appellant is a company engaged, inter alia, in the business of running of golf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing its golf course, but it cannot be said that the assessee has manufactured or produced anything. Thus, assessee is in appeal before us. 5. The ld AR submitted that aforesaid action of the assessing officer/CIT(A)in restricting the depreciation to 10% is bad in law and not sustainable for the reasons elaborated hereunder: a) Tribunal vide order dated 15.06.2016 merely remanded/remitted the matter to AO for fresh consideration i. As stated supra, in the first round of proceedings, the Hon ble Tribunal restored the issue whether depreciation is admissible @25% as plant or @10% as building, to the file of the assessing officer for de-novo consideration and to examine the details of construction on the 300 acres of land converting it into a golf course, which were not filed before the assessing officer in the first round of proceedings. The relevant extract of the findings of the Tribunal are reproduced hereunder: 45. In the second part of above operative para, the ld. CIT (A) held that the ratio of the decision of Hon'ble Supreme Court in the case of CIT Vs. Anand Theatre is not applicable and then jump to a conclusion that the business of the assessee is to invi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r affording due opportunity of being heard to the assessee and without being prejudiced from earlier orders and our observations in this order. 48. We may also point out that to support the case of the AO, the ld. CIT-DR has placed reliance on plethora of decisions including the decision of Hon'ble Supreme Court in the case of CIT Vs. Anand Theatre [supra], CIT Vs. Gwalior Rayon Silk Mfg. Mills 196 ITR 149 [SC] and decision of Hon'ble High Court of Delhi in the case of Moradabad Toll Road Co. Vs. ACIT [2014] 52 Taxmann.com 21 [Delhi] to establish that golf course is not a plant and machinery and it is to be categorized as a building and on the other hand, the ld. AR has placed reliance on the case of decision of Hon'ble Supreme Court in the case of CIT Vs. Karnataka Power Corpn. 247 ITR 268 [SC], Scientific Engineering House P. Ltd Vs. CIT 157 ITR 86 [SC] and decision in the case of Victory ITA No. 3549 4847/Del/2009 CO No. 328/Del/2009 111/2010 Aqua Farm Ltd 61 Taxmann.com 166 [SC] and plethora of decision to support the case of the assessee that golf course is a plant and machinery and it is not a building. Interestingly, no cited decision relied by both the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ils of construction of golf-course, it is respectfully submitted, stood obliterated for all intents and purposes. He placed reliance in this regard is placed on the judgment of the Hon ble Supreme Court in the case of Hukam Singh v. State of Haryana and Another: 2019 SCC Online SC 159, wherein the Apex Court clarified similar issue and held that once the matter is remanded for fresh consideration, any observation in the judgment stands obliterated and the authorities are required to consider the issue afresh. In that case, review petition was filed before the Hon ble Court called upon it to clarify the meaning and purport of the following passage from its earlier ruling in the case of Haryana State Industrial Development Corporation Ltd. vs. UDAL (2013) 14 SCC 506: 32. We also find merit in the argument of the learned counsel for the landowners that while fixing market value of the acquired land the learned Single Judge committed serious error by not considering an important piece of evidence i.e. Ext. PW 9/A dated 23-11- 1999 vide which HSIIDC had allotted land to M/s. Honda Motorcycles and Scooters India (P) Ltd. At the rate of ₹ 1254.18 per square yard. Although, this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le deed Ext.PW 9/A, the value ought to be higher than ₹ 37,40,000/- per acre. The matter was not finally decided by this Court and was remitted in paragraph 34 for fresh consideration uninfluenced by the observations contained in this judgment . We do not agree with the submission that the landowners were assured of minimum compensation at the level of ₹ 37,40,000/- per acre. In fact, in tune with the observation that fresh consideration is uninfluenced by any of the observations contained in the judgment, the matter was left open and the assessment had to be done de novo. We, therefore, reject the submission. (Emphasis supplied) v. Similarly, the Hon ble Supreme Court in the case of Kanaklata v. State (NCT of Delhi) and Others: 6 SCC 617, held that if an order passed by the court is set aside, the observations and findings recorded therein also get obliterated for all intents and purposes. The Court further held that in some cases, the Court makes the position clear by stating that any such observation shall not influence the court concerned while making a fresh order the same to put the matter beyond the pale of any controversy. The Court held as under: 5. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch while passing a fresh order but then the question is not whether the Judge is biased or incapable of rising above the earlier observations made by her. The question is whether the apprehension of the complainant is reasonable for us to direct a transfer. Justice must not only be done but must seem to have been done. A lurking suspicion in the mind of the complainant will leave him with a brooding sense of having suffered injustice not because he had no case, but because the Presiding Officer had a preconceived notion about it. On that test we consider the present to be a case where the High Court ought to have directed a transfer. Inasmuch as it did not do so, we have no option but to interfere and direct transfer of the case to another court . (emphasis supplied) vi. Similarly, in the present case, the Tribunal, he submitted, simply set-aside/ remitted the issue to the file of the assessing officer for fresh consideration and thus, any prima-facie observation/finding recorded by the Tribunal based on limited examination of details of construction of golf course, stood obliterated for all intents and purposes. The Tribunal, in para 47, in fact, clarified the position to put t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fect from 1-4-1988. Circular No. 469 dated 23 September 1986: 162 ITR (St) 21 explained the scheme of depreciation on block of assets. It was clarified that in the block concept, individual identity of the asset is lost, and depreciation is allowed with reference to the entire block. In view of the above, he submitted that depreciation is to be allowed on the block of asset at specified percentage on the written down value of the block of asset. The written down value of the block of asset is the value of block of asset at the beginning of the previous year as increased or decreased by the addition or deletion in the previous year. Hence, once an asset goes into the block of asset and the same is allowed by the assessing officer in the previous year, the asset loses its individual identity and become part of the block. In the succeeding years, the assessing officer has to allow depreciation on the block of asset as being brought forward. c) Golf course accepted as plant in earlier years not permissible to change block in current year He submitted that the golf course, was constructed in previous year relevant to assessment year 1998-99, wherein total cost of ₹ 20,57 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itiated on a different issue, were quashed by ITAT vide order dated 21.05.2015. 2001-02 30.10.2001 Order u/s 143(3) dated 29.3.2004 4th year of claim, allowed originally by the assessing officer. Subsequently, the case was reopened and the issue was set aside by the Tribunal vide order dated 15.6.2016 for denovo consideration. 2002-03 31.10.2002 Return processed u/s 143(1) vide intimation dated 27.2.2003 5th year, claim of depreciation stood accepted, as under: as under: - Depreciation claimed in return - Tax Audit Report - Intimation u/s 143(1) 2003-04 27.11.2003 Order u/s 143(3) dated 28.2.2006 6th year of claim. The case was re-opened and the issue was set aside by the Tribunal vide order dated 15.6.2016 for denovo consideration. He further submitted that , in regular assessment under section 143(3) vide order dated 29.03.2004 for assessment year 2001-02, the claim of depreciation was accepted after duly considering the replies dated Febr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e he submitted that it is totally absurd to take a different position in some of the middle assessment years, more so, when that would be totally contrary to the fundamental principle of depreciation being allowed on the WDV of the relevant block. e) He further referred to several Judicial Precedents to support his contentions. i. He first referred to decision of Delhi Bench of the Tribunal in the case of DCIT v. Jaypee Greens Ltd. : ITA Nos. 3545 to 3547/Del/2009, wherein on exactly similar facts, the Tribunal considering golf course as a plant, was pleased to allow depreciation @25% observing that the assessing officer has himself allowed depreciation at that rate in the past [refer pages 33-38 of case laws paper book]. He submitted that in that case, the assessee was engaged in the business of running and operating a golf course in Greater Noida on which the assessee claimed depreciation @ 25%. The assessing officer held that golf course and also hospitality services is not covered in the block of 'plant', but it is covered in the asset 'building' which is used by the hotels for hospitality services on which the depreciation @20% is allowable. Hence, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed law that Tribunal cannot take away the relief that AO has given. Now further we find that on the same set of facts in assessee's own case, the impugned asset was treated as plant for A.Y. 2001-02 by the AO himself and depreciation @25% was allowed. The assessment was done u/s 143(3) of the IT Act. In the present case, we do not find any change in the circumstances of the case facts or law. Under the circumstances, we refer to Hon'ble Jurisdictional High Court decision in the case CIT vs. Dalmia Promoters Developers (P) Ltd. 281 ITR 346 wherein it was held that when there is absence of any material change in the facts and law, the view taken for earlier year cannot be disturbed. In the present case, we find that no such material change has been brought out before us. Since the depreciation @25% on the said asset has been allowed for A.Y. 2001-02, we do not see any reason to disturb the rate to 20% as applied by the AO. Accordingly, we uphold the order of the ld. CIT(A) to allow the depreciation @25%. 2.6 In the result, all the revenue's appeals are dismissed. (Emphasis supplied) ii. He further placed reliance in this regard on the decision of the Delhi B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stock or buildings or furniture and fittings On perusal of the above definition, it is submitted that an inclusive definition of `plant has been given in section 43(3) of the Act to include ships, vehicles, books, scientific apparatus and surgical instruments used for the purpose of business or profession. The definition specifically excludes from its ambit tea bushes, livestock, buildings or furniture and fittings. He referred to decision of Supreme Court in the case of Scientific Engineering House Pvt Ltd v. CIT: 157 ITR 86, wherein the meaning of term 'plant' was explained. He submitted that legal principles that emerge from the aforesaid decision may be culled out as under: (a) Plant in its ordinary sense includes any apparatus, article or object fixed or movable, live or dead, used by a businessman for carrying on his business; (b) Plant include any article/ apparatus used by a businessman for carrying on business and it is not necessarily confined to an apparatus which is used for mechanical operations or processes or is employed in mechanical or industrial business; (c) In order to qualify as plant, the article must have some degree of durability. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of golf course; (g) Indirect day-to-day business expenses allocated to the cost of golf course; (h) Other miscellaneous earthmoving, leveling expenses, etc. c) On perusal of the aforesaid, it will be kindly appreciated that the Golf course is a highly specialized and complex plant constructed on the land requiring levels of undulation and other technical requirements as per the rules of the game of golf. The construction of golf course involves various plants and equipment referred above. Further, the fact that the appellant spent an aggregate sum of ₹ 22.57 crores for construction of Golf course during the financial years 1997-98 to 2000-01 speaks volume of the specialized nature and the advanced technology/ expertise that goes into constructing the Golf course (Refer pictorial representation of the specialized nature of Golf course placed at pages 74-111 of the Paper book Vol 1). d) In light of the aforesaid, it is respectfully submitted that Golf course has to be treated as plant and is, therefore, entitled to deprecation @ 25% as applicable to plant , more particularly in the light of the legal position discussed herein. e) Similarly, in the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der passed by the Assessing Officer we find that this was not the reason given by the Assessing Officer to reject the claim. Therefore, finding of fact on this aspect cannot be gone into at this stage. 6. We find that the judgment dated 14.10.2004 rightly rests this case on 'functional test' and since the ponds were specially designed for rearing/breeding of the prawns, they have to be treated as tools of the business of the assessee and the depreciation was admissible on these ponds. We, thus, decide the question in favour of the assessee and as a consequence, appeals of the Revenue are dismissed and that of the assessee are allowed. (Emphasis supplied) g) Kind attention, in this regard, is also invited to the decision of the Bombay High Court in the case of CIT V. Hydro Electric Power Supply Co. Ltd: 122 ITR 288 wherein the Court held dam constructed by the assessee engaged in the business of generation of electric power to be plant . Similarly, wet dock of a dockyard in the case of CIT V. Mazagon Dock Limited: 191 ITR 460 (Bom.) and swimming pool of a caravan park operator in the case of Cooke V. Beach Station Caravans Limited: (1974) 3 All ER 159 have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tial/ indispensable part of/ and is used as a tool of business. Therefore, applying the functional test laid down in various decisions, Golf Course expense has to be, it is submitted, regarded as `plant and is eligible for depreciation @ 25%. Accordingly, the addition made by the assessing officer and upheld by the CIT(A) calls for being deleted in toto. The LD AO reiterated the findings given in original assessment and allowed depreciation on golf course @ 10% by treating the same as building . On further appeal against the said order, the CIT(A), vide order dated 31.12.2018 upheld the order of the assessing officer restricting depreciation on golf course @ 10%. The CIT(A) held that no doubt the assessee is generating revenue from the players for playing golf and allowing its golf course, but it cannot be said that the assessee has manufactured or produced anything. The aforesaid conclusion of the CIT(A) is, it is submitted, contrary to the functional test laid down by the Courts. The CIT(A) failed to appreciate that manufacture/ production is not necessary to treat an asset as plant . So long as functional test of a plant is satisfied, the asset would qualify as plant. Furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or carrying on cinema theatre and not be held to be a plant. In case of Raj Malhotra, the honourable Supreme Court held that the building in which water was run was not the plant. In the case of Dr P Venkata of the Supreme Court held that if it was found that the building or structure constituted an apparatus or a tool of the taxpayer by means of which business activities were carried on amounted to a plant but where the structure played no part in carrying on these activities but merely constituted a place where they were carried on, then it is a building and it is not a plant. He therefore submitted that in the present case the players play golf on the golf course but the golf course as such does not play any part in carrying on the playing activity of the assessee. He further countered the argument of the learned authorised representative that the issue squarely covered in favour of the assessee in case of GP greens Ltd in ITA number 3545/del/2009, wherein the coordinate bench vide order dated 9/3/2010 has not due to adjudicate the issue as to whether the depreciation is allowable on golf course treating the same as plant or not. He therefore submitted that the ratio of said dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that is a piece of land with many levels of undulation, holes, small ponds etc can be categorized as a plant and machinery and not as a building. The Id. CIT(A) jumped to a conclusion that the assessee's claim of depreciation @ 25% is allowed which is not a proper and justified approach for a quasi-judicial authority. We may point out that golf course has not been categorized in the schedule of depreciation and the main dispute between the assessee and the revenue is that the assessee is seeking to place the golf course in the category of plant and machinery whereas the Revenue wants to treat the same as building. 46. At this juncture, we may point out that we are not in agreement with the conclusion drawn by the id. CIT(A) that a piece of land having some landscaping for playing golf such as various level undulation, holes, small ponds etc construed a super structure which- can be categorized as a plant and machinery. If this view is accepted then every landscaping having some special features for the purpose of its intended use would become plant and machinery and every construction of building for the purpose of sports would be converted into plant and machinery. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in its written submissions before the authorities below as well as before the Tribunal has submitted the details of construction on the 300 acres of land converting it into a golf course, but these details have not been submitted before the AO and the AO could not get an opportunity to verify and examine the same. Therefore, in our considered opinion, this issue requires detailed verification and examination at the end of the AO after affording due opportunity of hearing to the assessee and without being prejudiced from the earlier assessment and first appellate order. Needless to say that the AO would examine all material facts on this issue and after considering the mandate of the relevant provisions of the Act as well as the ration of decisions relied upon by both the parties shall decide the issue afresh in accordance with law. 6.3 Accordingly, the AO, after considering the issue, has taken the depreciation on Golf course @ 10% as applicable to building only, rejecting the claim of AO in the assessment order under appeal with the following remarks:- 5.4 From the details of the expenses, the assessee was not able to justify as to how these expenses make Golf Course a P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat loss of value over a tangible asset's useful life. Through depreciation, a company is able to capture and spread out costs over the long-term. In the context of the above definition also, the Golf Course cannot be considered as Plant but Building only. 5.10 Furthermore, the assessee is already taking depreciation separately on sporting items like Golf Carts, Pull Carts etc. In view of the above discussion depreciation on the Golf Course is limited to 10% 6.4 I have examined the contention of the appellant, the assessment order and direction by the Hon'ble ITAT. 6.5 It is evident that no depreciation has been claimed on land but only the add-ons on the land has been taken to consider as plant and machinery by the appellant, which was taken as building by the AO. It is also observed that in the depreciation chart as per the IT Act and Rules, no such category has been mentioned related to depreciation on golf course. No direct ruling or any case laws has been brought to the notice by appellant, to say that golf course is plant and machinery. The case laws relied upon are on different issues all together. The issue in this case is decided looking to the fact and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d item cannot be the basis for treating any golf course as plant and machinery. Therefore, the argument of the appellant that it has put up various value addition is not tenable. 6.10 Further, it is not directly related to the production or creation of any output but work as a support system and therefore, appropriately considered by AO as building and not the plant. It is also to be mentioned that the assessee is running a hotel and therefore, the residents of the hotel are also provided the facility to play golf. In such circumstance, the main objective is to increase the business of hotel by providing additional benefit / facility of golf. 6.11 The issue discussed in the case of CIT vs. Anand Theatre (supra) is clearly in the favour of revenue with respect to the facts relates to the appellant. Therefore, the same is accordingly followed where it is clearly mentioned that in such circumstance it has to be treated as building and not plant. 6.12 Therefore, looking to the facts and circumstances of the case and in law, where no specific rate of depreciation has been provided in the Act / Rules nor categorized golf course as plant and machinery, the landscaping and some st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. The building was used to not only house patients and nurse them, but also to treat them, for which various kinds of equipment and instruments were installed. The most apposite decision in this context is that delivered by the Allahabad High Court in S. K. Tulsi and Sons v. CIT [1991] 187 ITR 685. Reference was made to an earlier judgment, where also the functional test approved by this court in several decisions was applied. It was held that if it was found that the building or structure constituted an apparatus or a tool of the taxpayer by means of which business activities were carried on, it amounted to a plant ; but where the structure played no part in the carrying on of those activities but merely constituted a place wherein they were carried on, the building could not be regarded as a plant. The Tribunal and the High Court in the instant case proceeded upon assumptions of what a nursing home should contain. This may not be altogether appropriate. What is to be determined is whether the particular nursing home building was equipped as to enable the assessee to carry on the business of a nursing home therein or whether it is just any premises utilized for that obje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s stage. The functional test was applicable and since the ponds were specially designed for rearing or breeding of the prawns, they had to be treated as tools of the business of the assessee and the depreciation was admissible on these ponds as plant. 12. Further honourable Gujarat High Court in NIKO RESOURCES LTD. v. ASSISTANT COMMISSIONER OF INCOME-TAX (2017) 395 ITR 301 while deciding the issue whether the mineral oil well constitute plant as claimed by the assessee or building as claimed by the revenue, has held that Under section 32 of the Income-tax Act, 1961, depreciation allowance is, subject to the provisions of section 34 , permissible only in respect of certain assets specified therein, namely, buildings, machinery, plant and furniture owned by the assessee and used for the purpose of business. Section 43(3) defines plant in very wide terms. In order to qualify as plant the article must have some degree of durability. The test would be: does the article fulfill the function of a plant in the assessee's trading activity? Is it a tool of his trade with which he carries on his business ? If the answer is in the affirmative, it will be a plant. Thus, it was held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t A of appendix 1 of The Income tax Rules 1962. Thus, the fact of that case is distinguishable. Further, it was not stated before us that revenue has not accepted the decision of the coordinate bench in DCIT vs. JP greens Ltd where golf course was held to be plant. Therefore, it stands concluded that golf course is a plant looking to the nature of business of the assessee. Further, the judicial precedents relied upon by the parties also only lays down the proposition established by the higher judicial forum supports the above view. In view of this, ground number 1 of the appeal of the assessee is allowed reversing the views of the lower authorities, holding that golf course is a plant on which assessee is entitled to the depreciation at the rate of 25% under the income tax act. 14. In view of our decision in ground number 1 of the appeal, the second ground raised by the assessee, which was an alternative claim, does not survive, hence it is dismissed. 15. Accordingly, ITA number 1030/del/2019 for assessment year 2001 02, filed by the assessee is allowed. Assessment year 2003 04 16. The assessee has raised the following grounds of appeal in ITA No. 1031/Del/2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the Assessment Year 2004-05 against the order of the learned Commissioner Of Income Tax (Appeals) VII, New Delhi dated 13/10/2010:- 1. The order of the learned CIT (APPEALS) is erroneous contrary to facts law.. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT (Appeals) has erred in deleting the addition of ₹ 68,11,697/- made by the AO by disallowing the excess depreciation claimed by the assessee i.e. by directing the AO to allow depreciation on Golf Course @ 15% as against the 10% allowed by the AO. 2.1. The ld CIT (A) ignored the fact the Golf Course is building and not machinery and is not entitled for depreciation @ 15% applicable for machinery. 3. On the facts and circumstances of the case and in law, the Ld. CIT (Appeals) has erred in deleting the addition of ₹ 55,00,000/- made by the AO by disallowing the expenses on account of golf course and repair maintenance expenses. 3.1. The Ld CIT(A) ignored the fact that there is abnormal increase in the expenses and decline in the income of the assessee. 4. The appellant craves leave to add, to alter, or amend any grounds of the appeal raised above at the time o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to show the genuineness of the expenditure incurred. 24. Learned authorised representative submitted that the learned assessing officer has made an adopted disallowance is despite the assessee maintaining the complete details of the expenditure merely for the reason that there is an increase in the above expenditure vis-a-vis golf course income. He further submitted that assessee maintains the regular books of accounts, which are duly audited and certified by the tax audit. He further stated that the learned assessing officer has further failed to point out any specific defect in those details and merely because of the reason that there is an increase in the expenditure compared to the golf course income the disallowance has been made. He further referred to the order of the learned CIT A and submitted that there is no infirmity in the order of the learned CIT A deleting the above disallowance. 25. We have carefully considered the rival contention and perused the orders of the lower authorities on this issue. It is a fact that assessee has submitted the details of such expenses which are placed at page number 132 139 of the paper book. The books of the accounts of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aving held advance membership fee of ₹ 3,52,88,416 to be taxable in the year under appeal, the CIT(Appeals) erred on facts and in law in not directing the assessing officer to exclude advance membership fee of ₹ 3,52,88,416 from the taxable income of the appellant of the subsequent year(s) in which the said income had already been offered and subjected to tax. 4. That the CIT(Appeals) erred on facts and in law in confirming disallowance of ₹ 72,29,915 on account of bad debts/ advances written off in the normal course of business. 29. The revenue has raised the following grounds of appeal in ITA No. 4721/Del/2009 for the Assessment Year 2005-06:- 1. The order of the learned CIT (APPEALS) is erroneous contrary to facts law. 2. On the facts and in the circumstances of the case and in law, the learned CIT (A) has erred in restricting the additions made by AO disallowing the expenses claimed on account of provisions no longer written back to ₹ 20,41,449/- as against the disallowance of ₹ 84,16,051/- made in the assessment order. 2.1. The Ld. CIT (A) ignored the fact that the disallowance of ₹ 84,16,051/- was made by AO in accordan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wances for which resulted in increased of the existing declared losses. On being confronted regarding that visibility of such claim, it was stated that such written back amount primarily consisted of various provisions, which were not allowed in the earlier years as per the income tax act. Therefore, it are written back and claimed as admission deduction during the previous year. The learned assessing officer verified the details in support of such claim and found that the said) was a emission on account of net balances of trading assets and liabilities which primarily consisted of business advances, debtors, creditors and other provisions. Therefore according to him such) is clearly in the nature of remission of trading liabilities and have to be treated as profits chargeable to tax under the provisions of section 41 (1) of the income tax act. In view of this, the above addition was made. The assessee preferred the appeal before the learned CIT A who considered the whole issue and found that the learned assessing officer nowhere brought on record anything to show that any allowance or deduction regarding any particular amount written back had been allowed in the earlier years. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NR 80 416051/ a sum of INR 6 374602 is not following under the provisions of section 41 (1). He therefore held that the addition made by the learned assessing officer to that extent of INR 6 374602/ is not sustainable. We do not find any infirmity in the order of the learned CIT A to that extent. Further with respect to the disallowance of INR 2 041449/ of the balance sum sustained by the learned CIT A, the assessee could not show that whether these expenditure have already been disallowed by the assessee in the earlier years or not and therefore in absence of such details, the additions cannot be deleted. In view of this we find no infirmity in the order of the learned CIT A in upholding the disallowance of INR 2 041449/ . Accordingly, ground number 1 of the appeal of the assessee and ground number 2 of the appeal of the revenue are dismissed. 35. Ground number 2 of the appeal of the assessee is with respect to confirmation of the addition of security deposit received by the appellant over the years amounting to INR 3 40542851/ . The appellant, in the course of carrying on the business of running and maintenance of golf course, popularly known as Classic Golf Course , ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income is therefore, not relevant in facts and circumstances of the case. In this regard, it is respectfully submitted that the aforesaid allegation of the CIT(A) is not tenable inasmuch as the CIT(A) failed to appreciate that: (a) membership fees is taxable on accrual basis and not on receipt basis; and (b) Since the appellant had already offered to tax the said amount in subsequent year(s), the same income cannot be taxed twice. As regards (a) above, it is submitted that it is quite elementary that in mercantile system of accounting, amount is taxed as income in the year in which the same accrues. The concept of income and its accrual is judiciously well settled and reference, in this regard, may be made to the following decisions. In the landmark decision rendered by the Supreme Court in the case of E. D. Sassoon and Co. Ltd. v. CIT: 26 ITR 27, the question was raised as to when the commission for managing agency linked with annual net profits of the managed company accrues or arises. After deliberating on the concept of accrual of income as a whole, the Supreme Court laid down that income must be held to accrue at the point of time when the assessee contribute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulu Chetty : 165 ITR 231 (SC) - Held that interest received for 2 years is to be spread over according to the mercantile system of accounting Rama Bai Ors. V. CIT : 181 ITR 400 (SC) CIT v. Dinesh Kumar Goel : 331 ITR 10 (Del.) CIT v. Punjab Tractor Co-operative Muli-purpose Society Ltd. : 234 ITR 105 (P H)- Amount received in advance under post warranty service charges, Held that amount pertaining to the year under consideration could only be taxed not the entire amount received CIT v. Coral Electronics (P) Ltd. : 274 ITR 336 (Mad) CIT v. Hindustan Computers Ltd. : 233 ITR 366 (All) ACIT and DCIT vs. Mahindra Holidays and Resorts India Ltd: 131 TTJ 1 (ITAT (SB) - Chennai)) Treasure Island Resorts (P) Ltd. vs. DCIT : 90 ITD 814 (Hyd) Akash Lavlesh Leisure (P) Ltd v. ITO: 78 taxmann.com 338 (Hyd.) T.K. International Ltd. v. ACIT : 91 ITD 481 (Cuttack) - Consideration received towards sale of time share for 99 years held taxable over the years in which assessee was to provide services and facilities As regards (b) above, it is emphatically reiterated that since the appellant had already offered to tax the said amount in subsequent year(s), the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He further noted that it is a fact that unless the security deposits and membership fees were paid by the members, the appellant would not have granted the membership of the golf club to those members. He therefore held that both this sum of the security deposit as well as the membership fee has correctly been charged by the learned assessing officer as income of the assessee. The learned CIT A with respect to the entrance fees and membership fees has followed the decision of the honourable Supreme Court in case of Calcutta stock exchange Association Ltd 36 ITR 222 and Delhi stock exchange Association Ltd 41 ITR 495 wherein it has been held that entrance fee/membership fees received from the members is an income. 39. On careful analysis of the order of the learned CIT A, according to us he has wrongly applied the decision of the Calcutta stock exchange Ltd and Delhi stock exchange Ltd. In Calcutta stock exchange Ltd the issue of the monthly fees received by the assessee. Therefore, it cannot be said that if the fees received which is pertaining to the year itself it cannot be said not to be the income of the assessee. In the case of the assessee, assessee has received advan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w before the assessing officer about the taxability of this income in the subsequent years on accrual basis. The learned assessing officer may verify the same and if the income has been offered in subsequent years on accrual basis, the addition deserves to be deleted in this year. 40. With respect to the issue of taxability of the security deposit against the golf course membership fee of INR 3 11460578/ , the claim of the assessee is that such security deposit is refundable in nature. It is required to be refunded to the members at the end of the specified years or as per the terms of the membership. If the membership is refundable to the members, it becomes a liability of the assessee, which is required to be repaid. It is not the case of the revenue that assessee do not refund or under no obligation to refund the above sum at the end of the specified period or on happening of certain events. The identical issue arose before the honourable Gujarat High Court in principal Commissioner of income tax vs. Gulmohar Green Golf and country club Ltd 392 ITR 601 (2017) (Gujarat) wherein it was been held that the security deposit recovered from the members at the time of their enrolment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the reasons elaborated in the note submitted as hereunder: It is, at the outset, respectfully submitted that bad debts/advances written off by the appellant related to debts arising/advances made in earlier years. On perusal of the details placed at pages 98-103 of paper book, it will be noticed that the debts/ advances written off arose in the normal course of business and, therefore, write off of such debts based upon the commercial decision taken by the management of the appellant having regard to there being no chance of recovery out of the said debts/advances, were allowable as bad debt and/or loss incidental to the business. It is respectfully submitted that advances/ deposits were given by the appellant in the ordinary course of carrying on the business, and, thus, if any such amount become irrecoverable, the same would be, it is submitted, allowable as trading loss under section 28 of the Act. Attention in this regard is invited to the decision of the Delhi Bench of the Tribunal in the case of Minda HUF v. JCT: 101 ITD 191. In that case the Tribunal was pleased to hold that the CIT (A) erred in not allowing the claim of the assessee in respect of the advances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hicle repair, advance for painting, etc., (refer details of expenses placed at pages 98-103 of the paper book). Therefore, it is not correct to hold that such advances were for procuring capital expenditure. That apart, even insofar as advances for procuring capital assets was considered, in the following decisions it has been held that where the asset does not come into existence, then the expenditure incurred is allowable as revenue expenditure: CIT v. Priya Village Roadshows : 332 ITR 594 (Del.) Indorama Synthetics Ltd v. CIT: 333 ITR 18 (Del.). Expenses relating to setting up of new unit for expansion of its business operations, which was later abandoned was held to be revenue expenditure CIT v. Vardhman Spinning General Mills: 176 Taxman 157 (P H) Asiatic oxygen Ltd. v. CIT :190 ITR 328 (Cal.) Hindustan Aluminium Corporation ltd. v. CIT: 159 ITR 673 (Cal.) CIT v. Graphite India Ltd. : 221 ITR 420 (Cal) CIT v. Coromandal fertilizers: 247 ITR 417 (AP) Enpro India Ltd. v. DCIT:113 Taxman 132 (Del. Trib.) CIT v. Honda Siel Power Products Ltd. : ITA No. 758/2008 Sutlej Industries Ltd. v. ACIT : 94 TTJ 108 (Del) It is thus submitted that mer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er been acquired by the assessee. To justify the claim of the allowability assessee has relied upon the decision of the honourable Delhi High Court in case of Indo Rama synthetics Ltd vs. Commissioner of income tax 333 ITR 18 (Del). We found that in that particular decision the claim was with respect to allowability of certain expenditure in the nature of salary, wages, repairs, maintenance, design and engineering fees along with other expenditure of revenue administrative nature. It was not the case of advances given for purchase of a capital asset. It is also not the case of the assessee that advances given by it for the golf course of business, never came into existence. Thus, reliance on these decisions is misplaced. Reliance placed on another decision of the honourable Delhi High Court in CIT v. Priya Village Roadshows : 332 ITR 594 (Del.) is also misplaced because the issue before the honourable court was with respect to the claim of allowability of a feasibility study report expenditure for the existing business which even otherwise would have been allowed as revenue expenditure. In the present case, advances for the capital goods such as computers et cetera would as such co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... INR 1 9071127/ and thus it resulted into taxable income of INR 2 0928872/-. The learned AO asked the assessee to justify the market price of such land through furnishing of comparable instances. The assessee did not furnish the same. Therefore the learned AO noted that in the contiguous plot of land and high-end residential apartments were constructed and sold by the company in financial year 2000 to 2003 which yielded a profit of INR 1 3.52 crores. AO noted that assessee has sold 22.69 acre of land on 26/2/2001 at the rate of INR 1.90 crores per acre to ITC Ltd. Further on 17/3/2003 4.43 occurs were sold to ITC at the rate of ₹ 2 .03 crores per acre. He compared the situation of the plot sold during the year with the plots sold in the earlier year and found that assessee has under shown the sale consideration. Therefore, he noted that the estimated sale price should have been ₹ 7.26 Crore per acre resulting into the sale consideration of INR 2 35950000/ instead of only INR 40,000,000 is shown by the assessee thus, he made an addition of INR 1 95950000/ as suppression of the sale consideration. The matter reached to the learned CIT A who deleted the addition. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee had, vide sale deed dated 26th May, 2004, transferred a plot of land admeasuring 31 canals 2 Marlas (about 3.89 acres), situated at Village Sukhrali, Tehsil Dist. Gurgaon to M/s. Green Max Estates Pvt. Ltd., for total consideration of ₹ 4 crores . The cost of the said land was reflected at ₹ 1,90,71,127 in the books of accounts, resulting in taxable `business income of ₹ 2,09,28,872, which was shown as income in the profit and loss account. In the impugned assessment, the assessing officer, on the basis of certain other transactions of sale of land/ flat, substituted actual consideration of ₹ 4 crores by notional/ hypothetical amount of ₹ 23,59,50,000 and made addition of the difference amounting to ₹ 19,59,50,000 as alleged undisclosed income. 6.1 The findings of the A.O. in the assessment order as well as in the remand report the written and oral submission(s) made on behalf of the appellant have been carefully considered. It has been the case of A.O. that the consideration shown by the appellant was not the real consideration, but this has been done without bringing on record any evidence- direct or inferential- in support of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a hypothetical sale price adopted by the Assessing Officer. In view of the aforesaid discussion, I am of the considered view that the A.O. has failed to adduce evidence on record in support of understatement of the sale consideration by the assessee. Therefore, A.O. is directed to adopt me sale consideration of the impugned plot of residential land at the figure as disclosed by the assessee. As a result, ground no.3 is allowed. 53. The aforesaid land was, as stated above, sold by the assessee to Green Max Estates (P) Limited vide sale deed dated 26thMay, 2004 for total sale consideration of ₹ 4 crores. On perusal of the sale deed, it will be kindly noticed that the entire sale consideration of ₹ 4 crores was received by the assessee vide cheque No. 736042 dated 26thMay, 2004, drawn on Standard Chartered Bank, Greater Kailash, New Delhi. The said cheque was deposited by the assessee in its bank with Standard Chartered Bank. On perusal of the sale deed, it will also be kindly noticed that the stamp duty of ₹ 32 lacs was paid on the total sale consideration of ₹ 4 crores, which had been duly accepted by the Stamp Authorities. Apart from the consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... condition of taxability as the first, the burden lies on the revenue to show that there is an understatement of the consideration and the second condition is fulfilled. Moreover, to throw the burden of showing that there is no understatement of the consideration, on the assessee would be to cast an almost impossible burden upon him to establish a negative, namely, that he did not receive any consideration beyond that declared by him. The aforesaid observations of Hon. Supreme Court lay down a general proposition of law that it is for the Revenue to prove that the assessee has actually received money/cash more than what is declared by the assessee before seeking to substantiate the apparent consideration by any fictional/notional sum. It is trite law that in terms of section 45 read with section 48 of the Act, what could be taxed is only the actual consideration received and the same could not be substituted by any other amount unless there is positive evidence to establish any receipt/ movement of money over and above the stated consideration. In the case of CIT v. George Henderson And Co. Ltd.: 66 ITR 622 (SC), it is held that, the expression full value of the consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned assessing officer held that there is a transfer of land in assessment year 2001 02 and 2003 04 and consequently the assessee was liable to pay tax on capital gain in those relevant years. For assessment year 2001 02 and 2003 04 for the above additions were deleted by the learned CIT A and the order of the learned CIT A has been affirmed by the coordinate bench as per order dated 15/6/2016 in ITA number 3549/del/2009 and 4847/2009. In view of this, it is apparent that when the substantive addition has already been deleted on the merits of the issue, the protective addition made during the year also does not survive. 55. The learned CIT A has dealt with the above issue as under:- 8. Ground of Appeal No.5 relates to the grievance of the appellant against the action of the Assessing officer in adding a sum of ₹ 49,7184,511/- on account of Long-term capita! gains on protective basis. It was submitted on behalf of die appellant that the said issue is covered in favour of the appellant by the order of my predecessor-in-office in appellant s own case for assessment year 2001-02. 8.1 I have carefully considered the findings of the Assessing Officer and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l is with respect to the deletion of addition of INR 2 031305/ made by the learned assessing officer on account of interest disallowances. The above disallowance has been made by the learned assessing officer on the basis of the cash flow statement attached with the audited financial statements for the year ended on 31st of March 2005 holding that the assessee had out of the fresh loan of INR 7.75 crores received from ITC during the year under consideration utilized only INR 4.95 crores for repayment of old Tom loan and interest due thereon. Thus, the learned AO held that only 64 percentage of the new borrowed funds were utilized for non- business purposes and therefore disallowed proportionate sum of INR 2031305/ out of the total interest of INR 3 173915/ . The learned CIT A deleted the above addition after verification of the details holding that the out of the total borrowing of INR 77,500,000 only INR 7 5,00,000, if at all, had been utilized for repayment of the old borrowings and interest thereon of INR 4.95 crores. He further held that the learned assessing officer has not brought on record anything to show that assessee has utilized the borrowed funds for non-business pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee d. disallowance of interest expenditure of INR 2 031305/ e. disallowance of bad debts of INR 7 229915/ f. disallowance of depreciation of INR 5 108772/ g. taxability of the long-term capital gain on protective basis of ₹ 497184511/ 63. Assessee preferred the appeal before the learned CIT A who confirmed the penalty on following issues only:- a. disallowance of bad debts or advances return of amounting to INR 7 229915/ upheld by the learned CIT A b. Confirmation of the addition of INR 2 041449/ because of provision of liabilities returned back. 64. Thus, the assessee is aggrieved by the confirmation of penalty on these two above counts, and therefore it is in appeal in ITA number 4560/Del/2019. 65. The revenue is also aggrieved with the order of the learned CIT A in deleting the penalty only on the one account that the learned CIT A has deleted the penalty on the taxability of non-refundable membership fee and security deposit amounting to INR 3 40542851 as income chargeable to tax. Such appeal is preferred in ITA number 4849/Del/2011. 66. The assessee has raised the following grounds of appeal in ITA No. 4560/Del/2011 fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held by the learned CIT A and confirmed by us also in this order b. Taxability of sum of INR 2 041449/ u/s 41 (1) (a) of the act made by the learned assessing officer and confirmed by the first appellate authority and the coordinate bench. 68. Thus, the penalty has been substantially deleted by the learned CIT A and the assessee is contesting confirmation of the penalty on the about two counts only. 69. On the issue of disallowance of INR 7 229915/ in respect of the bad debts written off, before the learned assessing officer the assessee was not able to furnish the details of the exact nature of the, the year of the accrual, the reasons of the dispute and the evidence of a 4 speed for recovery along with the evidence of litigations et cetera to establish the genuineness of such claim. The above addition was sustained by the learned CIT A and by us in the appeal of the assessee. However, the issue here is whether the assessee has furnished inaccurate particulars of income to that extent. The claim of the assessee is that the assessee has return of the above sum on the basis of the commercial decision taken by the management, as there are no chances of the recovery. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance of INR 2 041449/ . 71. Before us, during the course of hearing, the assessee has preferred an application for admission of the additional ground invoking the rule 11 of the income tax (appellate tribunal s) rules, 1963 stating that the penalty levied by the learned assessing officer is beyond jurisdiction and bad in law. It is further challenge that the satisfaction in the assessment order is not properly recorded and further the notice issued on 18/12/2007 u/s 274 of the act for initiating the penalty proceedings is without specifying any charge of default. Thus, it was also prayed that the above issue is purely legal in nature and goes to the root of the matter and therefore these additional ground number 4 of the appeal should be admitted. 72. The learned departmental representative vehemently contested the above application of admission of the additional evidence and stated that such grounds of never been raised before the learned lower authorities and therefore now should not be admitted. 73. We have carefully considered the rival contention and find that the above ground of appeal is purely legal in nature and no further facts are required to be investigated. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led by the assessee for assessment year 2005 06 against the penalty sustained by the learned CIT A. 78. The revenue has raised the following grounds of appeal in ITA No. 4849/Del/2011 for the Assessment Year 2005-06:- 1. The order of the learned CIT (APPEALS) is erroneous contrary to facts law. 2. On the facts and in the circumstances of the case and in law, the learned CIT (A) has erred in deleting the penalty u/s 271(1) (c) of the Act levied by the AO on the ground that the assessee furnished inaccurate particulars of income by not showing non-refundable membership fee and security deposit amounting to ₹ 34,05,42,851/- as income chargeable to tax. 3. The CIT (A) erred in not appreciating the fact that penalty u/s 271(1) (c) can be levied on civil infraction of law. 4. The Ld. CIT (A) erred in not appreciating that the case position of law was amply clear and there was no scope of difference in opinion on this issue. Thus, the assessee intentionally chose not to declare income in respect of membership fee and scrutiny deposit received during the year. 79. As we have already crash the penalty order passed by the learned assessing officer in ITA num ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same could not, therefore, be regarded as taxable income of the appellant. 82. Both the parties submitted before us that this issue is covered in the appeal of the assessee for assessment year 2005 06 wherein, identical issue arose. Therefore the submitted that their arguments on this issue are similar to the arguments raised in that appeal on that issue. 83. We have carefully considered the rival contention and perused the orders of the lower authorities. The only issue involved in this appeal is whether the sum of ₹ 3381750/ received by the assessee as an advance membership fees is chargeable to tax in this year or not. Further, refundable deposit of INR 2 66762/ received by the assessee from individual members which is shown by the assessee is a liability, is chargeable to tax as income of the assessee or not. Identical issue has been dealt with by us in ground number 2 and 3 of the appeal of the assessee for assessment year 2005 06. Therefore, for the similar reasons given therein we hold that membership fees received by the assessee of ₹ 3381750/ as advance membership fees, and shall be chargeable to tax on the basis of the accrual income to which it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons we also hold that membership fees received in advance by the assessee is not an income in this year but is chargeable to tax in the year in which it has accrued to the assessee and as well as the non-refundable security deposit received by the assessee is not income. Accordingly, ground number 1 of the appeal of the assessee is allowed. 87. In the result, appeal of the assessee for assessment year 2008 09 is allowed. Assessment Year 2009-10 88. The assessee has raised the following grounds of appeal in ITA No. 1516/Del/2014 for the Assessment Year 2009-10:- 1. That the CIT(A) erred on facts and in law in confirming the addition of ₹ 2,03,944 on account of refundable security deposit received by appellant during the relevant assessment year, merely by following the CIT(A) orders for preceding assessment years. 1.1 That the CIT (A) failed to appreciate that the security deposit received by the appellant was in the nature of interest free security deposit and the appellant was under a legal obligation to refund the same on a member ceasing to be so. 1.2 That the CIT(A) failed to appreciate that the security deposit received by the appellant was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the hands of the assessee. This is decided as per ground number 2 and 3 of the appeal of the assessee for that year. Both the parties confirmed that there is no change in the facts and circumstances of the case. Therefore, for the similar reasons we also hold that membership fees received in advance by the assessee is not an income in this year but is chargeable to tax in the year in which it has accrued to the assessee and as well as the non-refundable security deposit received by the assessee is not income. Accordingly, ground number 1 of the appeal of the assessee is allowed. 93. In the result, appeal of the assessee for assessment year 2009-10 is allowed. Assessment year 2011-12 94. The assessee has raised the following grounds of appeal in ITA No. 4999/Del/2015 for the Assessment Year 2011-12:- 1. That the CIT(A) erred on facts and in law in upholding the action of assessing officer in making an addition of ₹ 37,06,534/- on account of security deposits and membership fees received during the relevant assessment year. 1.1 That the CIT (A) erred on facts and in law in not appreciating that, the amount received because of refundable security deposit was amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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