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TMI Blog2020 (5) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has claimed depreciation on golf course @15% considering it as 'plant and machinery'. The ld AO denied the depreciation for the reason that according to him golf course is developed on the land and whatever improvement is made on that land, it remain as a land. According to him, only the value of land is enhanced by constructing golf course thereon. Thus, according to him it is only land, which is not depreciable. Hence, it amounts to allowing depreciation on land, land being not a depreciable assets, he disallowed it. 4. The assessee challenged the same before the ld CIT (A), he held that the golf course is a 'building' and depreciation should be allowed considering the same as a 'building'. The assessee aggrieved with that order has preferred appeal before us. 5. Ground NO. 1-assessee challenges that depreciation on the golf course should be allowed considering it as 'plant and machinery'. 6. We have heard the rival contention and find this issue has been considered by the coordinate bench in assessee's own case for Assessment Year 2005-06 to 2011-12 as per order dated 26.08.2019 wherein, the coordinate bench has held that the golf course is a plant and machinery an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." 7. As there is no change in the facts and circumstances, we respectfully following the decision of the coordinate bench, allow ground No. 1 of the appeal directing the ld AO to grant depreciation on cost of developing golf course on land considering it as plant and machinery. 8. Second ground of appeal is with respect to the addition of Rs. 1300016/- on account of security deposit and membership fees. The assessee received the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore 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 advance membership fees for which the services were to be rendered in subsequent years and assessee has already offered such income in the subsequent years on accrual basis. It is not the case of the revenue that asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 hel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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