TMI Blog2016 (10) TMI 1351X X X X Extracts X X X X X X X X Extracts X X X X ..... present case. In view of the aforesaid facts, we find no reason to interfere with the order of the ld.CIT(A) and thus the ground of Revenue is dismissed. Disallowance of deduction claimed from income from other sources u/s 57(iii) - disallowance on account of 'income from other sources' u/s57 which Assessee failed to prove to have been incurred wholly exclusively for the purpose of earning such interest income - HELD THAT:- As from A. Y. 1989-90 onwards, the issue had become settled i.e. the interest income would be charged as income from other sources and 10% of the same would be allowed as deduction for concerned expenses. In the A. Y. 2010- 11, the AO is raking up the controversy after 20 years on the issue which has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is a mutual association not engaged in any business activity and running a club for its members. Return of income was filed on 15.10.2010 declaring total income at Rs..56,70,260/-. The case was selected for scrutiny assessment and notice u/s 143(2) of the Act was issued on 21.9.2011 followed by notice u/s 142(1) of the Act. Necessary details were called for and duly replied by the ld. AR furnishing various details. Assessment was completed at ₹ 1,93,98,290/- after making addition of ₹ 1,31,17,183/- towards guest fees, hire charges and income from rooms and also addition by way of disallowance u/s 57(iii) of the Act at ₹ 6,10,847/-. 3. Aggrieved, assessee went in appeal before ld. CIT(A) who deleted the impugned additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts in deleting the addition of ₹ 1,31,17,183/- made on account of Guest fees, hire of rooms and hire charges in respect of club properties. The addition of ₹ 1,31,17,183/- was made on account of guest fees from members at ₹ 807541/-, hire charges from members in respect of club property at ₹ 1264218/- and income from room s at ₹ 11045424/-. The above issue was adjudicated by the Co-ordinate Bench for Asst. Year 2009-10 in ITA No.1467/Ahd/2012 by observing as below :- 6. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below as well as the judgement/decision relied upon by the parties. The issue in the present case is whether the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erein Hon'ble ITAT vide its order dt:30-10-2009 considered the similar disallowance and addition in respective years and after taking into account the factual and legal position as well as earlier year's appellate order in the, case of appellant as well as the Hon'ble ITAT Ahmedabad D Bench decision Dt:23-02-07 passed in the case of Rajpath Club Ltd. in ITA No.2830/Ahd/2006 relating to A.Y. 03-04 allowed the appeal of the appellant for deleting such additions. It is, therefore, respectfully following such decision, the addition so made is directed to be deleted. The appellant gets a relief of ₹ 52,95,900/-. 3. Since Id. CIT(A) has given relief to the assessee by placing reliance on the decision of Hon'ble ITAT i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he purpose of earning such interest income. 11. During the course of assessment proceedings, ld. Assessing Officer observed that assessee has claimed 10% of interest income at ₹ 6,10,847/- as deduction u/s 57(iii) of the Act. When Assessing Officer raised question for this deduction assessee replied that they have been consistently allowed 10% as deduction out of taxable income which is not arising on principles of mutual consent. This has been established and allowed by the Tribunal since Asst. Year 1966- 67 onwards. However, the ld. AO denied this claim. 12. We observe that in appeal before ld. CIT(A) the issue has been decided in favour of assessee by ld. CIT(A) observing as below :- 3.3 Decision: I have carefully pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment up to A. Y. 2009-10, the disallowance made by the A. O. is hereby deleted. The ground of appeal is, therefore, allowed. 13. We further observe that the Co-ordinate Bench in ITA Nos.2121 2122/Ahd/1972-73 for Asst. Years 1966-67 1967-68 has decided this issue for the first time and decided by observing as under :- 10. This brings us to consider the other aspect of the matter. viz. whether any deduction would be permissible in computing the income from interest. Section 57(iii) permits deduction of expenditure other than capital expenditure laid down or expended wholly and exclusively for the purpose of making or earning the income from other sources, which, in the interest case, is income from interest. The assessee would ..... X X X X Extracts X X X X X X X X Extracts X X X X
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