TMI Blog2005 (7) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... f assessment proceedings, as the assessee in the preceding assessment year i.e., asst. yr. 1997-98, after detailed discussion had accepted the AO's view that the assessee's method of working out the taxable receipt of a year out of total 'membership fee', was not in accordance with the law and accepted the AO's method which was based on the treatment ostensibly given in the case of M/s Sterling Resorts Ltd. Madras, and on which issue, the assessee had not filed any appeal in that very year? (ii) Whether, on merit, the CIT(A) was justified in holding that only a part of the 'time sharing membership fee' which is equivalent to the total fee divided by the number of years for which a member is eligible to enjoy the 'facilities' is only taxab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : (1991) 187 CTR 363 (All)." 3. We take up ground No. (iv) first on the reasoning that for asst. yr. 1997-98 in assessee's own case in ITA No. 584/Chd/2002, vide order dt. 30th May, 2005, which was heard together with appeal of this year, the Tribunal disposed of similar ground. In that year, the appeal of the Revenue was rejected. That decision will squarely apply to this year also. We accordingly reject this ground of appeal raised for 1998-99. 4. Ground Nos. (i) and (ii), only one issue being that out of total time-sharing membership fees received by the assessee, 45 per cent thereof was sought to be deducted from the written down value of the block assets by the AO which was challenged by the assessee before the CIT(A). The relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given by the assessee to them. He thus reduced the WDV of the building as mentioned above. Assessee being aggrieved, (preferred) appeal to the CIT(A) wherein the assessee submitted written submissions. Relying upon the submissions of the assessee, the learned CIT(A) held that the AO was not justified in reducing the written down value by 45 per cent which works out to Rs. 37,33,716. The CIT(A) further held that there was no justification to enhance income as proposed by the AO and, therefore, this ground of appeal was decided in favour of the assessee. 5. The learned Departmental Representative relied on the order of the AO and did not offer any plausible explanation for the reduction of 45 per cent amounting to Rs. 37,33,716 from the WD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he total receipt keeping in view the period of lease in relevant assessment year and similarly in subsequent assessment years. We, therefore, find no reason in not accepting the well-reasoned order of the CIT(A) on the issue for the relevant year. Accordingly, we reject the appeal of the Revenue. 9. Ground No. 3 regarding deletion of allowance of Rs. 12,14,672 being 1/5th of pre-operative expenses and deferred revenue expenditure of Rs. 19,64,489. The AO did not allow these expenditures on the ground that these were not claimed by the assessee in the return of income and later on these were claimed during the course of assessment proceedings vide letter dt. 26th Feb., 2001. 10. The assessee appealed before the CIT(A). In regard to pre-o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness of the company. However, in respect of the pre-operative expenses amounting to Rs. 12,14,672, I do hold that these expenses were incurred for the construction of the new hotel building and therefore, this would go to increase the cost of the capital assets of the company and accordingly, the claim of Rs. 12,14,672 is held to be capital expenditure. The same should be treated as such, and depreciation allowed thereon by the AO during the year under consideration by capitalising this amount towards the building account. As regards deferred revenue expenditure, the claim appears a bona fide one. Also, by virtue of such expenditure, the appellant could collect a lot of revenue as time share receipts and, therefore, such expenses are hel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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