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2015 (9) TMI 448 - ITAT MUMBAIConcept of mutuality - Enhancement of income by the FAA - Held that:- FAA for enhancing the income during appellate proceedings, the FAA should not travel outside the record, i.e., the return made by the assessee or the assessment order of the AO, that the power of enhancement was restricted to the sources of income which have been the subject-matter of consideration by the AO from the point of view of taxability,that consideration did not mean incidental or collateral examination of any matter by the AO in the process of assessment,that there must be something in the assessment order to show that the AO had applied his mind to the particular subject-matter or the particular source of income with a view to its taxability or to its non-taxability and not to any incidental connection. In the assessment order passed by the AO, there is nothing to show that he had applied his mind to the particular subject matter i.e. applicability of principle of mutuality. Therefore,the FAA was not justified in enhancing the income of the assessee by applying principles of mutuality for the year under appeal. - Decided in favour of assessee. Exemption from payment of income tax on interest earned - Decided against assessee as per the decisions of Banglore Club case [2013 (1) TMI 343 - SUPREME COURT] Allowance of carry forward of short term and long term capital losses to the subsequent assessment years - Held that:- We find that the assessee made a request to the FAA for admitting fresh evidence,that the FAA had admitted the same and had decided the issue in favour of the assessee without calling for a remand report from the AO.In our opinion,he should have called for a report from the AO in this regard. We are of the opinion that in the interest of justice,the matter should be restored back the file of the AO for fresh adjudication and verification of the documents produced by the assessee before the FAA - Decided in favour of revenue for statistical purposes. Allowance of loss on sale of fixed assets - Held that:- We find that the figure of loss claimed on sale of depreciable asset is different from the disallowance made by the AO.In our opinion it needs further verification.Therefore, in the interest of justice we are remitting back the matter to the file of the AO for verifying the exact figure of the loss claimed by the assessee and to allow the same if it has been disallowed by the assessee itself while computing the income for the year under appeal.- Decided in favour of revenue for statistical purposes. Short deduction of TDS - CIT(A) deleted addition - Held that:- As stated earlier the assessment was completed under section 144 of the Act and no details whatsoever was produced before the AO by the assessee during the assessment proceedings, that the FAA held that part of the TDS payment was shown in the earlier years. In our opinion it was the duty of the FAA to call for the remand report from AO before allowing the appeal.Therefore, in the interest of justice we are remitting back the matter to the file of AO to decide the issue again.The assessee is directed to produce relevant certificates before the AO.The AO would give credit for the taxes paid paid in the earlier years,as claimed by the assessee - Decided in favour of revenue for statistical purposes. Treatment to be given to the entrance fee received by the assessee from Life Members - Held that:- The issue has been settled by the Bombay High Court in its own case in assessment year 1963-64 and assessment year 1964-65 (1990 (4) TMI 51 - BOMBAY High Court) as held that the entrance fee paid by the life members equivalent to the amount collected from ordinary members is a capital receipts not liable to tax and the balance amount is in fact compounded payment, in lieu of annual subscriptions and therefore these are revenue receipts. Thus it will be seen that Bombay High Court has not laid down any ratio for the purpose of splitting entrance fee between revenue and capital receipt. Therefore, the Assessing Officer was wrong in splitting the fee received from life members into capital and revenue receipts in 20:80 ratio. Assessing Officer was not justified in making an addition to the income of the Appellant on account of subscriptions transferred from the advance subscription account of ordinary members to the life members subscription account - Decided in favour of assessee.
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