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TMI Blog2017 (2) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... Services P. Ltd. [2003 (4) TMI 56 - BOMBAY High Court] held that any sum paid by a member to acquire the rights of a club is a capital receipt. We further note that for the assessment year 2003-04, while framing the assessment under section 143(3) of the Act and also for the assessment year 2001-02, identically the claim of the assessee was allowed. No contrary material was brought to our notice. It is also noted that even the revisional jurisdiction under section 263 was invoked by the Department and, finally, the entrance fees was treated as capital receipt, therefore, we find force in the contention of the assessee. If this issue is analysed on the principle of consistency, we note that in earlier years, identically the claim of the assessee was decided in favour of the assessee by accepting the entrance fees as capital receipt, therefore, we are of the view that unless and until contrary facts are brought on record by the Revenue, no U-turn is permissible - Decided in favour of assessee Receipt of interest-free deposits - capital receipts or revenue receipt - Held that:- As per the agreement, the first security deposit of ₹ 10 crores stand forfeited, as liquidity d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. Our attention was invited to the order of the assessment year 2003-04 passed under section 143(3) of the Act. It was pleaded that even on the principle of consistency, it has to be allowed as capital receipt. Plea was also raised that for the assessment year 2005-06, the appeal was decided ex parte and the amount was not added. It was explained by the learned counsel that for the assessment year 2005-06, the Tribunal sent the matter to the file of the learned Commissioner of Income-tax and the issue taken under section 263 was decided in favour of the assessee treating the amounts as capital receipt. Reliance was placed upon the decision in CIT v. Diners Business Services Pvt. Ltd. [2003] 263 ITR 1 (Bom). The learned counsel explained that entrance fees is only right to use the services of the club. Further, reliance was placed upon the decision in CIT v. Gopal Purohit [2011] 336 ITR 287 (Bom) and CIT v. Excel Industries Ltd. [2013] 358 ITR 295 (SC). 2.2. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee is in the business of conducting horse races and also providing hospitality services to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n favour of the assessee by accepting the entrance fees as capital receipt, therefore, we are of the view that unless and until contrary facts are brought on record by the Revenue, no U-turn is permissible. The learned Assessing Officer is bound by rule of consistency. The following cases support the case of the assessee : (i) Parashuram Pottery Works Co. Ltd. v. ITO [1977] 106 ITR 1 (SC); (ii) CIT v. A. R. J. Security Printers [2003] 264 ITR 276 (Delhi); (iii) CIT v. Neo Poly Pack (P.) Ltd. [2000] 245 ITR 492 (Delhi); (iv) CWT v. Allied Finance Pvt. Ltd. [2007] 289 ITR 318 (Delhi); (v) Berger Paints India Ltd. v. CIT [2004] 266 ITR 99 (SC); (vi) Deputy CIT v. United Vanaspati Ltd. [2005] 275 ITR (AT) 124 (Chandigarh); (vii) Union of India v. Kaumudini Narayan Dalal [2001] 249 ITR 219 (SC); (viii) Union of India v. Satish Panalal Shah [2001] 249 ITR 221 (SC); (ix) B. F. Varghese (No. 2) v. State of Kerala [1969] 72 ITR 726 (Ker); (x) CIT v. Narendra Doshi [2002] 254 ITR 606 (SC); (xi) CIT v. Shivsagar Estate [2002] 257 ITR 59 (SC); (xii) Pradip Ramanlal Sheth v. Union of India [1993] 204 ITR 866 (Guj); (xiii) Radhasoami Satsang v. CIT [1992] 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 10 crores to the assessee. The deposit was in addition to interest-free security of deposit of ₹ 125 crores, which was payable by M/s. Pegasus Resorts and Hotels Pvt. Ltd., to the assessee, over next three years had the construction work would have been completed as per the agreement. This total amount of ₹ 125 crores was to be repaid to M/s. Pegasus Resorts and Hotels Pvt. Ltd. only after 40 years in instalments of ₹ 13.50 crores per year from 41st year. It means the assessee was earning interest on this deposit. Over and above this, the assessee was to recover royalty at the rate of 6.25 crores per year, which increase to ₹ 24.57 crores from 41st year. As per paragraph 5.1 of the agreement, the first security deposit of ₹ 10 crores stand forfeited, as liquidity damages if due to any reason, the work related to new development is not completed by M/s. Pegasus Resorts and Hotels Pvt. Ltd. Since the new development could not be started due to inability of M/s. Pegasus Resorts and Hotels Pvt. Ltd., the aforesaid amount was forfeited by the assessee. We are of the view that since the amount of ₹ 10 crores was in the nature of deposits, i.e., ..... X X X X Extracts X X X X X X X X Extracts X X X X
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