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TMI Blog2022 (2) TMI 1028X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee on this issue and upholding the same, ground No.1 of Revenue s appeal is dismissed. Disallowance of expenses u/s.57(iii) - HELD THAT:- This issue is also covered in favour of assessee by the consistent view taken by the Tribunal in assessee s own case for the several earlier years and since the Ld.CIT(A) has followed the view of the Tribunal, we find no justifiable reason to interfere with the order of the ld.CIT(A), wherein he has given relief to the assessee on this issue. The same is upheld and ground No.2 of Revenue s appeal is dismissed. - ITA No(s)/CO No(s) : ITA No. 1809/Ahd/2019, CO No. 37/Ahd/2020 (in ITA No. 1809/A/19), ITA No. 1917/Ahd/2019, CO No. 43/Ahd/2020 (in ITA No. 1917/A/19) - - - Dated:- 21-2-2022 - Shri Pramod M. Jagtap, Vice President And Shri Siddhartha Nautiyal, Judicial Member For the Assessee : Ms. Kinjal Shah, CA Shri Anil R. Shah, AR For the Revenue :Shri C.S. Sharma, Sr.DR ORDER PER PRAMOD M. JAGTAP, VICE-PRESIDENT These two appeals are preferred by the Revenue against two separate orders passed by the Ld.CIT(A)-8, Ahmedabad [ CIT(A) ] dated 20/09/2019 and 15/10/2019 for Assessment Years (AYs) 2014-15 2015-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Ground No.1 of the appeal pertain to addition of ₹ 2,09,81,941/- towards receipt from outsiders/temporary members on account of guest fees, income from hiring of rooms, higher charges in respect of club properties and housie fees totalling to ₹ 20981941/-. AO treated this as income by holding that these receipts are not covered by the concept of mutuality because they were not received from the permanent members who are eligible for the ultimate benefits upon dissolution of the club. AO has discussed this issue in para 6 of the impugned order and has added the same on the basis of the additions made in earlier year from A.Y. 2007-08 to A.Y. 2013-14. In the course of appellate proceedings, the Ld. AR contended that the issue is covered in favour of them by the orders of Hon'ble ITAT, Ahmedabad on the very same issue pertaining to A.Y. 2005-06 to A.Y.2010-11 and for subsequent A.Ys. The CIT(A) have deleted same additions following the orders of Hon'ble ITAT. The appellant filed the copies of the orders of Hon'ble ITAT in this regard pertaining to A.Y. 2005-06, 2008-09, 2009-10, 2010-11 and order of CIT(A) pertaining to A.Y. 2011-12, 2012-13 and A.Y. 2013-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder dt. 30/11/09. Hon'ble ITAT Ahmedabad 'B' Bench vide order dt. 11/01/13 for A.Y. 06-07 followed earlier order. My predecessor in appellant's own case for A.Y. 08-09 (order dt. 27/06/11 appeal no. CIT(A)XIV/Ac.Cir,8/178/2010-11), A.Y. 09-10 (order dt. 13/04/12 in appeal no.CIT(A)XIV/wd8(2)/160/2011-12) and in A. Y. 10-11 (order dt. 07/06/13 in appeal no.CIT(A)XIV/DCIT.Cir.8(OSD)/180/2012-13) after considering detailed explanation from appellant's, A.O.'s contention, and ratio of earlier year order held in favour of appellant for the issue of guest fees from member, hire charges of club property income from rooms fees and housie held that on the basis of principle of mutuality, no addition can be made. Therefore, respectfully following the ratio of all these order, the A.O. is directed to delete the addition so made in aggregate of ₹ 2,25,08,392/-. Accordingly, Grounds No.1 2 are allowed. The facts of the case continue to be same, the reasons for the additions by the AO are also same and in fact, AO has also followed the earlier orders hence, respectfully following orders of the Hon'ble ITAT as above and relying upon the decision of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other sources . Apart from this section there is no other section in the Income tax Act that allows deduction of any kind from income chargeable to tax under the provisions of section 56. Even under section 57, it is only section 57 (iii) that would be applicable or not applicable to the instant case as the other clauses are specific in nature. Sec. 57(iii) is the residuary clause of sec. 57 and Sec. 57(iii) states that the expenditure should not be in the nature of capital expenditure and should be laid out or expended wholly and exclusively for the purpose of making or earning such income. Thus the mandate of sec. 57(iii) is very clear and limited in its operation. That the expenditure claimed by the assessee is not in the nature of capital expenditure is not in doubt. The only crucial and critical question that would determine whether the interest expenditure is an allowable expenditure would be whether the assessee has laid out or expended the expenditure wholly and exclusively for the purpose of making or earning such income. In this connection the Hon'ble Gujarat High Court in Smt. Virmati Ramkrishna Vs. CIT [1981] 131ITR 659 (Guj) has laid down the relevant tests and bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rected to verify and allow 10% of the interest in terms of the order of Hon'ble ITAT referred hereinabove. Subject to this verification Ground No.3 is allowed. 5. Aggrieved by the order of the Ld.CIT(A), the Revenue has preferred an appeal before the Tribunal. 6. We have heard the arguments of both the sides and also perused the relevant material available on record. It is observed that both the issues raised by the Revenue in ground Nos.1 2 of its appeal for AY 2014-15 are squarely covered in favour of assessee and against the Revenue by the orders of the Tribunal passed in assessee s own case for the several earlier years, wherein a consistent stand was taken by the Tribunal right from the beginning that the addition made by the Assessing Officer on account of Guests fees from member, Hire charges, Income from rooms and Housie participation fees cannot be sustained as the principle of mutuality is applicable in the assessee s case. Since the Ld.CIT(A) has followed the consistent view taken by the Tribunal in assessee s own case for the earlier years and the Ld.DR has not been able to point out anything to the contrary, we find no infirmity in the impugned order of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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