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TMI Blog2021 (11) TMI 1123X X X X Extracts X X X X X X X X Extracts X X X X ..... pectively. In both the appeals, the Revenue has raised certain common grounds of appeal except variance of amount, facts in both the appeals are almost similar, therefore with the consent of both the parties both the appeals, clubbed, heard together and are decided by the consolidated order. For appreciating the fact, the Revenue has raised the following grounds in ITA No.153/SRT/2018 for AY 2013-14 are treated as 'lead' case. The revenue has raised following grounds of appeal; "i) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the benefits of principle of mutuality to the assessee in the instant case despite the fact that the activity carried out by the assessee is not a charitable one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manating out of various industries in Vapi region. The assesseecompany was set-up by various members of the Vapi Industries Association and took over Common Effluent Treatment Plant (CETP) from Gujarat Industrial Development Corporation. The assessee filed its return of income for assessment year 2013-14 on 28.09.2013 declaring income of Rs.2.18 crores. The case was selected for scrutiny. The assessment was completed under section 143(3) of the Income Tax Act, 1961 (in short 'the Act') on 30.03.2016. The Assessing Officer while passing assessment order assessed total income of Rs.2.44 crores as business income by making addition of the loss on sale of fixed asset, and capital contribution of Rs.24,25,715/-. The Assessing Officer disallowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Ld. CIT(A) the Revenue has filed present appeal before the Tribunal. 4. We have heard the submission of Ld. Commissioner of Income Tax-Departmental Representative (CIT-DR) and Ld. Sr. DR for the Revenue and Ld. Authorized Representative (AR) for the assessee. At the outset of hearing the Ld. AR for the assessee submits that grounds of appeal raised by Revenue are covered in favour of assessee. The Ld. AR for the assessee submits that ground No.1 of appeal is covered in favour of assessee by series of decisions in assessee's own case in earlier year, wherein the assessee has been accepted as mutual association. The Ld. AR for the assessee submits that Ld. CIT(A) while allowing the relief to the assessee followed the order of Tribunal in I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn under member's fund in the liability as capital which is utilized for acquisition of assets of the assessee and in no way, can be reduced in cost for asset by applying of section-43. The ld. AR for the assessee submits that Ld. CIT(A) appreciated the fact and granted relief to the assessee. 9. On the other hand, Ld. Sr-DR of the Revenue supported the order of Assessing Officer. The Ld. Sr. DR for the revenue submits that Assessing Officer disallowed the depreciation on the ground that the contribution received from the members for cost of asset should be reduced from WDV for calculation of depreciation allowable. On the other hand, the assessee's stand was depreciation was debited to the income and expenditure account in its books and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is allowed. However, the Assessing Officer is directed to verify the claim of assessee whether any outsider is getting services or not from nonmembers which as to be taxed accordingly after giving full opportunity to the assessee. So far allowances of depreciation and prior period expenses are concern, as we held the principle of mutuality in the case of assessee, therefore, the allowances of depreciation and prior period expenses by Assessing Officer has no bearing as the principle of mutuality has been accepted by the Tribunal. In the result, appeal of the assessee is set aside and disposed of for statistical purposes." 11. Considering the order of co-ordinate Bench (supra), we direct the Assessing Officer to verify the fact that in ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. CIT(A) accepted the contention of assessee that once the expenses is not claimed as the deduction of no disallowance is sustainable. Ld. CIT(A) has accepted the contention of the assessee that no disallowance was claimed is permissible. Thus, we find that order of Ld. CIT(A) is affirmed. In the result, ground No.3 & 4 raised by Revenue are dismissed. 15. In the result, the appeal of the revenue is partly allowed. ITA No.732/SRT/2018 A Y 14-15 16. The Revenue has raised similar grounds of appeal as raised in appeal for assessment year 2013-14, which we have already dismissed, except restoring the part of Ground No.2 to the assessing officer, therefore, following the principle of consistency, the grounds of appeal raised by Revenue in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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