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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 ..... enue is dismissed. Disallowance of depreciation by not reducing the contribution of members for acquisition of assets while computing depreciation - We find that in earlier year on similar submission of parties the authorities below recorded that the assessee is also getting services from nonmembers which has to be taxed accordingly. However on disallowance of depreciation, it was held that there is principle of mutuality in case of assessee, therefore, the allowance of depreciation has no bearing as the principle of mutuality was accepted by Tribunal. However, the issue was remitted back for limited purposes with the following direction in [ 2018 (3) TMI 1983 - ITAT SURAT] - ground No.2 raised by Revenue is allowed for statistical purposes in above terms. Disallowance of loss on sale of fixed asset and deleting the addition on account on account of late payment of TDS and penalty charges respectively - HELD THAT:- We find that Assessing Officer disallowed the expenses on account of loss on sale of fixed asset and interest on late payment of TDS and penalty charges. CIT(A) allowed relief to the assessee by taking view that the assessee has not claimed deduction of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of loss on sale of fixed assets on the basis of applicability of principle of mutuality despite the fact that the principle of mutuality itself is not applicable in the first place in the instant case. iv) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs.60,455/- and Rs.52,961/- made on account of disallowance of late payment of TDS and penalty charges respectively, by allowing these deductions considering them to be claimed on the basis of principle of mutuality despite the fact that the principle of mutuality itself is not applicable in the first place in the instant case. 2. Brief facts of the case are that assessee-company is a Public Limited Company, engaged in the treatment of effluent and waste emanating 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 com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein 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 ITA No.833/AHD/2015 and ITA No.3295/AHD/2015 for assessment years 2010-11 2011-12. Ld. AR for the assessee submits that copy of decision in ITA No.833/AHD/2015 is placed on record. 5. On the other hand, Ld. CIT-DR for the Revenue supported the order of Assessing Officer. Ld. CIT-DR submits that assessee is engaged in the business activity and having surplus from the alleged contribution by its members. 6. We have considered the rival submission of both the parties and perused the order of lower authorities. The Assessing Officer denied the benefit of concept of mutuality by taking view that the department has already filed against the earlier decision of Tribunal in various years. We find that Ld. CIT(A) allowed relief to the assessee by following the decision of Tribunal in assessee s own case for earlier year (supra). We note that assessee s own case for AY 2010-11, the co-ordinate bench of Tribunal while following the order in earlier year accepted the status of assessee as a mutual as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e find that the issue is covered against the Revenue and we have no reason to deviate from the said finding recorded by the co-ordinate bench of the Tribunal. Accordingly, following the same, we hold that the principle of mutuality has accepted by the Tribunal on earlier years is also hold good in the assessment under consideration. Therefore, the same 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 accordance with direction in order dated 22.03.2018 (supra) and passed the order in accordance wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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