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TMI Blog2023 (1) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... d against revenue. Allowances of depreciation - not reducing the contribution of members for acquisition of assets while computing depreciation - HELD THAT:- As decided in assessee own case for assessment year 2013- 14 [ 2021 (11) TMI 1123 - ITAT SURAT] we held the principle of mutuality in the case of assessee, therefore, the allowances of depreciation and prior period expenses by AO 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. This ground of Revenue s appeal is allowed for statistical purposes. - ITA No.72/SRT/2022 - - - Dated:- 26-12-2022 - Shri Pawan Singh, Judicial Member And Dr Arjun Lal Saini, Accountant Member For the Assessee : Ms. Arti N.Shah, C.A For the Revenue : Shri Ashok B.Koli, CIT-DR ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by Revenue is directed against the order of learned National Faceless Appeal Centre (for short to as Ld.NFAC )/Ld.CIT(A) dated 29.12.2021 for assessment year 2019-20, which in turn arises out assessment order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s VIA ) to take effective steps for treatment of effluent and disposal of hazardous waste in and around Vapi, Gujarat. The assessee-company has been carrying its activities for its members on the members of mutuality. The receipt for effluent charges are received from its members. The assessee filed its return of income for assessment year under consideration on 23.10.2019 declaring total income of Rs.4.71 crores. The return of income was processed by CPC, Bengaluru vide order dated 10.06.2020. The CPC Bengaluru while processing the return of income considered Rs.54.27 Crore as income of the assessee by treating as income not covered by mutuality. 6. Aggrieved by the additions / disallowances by CPC, Bengaluru, the assessee filed appeal before Ld. CIT(A) and case of assessee migrated to Ld.NFAC. Before Ld.NFAC/CIT(A) the assessee filed detailed written submission. The submission of assessee are recorded in para-6 and para-8.2 of the order of Ld.NFAC/CIT(A). The assessee in its submission, submitted that assessee-company was incorporated as per Section 26 of the Companies Act, 1956 as per directive of Hon'ble jurisdictional High Court to take effective steps for treatment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh the orders of lower authorities carefully. At the outset of hearing, Ld. AR for the assessee submits that grounds of appeal raised by Revenue are squarely covered by the decision of Tribunal in assessee s own case for various assessment years. The Ld. AR for the assessee filed copies of decision of Tribunal for assessment years 2007-08 and 2008-09 in ITA Nos.1310/AHD/2010, 2778/AHD/2011 2835/AHD/2011 all dated 20.04.2012, wherein the principle of mutuality was accepted by the Tribunal. The Ld. AR for the assessee submits that in appeal for assessment year 2009-10 in ITA No.1294/AHD/2013 dated 22.08.2016, the Tribunal also followed earlier years (supra) and assessee was again allowed relief by the decision of Co-ordinate Benches of ITAT Ahmedabad. The Ld. AR for the assessee submits that similar appeals for Revenue for assessment years 2010-11 and 2011-12 in ITA No.s 833/AHD/2015 and 3295/AHD/2015 dated 22.03.2018 were also dismissed by the Co-ordinate Benches of ITAT Ahmedabad. 9. On the other hand, Ld. CIT-DR for the Revenue submits that the appeals of Revenue in challenging the order passed by Tribunal in earlier years are pending before the Hon'ble jurisdictional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 association in order dated 22.03.2018 in ITA No.833/AHD/2015 (supra). No contrary facts or law is brought to our notice to take other view. Thus, we affirm the order of Ld. CIT(A). 7. In the result, ground No.1 raised by Revenue is dismissed. 12. We further find that by following the order in ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of both the parties and gone through the orders of authorities below. We find that in earlier year on similar submission of parties the authorities below recorded that the assessee is also getting services from non-members 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 ITA No833/AHD/2015 (supra) which is reproduced below:- 12. In the light of findings given by the Tribunal in the appellant s own case, we 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 service ..... X X X X Extracts X X X X X X X X Extracts X X X X
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