Case Law Details
JCIT Vs Royal Western India Turf Club Ltd. (ITAT Mumbai)
Conclusion: Contribution received from the members towards infrastructure facilities should be treated as a capital receipt as these contributions were received for a specific purpose.
Held: Assessee treated the contribution received from the members towards infrastructure facilities as its capital receipt, whereas the AO held it as revenue receipt. Aggrieved, assessee preferred an appeal before the CIT(A) who upheld the claim of assessee and treated the same as capital receipt. Assessee contended that the action of CIT(A) was in the line with the decision of the Tribunal in assessee’s own case for AY 2012-13; wherein the Tribunal took note of the facts that the AO was of the opinion that onetime payment made by the members to assessee was for the special facilities, which was in the ordinary course of business and therefore according to him, it could not be treated as capital receipt and made an addition of Rs.16,81,93,250/-; and that on appeal CIT(A) held that the voluntary contributions received from the members towards infrastructure facilities were contribution received for specific purpose and should be treated as capital receipt. On appeal by the revenue. It was held that in the assessee’s own case for AY 2009-10, the Tribunal’s decision that the entrance fees received by the assessee had to be treated as a capital receipt has been upheld. The department could not point out any change in facts or law in respect of any of the assessment years. The ITAT held that the contributions were capital receipts and, hence, could not be charged to tax under the provisions of the Income Tax Act.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
These are revenue appeals against the order of the Ld. Commissioner of Income Tax (Appeals)-14, Mumbai dated 27.02.2019 for assessment year 2013-14, AY 2014-15 & AY 2015-16 respectively.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
