2017 (10) TMI 246 - AT - Income Tax

Assessee's Appeal Partly Allowed, Issues Remanded for Fresh Examination

M/s. Cricket Club of India Pvt. Limited Versus ACIT-1 (1), Mumbai

M/s. Cricket Club of India Pvt. Limited Versus ACIT-1 (1), Mumbai - Tmi Issues Involved:1. Royalty Receipts2. Deduction of Proportionate Expenditure Relating to Royalty Income3. Taxability of Catering Revenue4. Interest Income from UTI and GOI Tax-Free Bonds5. Addition of Interest Income6. Determination of Annual Value of Property7. Disallowance of Payment of Water Charges8. Disallowance under Section 14A of the Act9. Applicability of MAT Provisions10. Claim for MAT Credit11. Claim of Depreciation on Addition Made in A.Y. 2007-0812. Enhancement of Income by CIT(A)13. Alternative Grounds to Ground No. 614. Grounds Not Pressed by the AssesseeDetailed Analysis:1. Royalty Receipts:The assessee did not press the ground relating to royalty receipts as it had already offered the same in the revised return of income. Consequently, this ground was dismissed as not pressed.2. Deduction of Proportionate Expenditure Relating to Royalty Income:The assessee requested that this issue be restored to the file of the AO for examination, similar to the directions given in AY 2007-08. The Tribunal agreed and restored this issue to the AO for examination in accordance with the law.3. Taxability of Catering Revenue:The assessee claimed exemption of catering revenue under the principles of mutuality. The AO and CIT(A) did not accept this claim for the amount received from outside caterers. However, the Tribunal noted that in a similar case (MIG Club Vs. ACIT), it was held that such receipts are not taxable under the principles of mutuality. Therefore, the Tribunal directed the AO to delete the impugned addition.4. Interest Income from UTI and GOI Tax-Free Bonds:The assessee claimed that interest income of Rs. 51.69 lakhs is exempt under Section 10(15) of the Act. The Tribunal set aside the order of the CIT(A) and directed the AO to examine this claim and take a decision in accordance with the law.5. Addition of Interest Income:The assessee argued that interest income of Rs. 233.03 lakhs was added twice, resulting in double taxation. The Tribunal restored this issue to the AO for verification and appropriate action.6. Determination of Annual Value of Property:The AO added 10% to the annual value reported by the assessee, which was confirmed by the CIT(A). The Tribunal restored this issue to the AO, directing verification of the applicability of the Maharashtra Rent Control Act, 1999, consistent with the Tribunal's decision in AY 2006-07.7. Disallowance of Payment of Water Charges:The AO disallowed the claim of water charges as part of municipal tax, which was upheld by the CIT(A). The Tribunal, following a previous decision, directed the AO to allow the deduction of water charges/tax paid to BMC under Section 23(1) of the Act.8. Disallowance under Section 14A of the Act:The Tribunal noted that similar matters were restored to the AO in previous years. Consistently, the Tribunal restored this issue to the AO for fresh examination in accordance with the law.9. Applicability of MAT Provisions:The Tribunal upheld the CIT(A)'s decision that MAT provisions apply to the assessee, consistent with previous Tribunal decisions.10. Claim for MAT Credit:The Tribunal found merit in the assessee's claim for MAT credit of Rs. 109.11 lakhs and restored this issue to the AO for appropriate action as per the relevant provisions of the Act.11. Claim of Depreciation on Addition Made in A.Y. 2007-08:The Tribunal restored this issue to the AO, directing that it be decided after the receipt of the High Court's order, as the matter is consequential and dependent on the outcome of the appeal pending before the High Court.12. Enhancement of Income by CIT(A):The Tribunal noted that the CIT(A) enhanced the income without considering the assessee's written submissions. In the interest of natural justice, the Tribunal restored this issue to the CIT(A) for fresh examination after providing adequate opportunity to the assessee.13. Alternative Grounds to Ground No. 6:The Tribunal restored these alternative grounds to the CIT(A) for adjudication after providing adequate opportunity to the assessee, as they are contingent on the outcome of Ground No. 6.14. Grounds Not Pressed by the Assessee:The assessee did not press grounds Nos. 8 to 10, and accordingly, these grounds were dismissed as not pressed.Conclusion:The appeal filed by the assessee was treated as partly allowed for statistical purposes. The Tribunal restored multiple issues to the AO and CIT(A) for fresh examination and appropriate action in accordance with the law. The order was pronounced in the Court on 4.10.2017.