TaxTMI 
TaxTMI 
2017 (9) TMI 725
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....0/- to the income of the Trust by treating the same as revenue receipt. 2. The Ld. CIT(A) has erred in confirming the action of A.O of adding Life Membership Fee of Rs. 9,73,800/- to the income of the Trust on the ground that the same is not corpus donations u/s 11 (1 )(d) as no documentary proof was submitted which was never asked for. 3. The Ld. CIT(A) has erred in confirming the action of A.O of adding Life Membership Fee of Rs. 9,73,800/- to the income of the Trust on the ground that justification about the non-applicability of Bombay high Court decision in the case of WIAA Club to the present case was not given though the same was never asked for. 3. Briefly the facts of the case are that the assessee is a trust registered with....
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....d as the same is not voluntarily contribution for specific purpose which the assessee trust can claim exemption u/s.11(1)(d) of the Act. (2) Life membership is the tees charged by the trust and members get for future benefits, cannot be considered as voluntarily contribution for specific purpose. (3) Reliance is placed in the case of WJ.A.A Club Ltd v/s CIT {1979} 2 Taxman 57 (Bom), the Hon"ble Bombay High Court held that "it would be seen that the lump sum payment of Rs. 2,500/- in the case of life membership has two elements in it. A part is entrance fee and the other part is consolidated commuted payment in lieu of annual subscriptions. The element of entrance fee which in this case has to be computed at Rs. 500 to maintain parity ....
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....revenue and a Dart of it is of capital nature. The accounting system followed by the appellant: trust has already taken care of the theory discussed in the said decision. iii. Appellant also submitted that, for earlier assessment year i.e. A.Y. 2011- 12, there was increase of Rs. 5,38,000/- towards life membership fund which was not routed through Income & Expenditure account. Despite this fact, no addition towards life membership fees was made in the assessment completed under 143(3) for the said year. Thus, the method consistently adopted by the appellant is accepted by the department. It is worth noting that the trust is following same accounting treatment and policies year to year and there has been no change. iv. In view of the f....
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....eparate proceeding. Similar observations were made by Hon'ble Supreme Court in the case of New jehangir Vakil Mills Co Ltd Vs CIT(SC) 49 ITR 137, and Bharat Sanchar Nigam Ltd & Anr. Vs Union of India & Ors (SC) 282 ITK 273. Further in the case of CIT Vs Seshasayee Industries Ltd. (Madras) 242 2TR 691, it was held by the Hon'ble Madras High Court that the fact that if claim was not questioned in earlier years does not entitle the assessee to contend that the law would not be applied during the course of assessment year. Further, in the case under consideration, legal issue as regards the nature of receipt being capital or revenue has arisen. It has been held by Hon'ble courts that where legal issue arises, the principle of resjud....
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....pital receipt. Ld. Counsel referred to the following case laws: 1. Radhasoami Satsang v. CIT [1992] 193 ITR 321 (SC) 2. CIT vs. Gopal Purohit in ITA No.1121 of 2009 dated 6.1.2010 3. Indian Society of Anaesthesiologists vs. ITO [2014] 47 taxmann.com 183 (Chennai - Trib.) 4. Janata Trust vs. ITO [1986] 16 ITD 147 (Bom) 9. Per Contra, the learned Departmental Representative (DR) submitted that the authorities below have decided the issue against the assessee by referring to and following a Hon'ble jurisdictional High Court decision which is germane. He submitted that it is settled law that not following an Hon'ble jurisdictional High Court decision results in mistake apparent from record. Hence, the ld. DR submitted that sinc....
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....ommuted payment in liew of annual subscriptions. It was expounded that the element of entrance fee was to maintain parity with ordinary members, and the same was of return for investing the right of membership and hence it was the capital receipt, the other element was the consolidation of the revenue receipt and hence taxable. From this it follows that treatment of life membership fee depends upon its objective/attribution. 12. Now I examine the present case on the touchstone of above said case law. I find that the assessee has made submissions before the learned CIT(A) that part of life membership fee is attributed towards subscription of magazine, which is otherwise charged to normal members. In such circumstances, in my considered opin....