TaxTMI 
TaxTMI 
2021 (1) TMI 1349
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....r dated 01.12.2016 for the assessment years 2009-10, 2012-13, 2013-14 and another appeal is directed against the order of the ld. Commissioner of Income Tax (Appeals)-2, Kolhapur dated 01.09.2017 for the assessment year 2014-15 respectively. 2. Since the identical issue is in all the above four appeals, we proceed to dispose of the same vide this common order. 3. For the sake of convenience and clarity, the facts relevant to the assessment year 2009-10 in ITA No.604/PUN/2017 are stated herein. 4. Briefly, the facts of the case are that the appellant is a co-operative society engaged in the business of banking. The return of income for the assessment year 2009-10 was filed on 08.10.2009 disclosing a total income of Rs.9,19,216/-. Ag....
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....the ld. Sr. Counsel for the assessee argued only grounds of appeal no.1 and 2 and grounds of appeal no.3 and 4 were not pressed for hearing. Therefore, the only issue which requires to be adjudicated by us whether the Membership fee received from class B members/shareholders is taxable as revenue receipts. The ld. Sr. Counsel vehemently submitted that it is mandatory to transfer the Membership fee or normal entrance fee received from the members to the reserve funds as per Bye Laws of appellant society. There is no distinction between the A class and B class members. In support of this, he also filed the Bye Laws of the appellant society. The Bye Laws of the society should not be contrary to the Maharashtra State Co-operative Society Act, 1....
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....ital or revenue in nature, we may still advert to the fact that this Court has also, on general principles, held that such subscriptions would be capital receipts, and if they were treated to be income, this would violate the Companies Act. It is, therefore, incorrect to state, as has been stated by the High Court, that the decision in Peerless General Finance and Investment Co. Limited (supra) must be read as not having laid down any absolute proposition of law that all receipts of subscription at the hands of the assessee for these years must be treated as capital receipts. We reiterate that though the Court's focus was not directly on this, yet, a pronouncement by this Court, even if it cannot be strictly called the ratio decidendi o....
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....as been held in those decisions that the court has to see the true nature of the receipts and not go only by the entry in the books of account. We agree with the Tribunal that these deposits are really capital receipts and not revenue receipts. In Chowringhee Sales Bureau P. Ltd. V. CIT [1973] 87 ITR 542 (SC) which was followed in Sinclair Murray and Co. P. Ltd. V. CIT [1974] 97 ITR 615, the Supreme Court observed (page 619): "It is the true nature and quality of the receipt and not the head under which it is entered in the account books that would prove decisive. If a receipt is a trading receipt, the fact that it is not so shown in the account books of the assessee would not prevent the assessing authority from treating ....
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....Bombay vs. C. Parakh & Co. (India) Ltd. 29 ITR 661 at 665 and Commissioner of Income-Tax, Madras vs. V.MR.P. Firm, Muar (1965) 56 ITR 67." 10. Thus, reading of the above judgement, we find that a subscription or admission fee normally constitutes a capital receipt and not liable to tax and also transfer of income to reserve fund in compliance with the statutory provisions constitute a charge against the profits of the income. From the very nature of Membership fee collected from members, it is clear that fees was not charged from the members for rendering any specific evidence by society. Further, there is no expressed provision in the Income Tax Act providing that such fees is taxable as revenue receipt. In the light of this dictum laid....