The Tax Publishers2021 TaxPub(DT) 0213 (Mum-Trib)

INCOME TAX ACT, 1961

Section 250(6)

Where assessee had submitted certain details in support of its claim and these have not been discussed in the orders of the authorities and AO wondered as to how assessee had not explained them and how on similar reasoning assessee has not treated the Gym charges and rents received from Tata Power as exempt, further, observation of CIT(A) was germane that it was not brought on record as to how other members can also take the said premises on rent when the same is let out throughout to the same party, therefore, matter was remanded back to CIT(A) to decide afresh.

Appeal [CIT(A)] - Transaction of leasing out two premises to its two members - Concept of mutuality denied -

Assessee had received rent from M/s. S and M/s. T which was not offered to tax. However, on similar facts, an amount received for Gym Charges and rent from M/s. T was offered to tax. Assessee claimed that these were the contribution of the members, which cannot be treated as income chargeable to tax. AO held that payments received from same entity was not offered to tax in one instance and claimed as not taxable in another instance which cannot be allowed. AO observed that the leasing out of two premises to two members preclude the other member from enjoying the privilege given to them by assessee and that there was no qualification of lease to restrict this privilege allowing by way of rotation or lottery or any other means by which all the members of the assessee getting equal opportunity for enjoying this privilege. CIT(A) upheld the order of AO. Held: Assessee had submitted certain details in support of its claim. These have not been discussed in the orders of the authorities. CIT(A) had raised certain queries in his appellate order. He submitted certain materials including the rental agreements, copies of bylaws, a sketch of the rented portion and certain case laws also. AO wondered as to how assessee had not explained how on similar reasoning assessee has not treated the gym charges and rents received from Tata Power as exempt. No explanation in this regard is on record. Observation of CIT(A) was germane that it was not brought on record as to how other members can also take the said premises on rent when the same is let out throughout to the same party. Therefore, matter was remanded back to CIT(A) to decide afresh.

REFERRED :

FAVOUR : Matter remanded

A.Y. : 2014-15



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