2012 (6) TMI 834 - AT - Income Tax

Summary

Issues involved: Appeal against order u/s 250(6) of the Income-tax Act,1961 regarding the nature of the assessee club and the applicability of mutual concern principle.

Nature of the assessee club:
The revenue contended that the club did not fulfill the principle of mutuality as per the decision in the case of Chelmsford Club V CIT 253 ITR 89. However, the CIT(A) allowed relief to the assessee based on the decision of the Hon'ble ITAT Chandigarh in the assessee's own case. The CIT(A) deleted the addition of Rs. 30,58,400, following the decision of the Tribunal in the case of Gymkhana Club, Sector 6, Panchkula. The Tribunal found that the issue was already decided in favor of the assessee in earlier years and maintained consistency by dismissing the Department's appeals. The Tribunal noted that the issue was squarely covered by its previous decision in the assessee's own case, which was not disputed by the Department.

Applicability of mutual concern principle:
The revenue raised concerns about the club's mutual concern status, arguing that the financial and administrative control over the club was in the hands of HUDA, and the society failed to meet the fundamental prerequisite of identity of all mutual concerns. The CIT(A) erred in allowing relief to the assessee based on the decision of the Hon'ble ITAT Chandigarh in the assessee's own case from an earlier year. The Tribunal, however, upheld the CIT(A)'s decision, citing consistency with its previous rulings in the assessee's case and dismissing the revenue's appeal.

Conclusion:
The Tribunal dismissed the revenue's appeal, following its previous decisions in the assessee's case and maintaining consistency in its rulings. The order dated 29.01.2008 passed by the Tribunal in a related case was enclosed for reference. The appeal of the revenue was ultimately dismissed, upholding the decision of the CIT(A) regarding the nature of the assessee club and the application of the mutual concern principle.