2009 (12) TMI 1016 - AT - Income Tax

Summary

Issues involved: Appeal filed by Revenue against CIT(A) order regarding treatment of casual membership fees as business income u/s 143(3) of IT Act for AY 2006-07.

Summary:
1. The Revenue contended that CIT(A) did not treat casual membership fees as business income.
2. Assessee company registered u/s 12A with main activity to promote Golf. AO observed casual members not eligible for privileges, treated fees as business income. CIT(A) allowed claim, considering casual members as associate members, satisfying requirements of Section 2(15) of the Act.
3. Tribunal noted club's entitlement to admit casual members as per articles of association, using golf course like permanent members. AO's decision to treat fees as business income was unfounded as club maintained required records and had been recognized as not for profit motive.
4. Promotion of sports and games considered charitable purpose u/s 2(15) of IT Act. Association promoting sports can claim exemption u/s 11, even without approval u/s 10(23) for sports associations.
5. Tribunal found AO's decision lacked merit, upheld CIT(A) order. Revenue's appeal dismissed.

*Decision:* Revenue's appeal dismissed by Tribunal on 21st December, 2009.