2016 (5) TMI 1576 - AT - Income Tax

Benefit of doctrine of mutuality - receipts from guest fees, income from hire of rooms, hire charges in respect of club lawn is to be considered exempt by following principal of mutuality - HELD THAT - We find that the ld.CIT(A), following the Tribunal s order in assessee s own case in earlier years 2013 (1) TMI 1031 - ITAT AHMEDABAD and 1987 (10) TMI 21 - GUJARAT HIGH COURT held that the assessee was entitled for the benefit on the basis of doctrine of mutuality. Revenue has not brought any contrary binding decision in its support nor has placed any material on record to demonstrate that the decisions of the Tribunal in assessee s own case for AY 200-07 has been set aside by Hon ble Jurisdictional High Court 1987 (10) TMI 21 - GUJARAT HIGH COURT . - no reason to interfere with the order of the ld.CIT(A) and thus the ground of Revenue is dismissed.

Summary

Issues:
1. Treatment of income received by the assessee from outsiders/non-members in respect of guest fees, hire charges, and income from rooms under the principle of mutuality for AY 2008-09.
2. Similar treatment of income for AY 2009-10 based on the decision for AY 2008-09.

Analysis:

Issue 1: Treatment of Income for AY 2008-09
The case involved the assessment of income received by the assessee from guest fees, hire charges, and income from rooms. The AO considered the total sum of Rs. 85,05,005 as taxable income despite the assessee's argument based on the principle of mutuality. The CIT(A) decided in favor of the assessee, citing previous ITAT orders supporting the doctrine of mutuality. The Revenue appealed, arguing that the income should be taxable based on the Gujarat High Court judgment in a similar case. However, the ITAT upheld the CIT(A)'s decision, emphasizing the doctrine of mutuality and the consistency of decisions in the assessee's favor in previous years.

Issue 2: Similar Treatment for AY 2009-10
For AY 2009-10, the facts and circumstances were found to be identical to AY 2008-09. Since the decision for AY 2008-09 favored the assessee based on the principle of mutuality, the ITAT dismissed the Revenue's appeal for AY 2009-10 as well.

Cross Objections:
The assessee filed cross-objections, but during the proceedings, the assessee's representative chose not to press them. Consequently, the cross-objections were dismissed.

In conclusion, the ITAT, Ahmedabad, upheld the principle of mutuality in determining the taxability of income received by the assessee from non-members for AY 2008-09 and AY 2009-10. The Revenue's appeals were dismissed, and the assessee's cross-objections were also dismissed as not pressed.

This detailed analysis outlines the key issues, arguments, and decisions made by the ITAT Ahmedabad in the judgment concerning the treatment of income under the principle of mutuality for the specified assessment years.