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TMI Blog1984 (10) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, accepted by the Commissioner (Appeals) who held that the facilities available in the club have been used exclusively by its members and that the assessee is entitled to exemption on the doctrine of mutuality. Aggrieved by the same, the department has come up in appeal. 3. The only ground taken in the appeal is that the Commissioner (Appeals) erred in holding that the income of the assessee is entitled to exemption. 4. The learned departmental representative relied upon certain provisions of the rules and bye-laws of the assessee-club to show that the amenities and privileges offered by the club were extended to outsiders as distinct from the members, that the outsiders could be charged for the facilities so extended and that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e honorary secretary. With regard to the provision mentioned last, a statement was filed by the secretary of the assessee-club that the club had not allowed any person other than a member to occupy the bedroom of the club. In the absence of any material to indicate that the statement is false, we see no reason why it should not be accepted. The Commissioner (Appeals) was, therefore. perfectly justified in accepting this statement. It has, therefore, to be taken that during the relevant period no non-member was allowed to occupy the bedroom of the club. The learned departmental representative mainly relied upon the fact that the members can introduce visitors and guests. In this connection, it is pointed out that the income of the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the room is referable to the amenity provided for the members for themselves, no income can be said to be earned, so as to be brought to tax by the provisions of the Income-tax Act".... It is, therefore, clear that if the occupation of the room or the enjoyment of any other facility is referable to the amenity provided for the members for themselves, it cannot be said that the assessee-club had transactions with non-members. 8. We are unable to accept the contention of the learned departmental representative that when the members bring in guests who enjoy the amenities of the club and when members themselves pay for the enjoyment of the amenities, the club is providing amenities to non-members and is dealing with non-members. The p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be assessable, certain items are to be deducted like bad debts and receipts from members under the club amenity fund. Similarly, the assessee had also contended that it is entitled to deduction under section 80L of the Act in respect of the interest income. The Commissioner (Appeals) did not consider these grounds as he accepted the main contention of the assessee that the income is totally exempt. The cross-objection is filed only by way of abundant caution so that the alternative claims of the assessee could be considered in case the appeal by the department is allowed. As the appeal by the department is being dismissed, the cross-objection has become infructuous and has only to be dismissed as such. 10. In the result, the appeal and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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