9911796707
TMI Blog2013 (2) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the case of the assessee the income derived by letting out its premises or by allowing the guests and relatives of the members and members of affiliated clubs will not be subjected to tax – The services offered to the guests, relatives and affiliated clubs cannot be treated as trading activity and cannot be tainted with commerciality – Against the revenue. Interest on deposits and investments - Whether interest on deposits and investments will form part of the taxable income - Held that:- Interest earned by the assessee out of the bank deposits and investments made by the assessee out of out of surplus contributions made by its members, is also covered under the principles of mutuality and as such - Mutuality offers a tax exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. On the facts and in the circumstances of the case, the Ld. CIT(A) is not justified in law as well as on facts by holding that defects pointed out by the A.O. were not enough to justify rejection of accounts shown by the assessee. 3. The assessee has raised the following grounds of appeal. 1. For that the order dated 29.07.2011 as passed by the Commissioner of Income Tax (Appeals) I, Bhubaneswar hereinafter referred to as the learned CIT(A) in Appeal No.0071/10-11 partly allowing the appeal for the Assessment Year 2007-08 is not just and legal on the facts and in the circumstances of the case. 2. For that the learned CIT(A) is erred in law to conclude that interest on deposits and investments with banks and other institutions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eady been decided by the Tribunal for the previous years in case of the assessee and the Department has not challenged the orders of the Tribunal before higher forums so far which deem to have been accepted by the Department as of now. Therefore, the Department cannot say that the principles of mutuality are not applicable to the assessee. He relied in the orders of the ITAT, Cuttack Bench vide consolidated order dt.31.3.2009 in ITA Nos.90,91,93 and 94/CTK/2008 and ITA Nos.37,38,39, 40 and 41/CTK/2008 in case of the assessee for the Assessment Years 1999-00, 2000-901, 2001-02, 2002-03 and 2003-04, and vide order dt.27.5.2011 in ITA Nos.430 and 431/CTK/2010 in case of the assessee for the AYs 2004-05 and 2005-06. 7. On careful considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guests and relatives of the members and members of affiliated clubs will not be subjected to tax. The services offered to the guests, relatives and affiliated clubs cannot be treated as trading activity and cannot be tainted with commerciality. In the very said order, it was concluded by the Tribunal that the assessee is a mutual club and the various activities highlighted by the authorities below cannot be put in the category of trading activity or in the category of adventure in the nature of trade and hence are not taxable. During the course of hearing, the learned DR was not able to distinguish the facts and circumstances of the case of the present year with that year for which the Tribunal passed the order dt.29.8.2006. Therefore, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT in appellant s own case in earlier years. 9. Now coming to the appeal of the assessee, the only issue raised by the assessee is regarding the taxability of the interest on deposits and investments made by the assessee Club. 10. The contention of the learned AR of the assessee is that all the deposits and investments are made out of surplus contributions made by its members and there is no other component involved in the said amount. Therefore, those amounts being found surplus with the assessee they were deposited in the bank and made investments. Therefore, they are not taxable as per the decision of Hon ble Delhi High Court rendered in the case of Director of Income-tax (Exemptions) v. All India Oriental Bank of Commerce Welfare S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the doctrine of mutuality. Nowhere the activity of assessee was found by any of the lower authorities, as tainted by commerciality, it is also an admitted fact that the activities of assessee-club does not come within the scope of business referred to in s. 2(24)(vii). There is no reason to exclude the gain arising on the sale of shares from the principle of mutuality. Once the income is found to be covered by principle of mutuality, the same cannot be brought to tax even under the provisions of s. 115JB. Accordingly, there is no merit in the action of lower authorities for bringing the income exempt under principle of mutuality, within the purview of s. 115JB.- Canara Bank Golden Jubilee Staff Welfare Fund vs. Dy. CIT (2009) 222 CTR (Kar) ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
