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TMI Blog2013 (7) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... pect and allow the deduction to the assessee in accordance with law. With regard to the addition made towards common good fund - Held that:- As it is found from the assessment order that the assessee introduced in the liability side of the balance sheet an amount of Rs. 21,21,488/- and Rs. 18,22,720/- as a common good fund and during the assessment years 2000-01 and 2003-04 respectively assessee has not produced any details for the said amounts said to have been received from its members and the assessee has not filed any details correlating the amounts with the names of the members etc., from whom the said fund was received by the assessee, except furnishing xerox copy of a ledger account. Since the assessee association is a District Bus Operators Association is formed for the benefit of the members of the association, in the interest of justice, the assessee be given one more opportunity to furnish the details of common good fund before AO. Disllowance of diesel expenses - Held that:- As assessee did not furnish complete details thus AO's order in estimating the disallowance of these expenses at 10% which is quite reasonable in the absence of complete details - appeals of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is restricted to the persons operating buses in the region of Trichy District and persons or association of persons engaged with any other trade or industries wholly or partly catering the needs of bus transport industry. The counsel for the assessee, referring to page 3 of the assessment order for the assessment year 2000-01, submits that the Assessing Officer admits that the objects of the assessee are inconsonance with the concept of mutuality. But, the Assessing Officer denied the status of mutuality holding that because the assessee made donations to third parties, incurred expenses and earned interest income from banks, the assessee is not a mutual concern. The Assessing Officer was of the view that the assessee received income from third parties and third parties were benefitted by the payments made by the assessee towards donation and expenses incurred and therefore, the assessee is not a mutual concern. As far as the interest is concerned, the counsel for the assessee fairly conceded that the issue is decided against the assessee by the Hon'ble Supreme Court in the case of Bangalore Club Vs. CIT (350 ITR 509). In respect of the expenses, the counsel submits that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee as Association of Persons and rightly made the additions/disallowances. 5. Heard both sides. Perused the orders of lower authorities. The assessee society is registered under the Society's Registration Act, 1860 with the following objects:- "i) To promote solidarity and co-operation among the members with a view to focusing their collective thinking and perspective of the road transport industry. ii) To promote health practices and technical competency among its members and protect their interests and rights and also try to find solutions to their problems. iii) To co-operate with the government and other bodies for the purpose of developing the industry in the interest of the public. iv) To promote its friendship in understanding among the members and with a public and to organize cultural programs, study tours and such of the projects for the benefit and welfare of the members and the public. v) To do all such things in the interest of the members as are incidental or conducive to the attainment of the above object." 6. As could be seen from the above, these objects are inconsonance with the concept of mutuality. However, the lower authorities did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsal Charity 273 EC Charitable Trust Vs. Director of Income Tax (Exemptions) (23 ITR (Trib) 25), wherein it was held as under:- "The legal character of the organization of the Club of Masons was that of mutual concern. The status as a separate identity, quite different from association of persons, was based on the principle of mutuality. If this mother body itself carried out any charitable activities, even though the activities were laudable, there would be a clash between the legal character of the mother entity and the charitable activity. When the Club of Masons itself carried out charitable activities, that defeated the principle of mutuality and the mother body would be treated as an association of persons. The mother body could sacrifice its status of a mutual concern and go for obtaining registration under section 12AA as a charitable institution. If it was converted into a charitable trust, it was doubtful whether it would get exemption under section 11 for the reason that the object of the mother entity was mainly to serve its members. Because of the inherent clashes and different status designed in law, it was not possible to grant exemption without disturbing the stat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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