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TMI Blog2013 (12) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... ven for activities cannot be taxed, ignoring the facts brought on record to establish that the assessee was engaged in business activities and no principle of mutuality is applicable to the assessee. 2. On the facts and in the circumstances of the case, and in law, the learned Commissioner of Income-tax (Appeals), Mumbai, erred in holding that the provisions of sections 11 to 13 of the Income-tax Act, 1961 are applicable to the assessee as it was holding that registration under section 12A of the Act, without appreciating that no such claim was made in the return or during the assessment proceedings. 3. On the facts and in the circumstances of the case, and in law, the learned Commissioner of Income-tax (Appeals), Mumbai, erred in deleting the addition of Rs. 6,57,004 made on account of discrepancy in receipts of membership/entrance fees merely on the decision of applicability of principle of mutuality in the assessee's case. 4. On the facts and in the circumstance of the case and in law, the learned Commissioner of Income-tax (Appeals), Mumbai, erred in holding that the liability to the extent of Rs. 74,509 was ascertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... club has the banquet and ground which is available only to the members for holding their family functions. Apart from collecting nominal amount towards the maintenance of the premises, the collection by way of royalty on catering and decoration is done from the concerned contractor. This facility is effected for the benefit to be given to the members of the place available in the club complex. To substantiate its claim, the assessee filed copies of ledger account. The Assessing Officer further sought clarification from the assessee to substantiate that the benefits of all such activities have been taken by the members of the club only. The assessee filed a detailed reply in furtherance of its reply dated December 22, 2009 and explained the modus operandi of the mutuality for the benefits of the members. The assessee also filed subsequent copies of news bulletin published by the club for circulation amongst the members of the club only. It was explained that the members/his family members including children participating in club activities which are handled by professionals wherein the club is entitled to have royalty at the rate of 20 per cent. for allowing the professionals to use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer in the earlier years never questioned the applicability of the principles of mutuality. It is only due to the initiation of the proceedings by the Bombay Municipal Corporation for the levy of higher rent and eviction notice, the Assessing Officer formed an opinion that claim of exemption of income on the principles of mutuality needs to be rejected. The learned Commissioner of Income-tax (Appeals) also relied upon the findings of the hon'ble Supreme Court in the cases of CIT v. Bankipur Club Ltd. [1997] 226 ITR 97 (SC), Chelmsford Club v. CIT [2000] 243 ITR 89 (SC) and also relied upon the decision of the Mumbai Tribunal in the case of Chembur Gymkhana in I. T. A. No. 3899/Mum/2006 and concluded that facts and circumstances in the case of Chembur Gymkhana are similar to that of the assessee and held that principles of mutuality is fully applicable to the club and accordingly the action of the Assessing Officer was rejected. 5. Aggrieved by this findings of the learned Commissioner of Income-tax (Appeals), the Revenue is in appeal before us. 6. Before us, the learned Departmental representative strongly relied upon the findings of the Assessing Officer. 7. Learned couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Income-tax (Appeals) has rightly held that on the facts of the case the principles of mutuality is fully applicable to the club. We do not find any reason to tamper with the findings of the learned Commissioner of Income-tax (Appeals). Accordingly, ground No. 1 is dismissed. 11. Ground No. 2 relates to the grievance that the learned Commissioner of Income-tax (Appeals) erred in holding that the provisions of sections 11 to 13 of the Act are applicable to the assessee. 12. The issue has been discussed by the learned Commissioner of Incometax (Appeals) at para 4.1 on page 16 wherein the learned Commissioner of Income-tax (Appeals) held as under : "Without prejudice to the above ground, the second ground raised by the appellant is that the Assessing Officer has not allowed exemption under sections 11 to 13 of the Act when the appellant was holding the registration under section 12A of the Act and when the same was not withdrawn and none of the condition of the issue of the said certificate was violated. This ground is not discussed at all in the order. In view of my observations in g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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