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TMI Blog2015 (5) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... admitting these appeals, framed the following common substantial question of law; "Whether on the facts and in the circumstances of the case the Tribunal was justified in law in upholding the action of the Assessing Officer of taxing 'card guest income' and 'general guest fee' which are charges paid by the members of the assessee?" 4. Mr. R.K. Patel, learned Advocate for the appellant-assessee, has submitted that the Tribunal materially erred in passing the impugned order inasmuch as it failed to appreciate the 'Principle of Mutuality' in its proper perspective. Mr. Patel, further, submitted that the Tribunal also wrongly misinterpreted the term 'Guest' in the context of Clause (2) of the Constitution of the appellant-asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied on by the assessee as well as the authorities below, we are of the view that the principles of mutuality applies so far the amount received from the members. But, any amount received from non-members by a mutual concern can be brought to the tax-net of income-tax and there is no escape from it on the guise of mutuality. In the case of CIT Vs. Royal Western Indian Turf Club Ltd., [24 ITR 55(SC)]. Hon'ble Court has held that the principle of mutuality does not prevent a mutual association from doing business with the some of its members because, in that case, the association must be deemed to be doing business not with itself but with others who are different entities and there, the income earned shall bear tax. This principle has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat there must be a complete identity between the contributors and the participators. However, in the very judgment, the Apex Court spelt out that caution to be exercised while looking to the mutuality or the commercial activity and it is a difficult question of fact. In this case, facts, which is to be seen from factual matrix, shows that neither the ITAT nor CIT come to the conclusion as to who contributed to the funds as non-members. Just because the nonmembers are brought to the club, it would not come out of the mutuality aspect. The decision of this Court in "SPORTS CLUB OF GUJARAT LTD. Vs. CIT", 171 ITR 504, 512 (Guj.), which is sought to be relied upon by the authorities below and Mr. Desai, this Court held that the assessee's incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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