9911796707
TMI Blog2014 (5) TMI 1115X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in holding that receipt of Rs. 28,70,211/- received by the assessee from Mahalaxmi Hospitality, Mahalaxmi Hotel & Resort and Mahalaxmi Food Link for Purposes of playing cards and also having Permit Room Bar and Restaurant for catering and soft drinks and hiring income from Marriage Hall/ground as exempt under principal of mutuality. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) Mumbai erred in holding that receipt of Rs. 28,70,211/- received by the assessee from Mahalaxmi Hospitality, Mahalaxmi Hotel & Resort and Mahalaxmi Food Link for Purposes of playing cards and also having Permit Room Bar and Restaurant for catering and soft drinks and hiring income from Marriage Hall/ground as exempt u/s 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was further submitted before the AO that the assessee trust was not involved in any activities in the nature of trade, commerce or business or any services in relation to any trade, commerce or business. The AO, however, was not satisfied with the explanation given by the assessee trust in this regard. He observed that as per income and expenditure accounts, activities of the assessee trust were different from the objects of the trust. The benefits of the trust were not available for all the persons of the society but to the limited persons i.e. members of the club house only. The club had been providing facilities of playing cards and was also having permit room bar & restaurant for catering and soft drinks and was also having income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee and taxed it accordingly. Aggrieved against the order of the AO, the assessee filed appeal before the ld. CIT(A). The ld. CIT(A) observed that the assessee trust had been conferred the benefit of exemption under section 11 up to assessment year 2008-09. The sports and other activities carried out by the assessee trust partake the character of general public utility which term is included in the definition of charitable purpose as defined under section 2(15) of the Act. For the current financial year, there was no change of facts and circumstances which may lead to change of status of the assessee trust. He therefore held that the assessee trust was eligible for exemption under section 11 of the Act. He also held that the assessee trust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded to the members, which cannot be said to constitute any charitable activity. Services can be availed for consideration only by members who constitute high class, influential and rich persons that too on payment of high premium for getting membership of the club. Though the assessee club is also offering the facility of sports to its members that itself, cannot partake the character of charitable activity. It is not the case of the assessee trust that such sports activities are provided or have resulted into any benefit to the public at large or any section of the society. The sports activities accompanied by facilities like liquor bar, playing cards, restaurant, marriage hall, catering services etc. limited to a certain group of persons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd are not open to general public. However, he has observed that the assessee has earned some income from non members also. He has also observed that the assessee has earned royalty income from restaurant, decorators and halls, swimming-pools, club house, collection of room rent etc. We may point out that if the services of restaurant, bar room, swimming-pool etc. are restricted to members or their family members or guests only, then the income from those services cannot be said to be business income of the society and the benefit of mutuality will be available to the assessee in relation to such facilities/services. However, the income which has been earned by the assessee by providing facilities to non members is required to be treated as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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