9911796707
TMI Blog2016 (12) TMI 1718X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the: A. O. under the head of rental income amounting to Rs. 2,83,332/-. 2. That on the facts and circumstances of the case and in law, the Ld. CITCA) erred in deleting the addition made by the A. O. under the head of rental income amounting to Rs. 78,49,798/-. 3. That on the facts and circumstances of the case and in law, the Ld. CITCA) erred indeleting the addition made by A. O. under the head of interest income amounting to Rs. 4l ,61 ,798/- in relation to assessment year 2008-09. 4. That the appellant reserves the right to amend, alter or add to any ground(s) of appeal before or at the time of hearing of the appeal." 3. The Assessee is a company which was incorporated as a company limited by Guarantee under the Indian Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tuality concept is regarded as applicable or inapplicable depending upon the facts and circumstances of each case. The law in this regard is essentially the result of judicial pronouncements, there being nothing explicitly provided in the statute in this regard. 5. The law in this regard has been recently laid down by the Hon'ble Supreme Court in the case of Bangalore Club v/s. CIT 350 ITR 509 (SC), where the question for determination before the Hon'ble Supreme Court was as to whether or not the interest earned by the assessee on the surplus funds invested in fixed deposits with the corporate member banks is exempt from levy of Income Tax, based on the doctrine of mutuality? The Hon'ble Supreme Court answered the aforesaid question in fav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... systematic and continuous activity in the nature of business and therefore the income in question has to be regarded as income under the head 'Income from house property" or "Income from other sources" and appropriate deductions under the aforesaid head of income has to be allowed and only the net income has to be brought to tax. 7. We are of the view that the plea of the learned counsel for the Assessee is acceptable and the income in question cannot be regarded as income from business. The income in question cannot be regarded as "income from house property" also because M/S.Tapan Art Centre was merely allowed to display advertisement board in and around the tennis court. U/s.22 of the Act what is chargeable to tax under the head "Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank who also happens to be a member of the club. The income in question was claimed to be not taxable in the light of the principle of mutuality. The AO however rejected the plea of the Assessee and taxed the income in question under the head "Income from other sources". The CIT(A) held that the income in question is not taxable applying the principle of mutuality. 11. We have already held that principle of mutuality will not apply in the circumstances of the case as explained by the Hon'ble Supreme Court in the case of Bangalore Club (supra). In view of the said decision, we are of the view that the income in question is taxable and under the head "Income from other sources". The AO is directed to tax the income in question accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, on the facts and in circumstances of the case and in law, the Ld. CIT(A) erred in wrong presumption of law that, interest income earned by the assessee company from the member banks as exempt from tax under the doctrine of mutuality; whereas, the Hon'ble Supreme Court has herd that such income does 'not fall within the ambit of mutuality principle and eligible to income-tax in the hands of the assessee-club in its judgement in the case of Bangalore Club- Vs.- Commissioner of Income Tax[2013] 29 taxman.com 29 (SC). 4. That the appellant reserves the right to amend, alter or add to any ground of appeal before or at the time of hearing of the appeal." 15. Ground No.1 raised by the Revenue is identical to Ground No.1 raised by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
