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TMI Blog2016 (12) TMI 1718X X X X Extracts X X X X X X X X Extracts X X X X ..... y building or lands appurtenant thereto of which the Assessee is the owner. Since the right to display advertisement in the premises of the Assessee alone was given, the income in question has to be regarded only as income under the head “Income from other sources”. The AO is directed to tax the income in question accordingly and allow deductions permissible while computing deduction under the head “Income from other sources”. The ground of appeal of the Revenue is accordingly partly allowed. Rent from M/s.Reliance Industries Ltd., who was its member - income in question was claimed to be not taxable in the light of the principle of mutuality - Held that:- Principle of mutuality will not apply in the circumstances of the case as explaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd direct accordingly. - I.T.A Nos.1340/Kol/2012 & 339/Kol/2013 - - - Dated:- 2-12-2016 - Hon ble Shri P.M.Jagtap, AM Sri N.V.Vasudevan, JM For the Appellant : Shri Vijayendra Kumar, JCIT For the Respondent : Shri J.P.Khaitan, Advocate Shri P.Jhunjhunwala,Advocate ORDER Per N.V.Vasudevan, JM ITA 1340/Kol/12 is an appeal by the Revenue against the order dated 11.6.2012 of CIT(A)-VIII, Kolkata, relating to AY 2008-09. 2. The grounds of appeal raised by the Revenue reads as follows: 1. 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 ₹ 2,83,332/-. 2. That on the facts and ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see had allowed one M/S.Tapan Art Centre to put advertisement board in and around tennis court. The Assessee received a sum of ₹ 2,83,332/- from M/s.Tapan Art Centre for allowing them to display their advertisement in the club premises. The AO held that the aforesaid sum was chargeable to tax under the head income from Business . On appeal by the Assessee, the CIT(A) held that the said sum was not taxable by applying the principle of mutuality. The principle of mutuality is based on the concept that no one can make profit out of himself and, therefore, the identification of the commonness of the contributors and participators is the media by which the mutuality concept is regarded as applicable or inapplicable depending upon the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stomers, the identity of participants and contributors is sapped. Thus the interest earned on fixed deposits is to be brought to tax. 6. In the light of the law as laid down by the Hon ble Supreme Court, we are of the view that the order of the CIT(A) on this issue is unsustainable and the income in question is chargeable to tax. Even the person displaying advertisement board is a member still the principle of mutuality will not apply as he displays the advertisement board in his capacity not as member but individual capacity for the purpose of his business. The learned counsel for the Assessee however submitted that the club cannot be said to be engaged in any systematic and continuous activity in the nature of business and therefore th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utuality. The AO however rejected the plea of the Assessee and taxed the income in question under the head Income from House Property . The CIT(A) held that the income in question is not taxable applying the principle of mutuality. 9. 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 House Property . Gr.No.2 raised by the revenue is allowed. 10. As far as Gr.No.3 is concerned, the same relates to interest on Fixed Deposit with Bank who also happens to be a member of the club. The income in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which the element of mutuality is wanting in view of the Hon'ble Supreme Court's decision in the case of Bangalore Club - Vs.- Commissioner of Income Tax [2013] 29 taxman.com 29(SC). 2. That, on the facts and in circumstances of the case and in law, the Ld. CIT(A) erred in holding that the amount earned from advertisement and sponsorship was not liable to tax due to principle-of mutuality; whereas, such activities were in the nature of tradelbusiness/transaction and not qualified to be covered by the principle of mutuality as has been held by the Supreme Court and, therefore, such wrong presumption of law by the Ld. CIT(A) is unsustainable and liable to be quashed. 3. That, on the facts and in circumstances of the case and i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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