9911796707
TMI Blog2023 (3) TMI 1506X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, in the instant case we find that the AO while passing the draft assessment order applied similar test to determine mutuality and came to the conclusion that membership dues are business receipts of the assessee. The DRP without ado upheld the same. We find that the directions of DRP in assessee s India branch is for anterior AY 2014-15 and are subsequent in time i.e. dated 22/09/2017, whereas, in assessee s case for AY 2012-13, the directions are dated 17/11/2015. Taking into consideration entire facts, we deem it appropriate to restore this issue to the file of AO for denovo examination in the light of aforementioned DRP directions in the case of assessee s India branch with respect to collection of membership fee only. In addition, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appeal in furtherance of its claim that the aforesaid revenues, viz. (i). membership fees; (ii). fees for IATA Clearing House Facility (ICH facility); and (iii). BSP Link charges were not taxable in India, therefore, to the said extent the order passed by it while disposing off the assessee s appeal in ITA No. 587/Mum/2016, dated 08.01.2021 suffers from a mistake which being apparent from record renders the order amenable for rectification under sub-section (2) of Sec. 254 of the Act. We, thus, in the totality of the aforesaid facts recall the order passed by the Tribunal in ITA No. 587/Mum/2016, dated 08.01.2021 for the limited purpose of afresh adjudication of the Ground of appeal No. 6‟ wherein the assessee had claimed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee/appellant was incorporated under the Special Act of the Parliament of Canada. Thus, the assessee is a tax resident of Canada. The assessee is a non-profit organization with the main object to promote safe, regular and economical air transport for benefit of people of the world. The assessee has three types of members around the globe,viz: (i) Airlines (ii) Strategic Members (iii) Airline Travel Agents. The assessee charges membership fee from its members. The assessee has branch office in India. The India Branch office inter alia collects membership fee and transmits the same to assessee in Canada. In other words, the payments are directly received by the assessee in its Head Office at Canada. The branch office in India merely facil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fee collected by the assessee is not taxable under the provisions of the Act. 6. We find that in Assessment Year 2014-15 in assessee s India branch the applicability of principle of mutuality was considered by the DRP. The DRP tested the applicability of principle of mutuality in assessee s case on the following three conditions: Condition 1: There must be complete identity between the contributors and participators; Condition 2: The organization must be set up for achieving a common objective of the members and the contribution received from the members must be for such common purpose; and Condition 3: There should be no scope of profiteering by the contributors and no element of commerciality. The DRP after examining the facts of case, co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e only. In addition, the Assessing Officer shall also examine if the transaction (i.e. of membership fee) in the case of assessee is similar to that of Indian Branch in AY 2014-15; one to one nexus is established between collection of membership fee by the India Branch and transmission of same to the assessee; and the transaction is without any commercial element. If all the conditions are satisfied, no addition is warranted. The ground No. 6(c) is allowed for statistical purpose. 8. Since, no arguments were advanced on the other two sub-grounds of ground No.6, the same are dismissed. 9. In the result, appeal by the assessee is allowed for statistical purpose. Order pronounced in the open court on Thursday the 09th day of March, 2023. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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