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2019 (10) TMI 647 - ITAT MUMBAIDenying the claim of exemption to the assessee u/s 11 to section 13 - Whether assessee is carrying on the activity in the nature of trade, commerce or business or related activity in view of the proviso to section 2(15)? - taxability of one time membership fee - HELD THAT:- Admittedly, the entrance fee received from members i.e. onetime fee from new members and same is being recorded under corpus fund is being in the nature of capital receipt and this issue has been decided favour of assessee in the case of CIT vs. W.I.A.A. Club Ltd. [1979 (1) TMI 5 - BOMBAY HIGH COURT] held that entrance fee was a fee in the nature of return for vesting their right of membership and hence, the same would be in the nature of capital receipt not liable to tax. Similarly, the corpus donation taken towards corpus fund by the assessee and therefore eligible for the claim of exemption under section 11(1)(b) of the Act and hence, the corpus donation of ₹ 15,000/- cannot be taxed. Similarly, the entrance fee received by assessee being onetime membership fee of ₹ 5 lacs cannot be taxed. Hence, we hold that these two items are not taxable and assessee is allowable for exemption under section 11 of the Act. As we have already held in the first ground that the assessee is charitable institution and not hit by the provisions of section 2(15) of the Act i.e. the proviso, hence, we allow these grounds of assessee.
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