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2022 (8) TMI 126 - AT - Income TaxExemption u/s 11 - Exemption denied as income allegedly constitute commercial activity and therefore provisions of first proviso to clause (15) of Sec 2 r.w.s. 13 (8) becomes applicable to it - assessee argued that activities are for advancement of General Public Utility and not of trade/ commerce for profit motive - whether assessee income is exempt on principal of mutuality? - HELD THAT:- The issue raised by the assessee is fully covered by the decision of ITAT Mumbai Bench in the case of All India Rubber Industries Association [2018 (10) TMI 1172 - ITAT MUMBAI] - In this view of the matter, the above assessee association is primarily and mainly carrying out its activity for advancement of any other object of general public utility and any activity by it even if regarded as business or commerce if such activity is undertaken in the course of actual carrying out of such advancement of any other object of general public utility cannot be held as that income received from such activity constitutes commercial activity and so provision of first proviso to clause (15) of Section 2 read with Section 13 (8) are inapplicable. Accordingly the ground Nos. 1 and 2 of the assessee are allowed. Life membership fees/ corpus donation which are in the nature of capital receipt and not chargeable to tax - HELD THAT:- The issue in question is already mentioned in the Rules and Regulation of the Society which indicates that the fees like entrance fees as well as life membership are part of the corpus fund and accordingly are in the nature of capital receipt. As such, there is no relevance by the ld. CIT(A) to restore the same to the AO for verification. Keeping in view the rules and regulation of the society as well as submission of the ld. AR of the assessee, we do not concur with the findings of the ld. CIT(A) to restore the issue to the AO. Thus Ground No. 3 of the assessee is allowed. Disallowance towards late deposit of PF, prior period expenses and disallowance of donation u/s 80G are only academic in nature and does not fall under the law while computing the income u/s 11
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