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2016 (1) TMI 578 - HC - Income TaxPrinciple of mutuality - whether the ITAT was right in law in treating the charges received from non-member/guests as not liable to tax? - Held that:- The conditions for invoking the principle of mutuality have been recently enumerated by the Apex Court in Bangalore Club's case (2013 (1) TMI 343 - SUPREME COURT) wherein after considering various other pronouncements of the Supreme Court and the High Court on the subject, it has been laid down that principle of mutuality relates to the notion that a person cannot make a profit from himself. The concept of mutuality has been extended to defined groups of people who contribute to a common fund, controlled by the group, for a common benefit. Any surplus amount to that needed to pursue the common purpose is said to be simply an increase of the common fund and as such neither considered income nor taxable. We find that the Tribunal had not recorded any definite finding of fact on the basis of legal enunciations on the issue. Therefore, in such a situation, the issue being considered to be primarily a question of fact relating to applicability of doctrine of mutuality, it would be appropriate to set aside the order of the Tribunal and remand the case back to the Tribunal to adjudicate the same and pass a speaking order after hearing both the sides.
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