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2016 (12) TMI 1718 - AT - Income TaxNature of income - rental income - income under the head ‘Income from house property” or “Income from other sources” - Assessee received sum from M/s.Tapan Art Centre for allowing them to display their advertisement in the club premises of assessee - Held that:- The income in question cannot be regarded as income from business. The income in question cannot be regarded as “income from house property” also because M/S.Tapan Art Centre was merely allowed to display advertisement board in and around the tennis court. U/s.22 what is chargeable to tax under the head “Income from House Property” is annual value of property consisting of any 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 explained by the Hon’ble Supreme Court in the case of Bangalore Club (2013 (1) TMI 343 - SUPREME COURT). 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” Interest on Fixed Deposit with Bank who also happens to be a member of the club - income in question was claimed to be not taxable in the light of the principle of mutuality - AO rejected the plea of the Assessee and taxed the income in question under the head “Income from other sources” - Held that:- As 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 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”. Gr.No.3 raised by the revenue is allowed. Sum received from various sponsors for various events that the club organizes on festivals and other occasions - Held that:- The sum in question is taxable. However, as rightly submitted by the learned counsel for the Assessee, the sum in question has to be taxed under the head “income from other sources” and the Assessee should be allowed all expenses permissible as deduction while computing income under the said head of income. We hold and direct accordingly.
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