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2017 (9) TMI 833 - AT - Income TaxDenying exemption U/s 11 - proof of charitable activities - nature of activities - principle of mutuality violation - Held that:- The receipt from member, fees from guest of members, compensation from caterers, locker rent, sundry receipts nowhere falls in the category of trade business and commerce. Nothing came into notice that the assessee has changed its object. The object of the assessee trust has duly been described in the memorandum of association and the expenditure seems to its ancillary sports activities as mentioned in the memorandum of association which fail in the nature of general public utility ancillary to a dominant object. Assessing Officer nowhere gave his finding that the trust was providing the service to the outsider also and was involved in the activity of profit and also nowhere pointed out that the service of the restaurant, swimming pool etc. was provided to the outsider other than the member and family members and guest of the members also. Since, the principle of mutuality was not violated then in the said circumstances the case of assessee is liable for exemption u/s 11. Even a single instance is not on the file which may describe this fact that the assessee has been involved in the trade, business and commerce. It is also came into notice that the revenue allowed the claim of the assessee in the earlier years and also allowed the claim of the assessee for the A.Y. 2010-11 u/s 143(3). There is no factual change in the activity of assessee in the current year. Taking into account of all the facts and circumstances of the case, we are of the view that the claim of the assessee has wrongly declined, therefore, the finding of the CIT(A) is wrong and against law and facts and is not liable to be sustainable. - Decided in favour of assessee.
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