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TMI Blog2013 (2) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and in the circumstances of the case, the Ld. CIT(A) is not justified in law as well as on facts by allowing exemption to the assessee on the ground of mutuality. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) is not justified in law as well as on facts by holding that the concept of member will include guests and relatives of the members and members of the affiliated clubs. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) is not justified in law as well as on facts by holding that defects pointed out by the A.O. were not enough to justify rejection of accounts shown by the assessee." 3. The assessee has raised the following grounds of appeal. "1. For that the order dated 29.07.2011 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mently argued assailing the CIT(A)'s order so far as it relates to the principles of mutuality and the finding of the learned CIT(A) that the defects in the accounts of the assessee pointed out by the Assessing Officer were not enough to justify rejection of accounts shown by the assessee. 6. Contrary to this, the learned AR of the assessee has submitted that the issue relating to mutuality has already been decided by the Tribunal for the previous years in case of the assessee and the Department has not challenged the orders of the Tribunal before higher forums so far which deem to have been accepted by the Department as of now. Therefore, the Department cannot say that the principles of mutuality are not applicable to the assessee. He re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the decision of the ITAT, Cuttack Bench dt.29.8.2006 in ITA No.125,117/CTK/2000 for the Assessment Year 1997-98, wherein it was observed by the Tribunal that the concept of "member" is spacious enough to include guests and relatives of the members and members of affiliated clubs and if it is so, then in the case of the assessee the income derived by letting out its premises or by allowing the guests and relatives of the members and members of affiliated clubs will not be subjected to tax. The services offered to the guests, relatives and affiliated clubs cannot be treated as trading activity and cannot be tainted with commerciality. In the very said order, it was concluded by the Tribunal that the assessee is a mutual club and the vario ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As already stated the AC has passed identical order for the assessment year under appeal as were passed for AYs 2004-05 & 2005-06. The orders for the earlier assessment years were decided by me vide my order dt.29.9.2010 in ITA Nos.0482 & 0483/08-09. Since there is no change in the attendant facts, I have to necessarily follow my earlier appellate order which were based on the orders of the ITAT in appellant's own case in earlier years." 9. Now coming to the appeal of the assessee, the only issue raised by the assessee is regarding the taxability of the interest on deposits and investments made by the assessee Club. 10. The contention of the learned AR of the assessee is that all the deposits and investments are made out of surplus contri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nner as may be determined by them from time to time. Under this clause, the investment need not be confined to investment by way of deposits with banks. It can take any other form or shape such as investment in shares, Government securities, etc., and where any income is derived from such investment whether by way of interest, dividend or capital gain, the same cannot be said to be outside the doctrine of mutuality. Nowhere the activity of assessee was found by any of the lower authorities, as tainted by commerciality, it is also an admitted fact that the activities of assessee-club does not come within the scope of business referred to in s. 2(24)(vii). There is no reason to exclude the gain arising on the sale of shares from the principle ..... X X X X Extracts X X X X X X X X Extracts X X X X
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