TMI Blog2013 (11) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Co-ordinate Bench would not qualify for exemption u/s 11 of the Act. In view of this, the decision of the ld. CIT(A), in respect of activities of the assessee not covered by the said decision of the Co-ordinate bench cannot be sustained. Therefore, the AO is directed to allow the expenses as per our directions on such activities of the assessee which are covered by the decision of the Hon'ble Co-ordinate Bench – Decided in favor of Assessee. - I.T.A. No.2250/Mum/2012, I.T.A. No.2657/Mum/2012 - - - Dated:- 13-9-2013 - Shri B. R. Mittal,(JM) And Rajendra (AM),JJ. For the Petitioner : Ms. C Tripura Sundari For the Respondent : Shri S. E. Dastur, Nitesh Joshi and A. H. Dalal ORDER Per B. R. Mittal, JM:- These cross appeals are filed by department and assessee against an order of ld. CIT(A) dated 16.23.2012. 2. Firstly we take up the appeal of department for our consideration being ITA No. I.T.A. No.2250/Mum/2012 and the grounds of appeal taken by department are as under : "1. On the facts and in the circumstances of the case, and in law, the Ld. CIT(A) erred in directing the AO to allow exemption u/s 11 of the IT Act, 1961 ignoring the fact that the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that the income made by the assessee on the activities related to provision of food, liquor and facility for playing cards and other such games qualified for deduction under provisions of section 11 of the IT Act, 1961, assuming these activities concerning a general public utility/charitable purposes." The AO stated that assessee is a club which is not open to general public. That the entry to the club is restricted to the members, their family members and guest accompanying them. That the non-members are admitted by charging coaching fees for the section of the game in which they are interested. AO stated that though development of sports is a charitable object, but in a case where dominant, substantial or main object of the club is to provide services to its members, it cannot be said to have been created for charitable purpose. He has stated that on examination of the assessee's actual activities, it shows that the dominant or rather the predominant object of the assessee is to provide service to its members. AO stated that assessee is not an association created/established for charitable purpose within the meaning of the Provisions of section 2(15) of the Act and accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO should be confirmed. 7. On the other hand, ld. AR submitted that facts in the assessment year under consideration are identical to the facts in the preceding assessment years which have been considered by Tribunal and even the appeal filed by the department against the order of ITAT was dismissed by the Hon'ble High Court vide its order dated 4.8.2011 relating to assessment year 2004-05 wherein the similar issue has raised by the department in the appeal for the assessment year under consideration. The issue raised were as under :. "(a) Whether, on the facts and circumstances of the case and in law the Tribunal was right in directing the AO to allow exemption under section 11 of the Income Tax act, 1961 ignoring the fact that the income of the assessee is earned from the activities relating to providing food, liquor and facility for playing cards and other such games which do not qualify for deduction under the provisions of section 11 of the Income Tax Act, 1961 (b) Whether, on the facts and circumstances of the case and in law, the Tribunal was right in ignoring the fact that the AO has violated the provisions of section 13 of the Income Tax Act wherein undue benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n perusal of order of Tribunal dated 28.1.2008 (supra) that Tribunal after considering the decision of Special Bench of ITAT, Mumbai in the case of Breach Candy Swimming Bath Trust, Mumbai V/s ITO (AY-1990-91) dated 31.7.2003 interalia held that business of Bar and Restaurant is property held under trust for a charitable object within the meaning of section 11(4), not affected in any way by section 11(4A) of the Act. Thus, the assessee trust is entitled to exemption u/s 11 for all its income except for income providing facilities of playing cards. We observe that the Tribunal by following its earlier orders decided the similar issue by a common order dated 6.9.2011 in ITA No.4494/Mum/2010 for assessment year 2006-07 and ITA No.5147/Mum/2010 for assessment year 2007-08. In view of above and respectfully following the earlier orders of the Tribunal, we confirm the order of ld. CIT(A) that assessee is entitled to exemption u/s 11 for its income except income providing facilities of playing cards and accordingly reject grounds of appeal taken by the department. 10. Now we take up the appeal of assessee being ITA No.2657/Mum/2012. 11. Assessee has amended the grounds of appeal. Grou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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