TMI Blog1962 (9) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... ot for any outsiders. The amenities provided by the club are for the benefit and convenience of the members exclusively. The members of the club are of two categories: (1) those who reside in the club in the furnished rooms and (2) those who enjoy the club amenities as outsiders. The members have to pay mensem subscription and also have to make extra payment for meals and use of residential furnished rooms. It is common ground that the rent received by the assessee for rooms let out by it to its members was ₹ 10,062. When the assessment for the year 1955-56 came to be made, the Income-tax Officer treated this amount of rent realised by the assessee from the members as income from property assessable under section 9 of the Indian Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the item of ₹ 4,800 but he held that the rent realised by the assessee was not exempt on the principle of mutuality. In his opinion, the rent realisations were liable to be assessed under section 9 of the Income-tax Act. A copy of the order passed by the Appellate Assistant Commissioner is part of the case and is annexure B . 5. Feeling aggrieved by the order passed by the Appellate Assistant Commissioner, the assessee came in second appeal before the Appellate Tribunal and raised the same contention as were raised before the Appellate Assistant Commissioner. It was also urged that the principle of mutuality would apply to income liable to be assessed not only under section 10 but also under section 9. The Tribunal for reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the head 'profits and gains of business, profession or vocation' or would apply also to receipts assessable under the head 'income from property' under section 9 of the Indian Income-tax Act? 7. The statement of the case was placed before the parties. The parties admit that all material facts have been clearly stated in the statement of the case. The assessee made minor suggestions some of which have been accepted. The Commissioner of Income-tax suggested modification of question No. 1. The facts enumerated in the statement of the case do not warrant any modification or the question framed by the Tribunal. The statement is finalised. R. L. Gulati, for the Commissioner. J. Sarup, for the assessee. JUDGM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessable to income-tax under section 9 of the Act in the past and in the assessment year 1955-56 also the Income- tax Officer treating ₹ 10,062 as income from property assessed it, after making certain deductions, to income-tax under section 9. This time the assessee filed an appeal from the assessment order contending that the income was not assessable on account of the principle of mutuality. It was contended that the members were the contributors (by paying the rent for the quarters occupied by them) and that the members were the participants (by receiving the rent) and that because there was an identity between the participants and the contributors there was no question of assessing tax. The argument was that no tax can be assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is settled that the various heads of income mentioned in section 6 of the Act are mutually exclusive (see United Commercial Bank Ltd. v. Commissioner of Income-tax [1957] 32 I.T.R. 688; [1958] S.C.R. 79) and that if an income comes under one head it cannot come under any other head. If the income in dispute is income from property it cannot be income also from business. It cannot be doubted that the income in this case is income from property. The assessee owns the quarters which it hires to its members and derives the income in the form of rent from them. Every person who owns a house or a building is liable to pay income-tax on the annual letting value of it whether he occupies it himself or lets it out to a tenant or lets it remain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne and the same person. On the other hand the fact that under the law an owner is liable to pay income-tax on the annual letting value even if he himself occupies the house shows that the principle of mutuality does not apply in a case governed by section 9. Naturally, when the basis for assessing tax on income from property is the mere ownership of the property and not the actual realisation of income, the question whether the payer and the recipient are one and the same person cannot arise. It is only when what is assessed is income from business that the principle of mutuality may be applicable; where the basis for assessment is the earning of income, the question may arise whether the recipient of the income and the payer are not one an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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