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2015 (4) TMI 472 - ITAT MUMBAI

2015 (4) TMI 472 - ITAT MUMBAI - [2015] 40 ITR (Trib) 455 (ITAT [Mum]) - Taxability of contributed to the conducting of events by way of sponsorship - principles of mutuality - no intention to earn income - contributing companies are nonmembers - Held that:- assessee has been organizing various events for the mutual benefit of its members. The contributions, if any, received from the members were utilized for conducting the events and the surplus, if any, is accepted as exempt under the principl .....

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ted to tax as income in the hands of the assessee.

It is an accepted fact that the complimentary liquor has been sold at a price, meaning thereby the intention of the assessee was to make profit out of sale of complimentary liquors. Thus the action of the assessee was commercial in nature. It was not shown to that the liquor companies, who have given complimentary liquors, are members of the assessee. Hence, we do not find any infirmity in the decision of the ld.CIT(A) on this issues. .....

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JJ. For the Appellant : Shri Vivek Batra For the Respondent : Shri Farrokh Irani ORDER Per: B R Baskaran: These cross appeals are directed against the order dated 30-08- 2010 passed by ld CIT(A)-I, Mumbai and they relate to the assessment year 2007-08. 2. The assessee is aggrieved by the decision of Ld CIT(A) on the following issues:- (a) Addition of ₹ 1,25,000/- relating to Sponsorship contributions (b) Addition of ₹ 11,87,657/- relating to complimentary liquors received. 3. The rev .....

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; 1,25,000/- relating to the amounts received by way of sponsorship for various events organized by the assessee. The AO noticed that the following companies have contributed to certain events organized by the assessee. Diego India P Ltd (Barnite event) Rs.35,000/- McDowell Ltd (Jazznite event) Rs.40,000/- Centurion Bank Ltd (Holi event) Rs.50,000/-. Since the contributors were non-members, the AO took the view that the above said contributions are assessable as the income of the assessee. Accor .....

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be allowed as deduction, if the above said receipts were considered to the income of the assessee. However, the Ld D.R submitted that the assessee has received this amount from non-members and hence the concept of mutuality will not apply to these receipts. 6. There is no dispute that the companies, cited above, are nonmembers. However, we are of the view that one has to see the object behind the receipt of these contributions from the above said companies. There is no dispute that the assessee .....

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rt of the expenditure incurred in organizing the events. Hence, in our view, there is no intention to earn any income out of the above said contributions, since it only goes to reduce the expenditure. Hence, we are of the view the above said contribution cannot be subjected to tax as income in the hands of the assessee. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the AO to delete this addition. 7. The next issue contested by the assessee relates to the value of comp .....

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