TMI Blog2015 (9) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... s a charitable organization and therefore, the Assessing Officer as well as the ld. CIT(A) rightly denied the exemption claim of the assessee under section 11 of the Act. Assessee is not eligible for claiming exemption under section 11 of the Act and also not eligible for claiming principles of mutuality. The Hon'ble Kerala High Court in the case of Investors Club, Trissur v. CIT [2008 (2) TMI 546 - KERALA HIGH COURT] has observed that "we do not know how the assessee can claim principles of mutuality when the assessee has entitled to claim exemption under charitable organization, it has got registration under section 12A of the Act. Depreciation claim correctly denied - The assessee has not provided any material to show that he is entitled to claim depreciation again on the same assets. That apart, once the exemption claimed by the assessee under section 11 of the Act is disallowed, the claim of depreciation has to be calculated as per the regular provisions of the Act. Accordingly, this ground of appeal of the assessee is also dismissed. - Decided against assessee. - ITA No. 596/Mds/2013 - - - Dated:- 22-7-2015 - Chandra Poojari, AM And V. Durga Rao, JM,JJ. For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activity of celebration itself is of business promotion for the members whose activities are business/profession. The Golden Jubilee celebration was viewed as a business promotion campaign in the name of the age of the organization. The contributors certainly stand to be benefited as could be seen from the list of the sponsors. All of them are related to the business of clearing and forwarding activity. The Association has earned a good profit of ₹ 13,05,976/- from the functions, in addition to spending a considerable part of the collection on food and entertainment of the members and their family. Accordingly, the Assessing Officer has denied the claim of the assessee under section 11 of the Act. 4. So far as mutuality claim of the assessee, the Assessing Officer has observed by following various judicial precedents and held that since there is no identity between the contributors and participants, the assessee is not eligible for considering under the principles of mutuality. Accordingly, the assessment was completed. 5. On appeal before the ld. CIT(A), the assessee has submitted that the assessee is committed for the cause and development of Custom House Agents in I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount received for the purpose of Golden Jubilee celebration at ₹ 60,05,087/-. The ld. CIT(A), on the basis of contribution received and after reducing the proportionate allowable expenses from the contribution of non-members of ₹ 6,98,522/-, directed the Assessing Officer to assess the taxable income at ₹ 36,08,385/- and the calculation is given as under: Interest on FDs etc. from banks Rs.4,76,040/- Rental income Rs.1,76,780/- Non-member silver jubilee income Rs.29,55,565/- Total Rs.36,08,385/- 8. Accordingly, the ld. CIT(A) directed the Assessing Officer to calculate the taxable income of ₹ 36,08,385/- being income from non-members as against ₹ 47,30,060/- assessed by him. Accordingly, the ld. CIT(A) rejected the claim of exemption under section 11 of the Act. However, the ld. CIT(A) has allowed the claim of principles of mutuality to the extent of income received from the members. 9. On being aggrieved, the Revenue as well as assessee carried the matter in appeal before the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... difficulties that may be experienced by members. (6) To evolve, formulate and administer the welfare scheme for the labourers working in Chennai port area and the staff of officers working in such scheme. 13. From the above objects, it is clear that the assessee is existed for the purposes of development of Custom House Agents Trade in India. The main objects are to diffuse knowledge and encourage and develop the Custom House Agents in the fields of clearing and forwarding and allied operations. Therefore, the assessee has claimed that it is qualified to be an organization engaged in advancement object of general public utility. The point for consideration before us is whether the assessee is a charitable organization for the purpose of claiming exemption under section 11 of the Act in view of the proviso of section 2(15) brought to substitute w.e.f. 01.04.2009? The provisions of section 2(15) both prior to 01.04.2009 and after 01.04.2009 are extracted as under: Section 2(15) prior to 01.04.2009 (pre-amendment) Section 2(15) Charitable purpose includes relief of the poor, education, medical relief and the advancement of any other object of general public utility. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on-members, by disallowing proportionate expenditure to the extent of contribution received from the members, held that mutuality is applicable and directed the Assessing Officer to consider the same. We find that the contribution received by the assessee from the members of ₹ 23,51,000/- and from nonmembers ₹ 36,54,087/- are put in a common kitty and the assessee has incurred the expenditure out of the funds received from the members as well as non-members. Therefore, it is difficult to identify the expenditure because both the contributions i.e. from members as well as non-members are kept in common kitty. Therefore, the ld. CIT(A) went in wrong to decide after reducing proportionate allowable expenditure from the contributions received from non-members and directed the Assessing Officer to assess the net tax of ₹ 36,08,385/-. Further, we find that the assessee having 12A registration and claiming as a charitable organization not eligible to be claimed again under principles of mutuality. The assessee being charitable organization cannot claim the benefit under principles of mutuality for the reason that the charitable organization is for the purpose of the thir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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