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2019 (11) TMI 339

..... The differential membership subscription is only fixed to recover higher subscription from those having larger turnover, while seeking to support fledglings/new entrants. The membership based on the turnover, carry differential voting rights. However, uniform service is provided by the assessee to all categories of members, irrespective of the membership fee paid. No specific services are being provided to members in lieu of payment of higher membership subscription charges. During the relevant previous year, the assessee received gross amount of ₹ 20.84 crores on account of annual membership subscription from members. In the return of income, the assessee, claimed exemption in respect of an amount on the principle of mutuality, arriv .....

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..... peal by Revenue has been directed against the Order of the Ld. CIT(A)-36, New Delhi, Dated 12.08.2016, for the A.Y. 2012-2013, on the following grounds : 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law in allowing the appeal of the assessee ignoring the fact that the activities of the assessee is in the nature of trade, commerce or business or any activity of rendering any service in relation to any trade, commerce or business for cess or fee or any other consideration, irrespective of the nature of use or application, or retention of the income from such activities. The assessee falls in the last category of general public utility as per the definition of Sec. 2(15) of I.T. Act 1961 and not .....

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..... 009-10 and onwards. Accordingly, the assessee offered to tax income earned from various activities as business income. Being so, the question of denial of exemption, under section 11/12 of the Act, as raised by the AO does not come into the picture. The differential membership subscription is only fixed to recover higher subscription from those having larger turnover, while seeking to support fledglings/new entrants. The membership based on the turnover, carry differential voting rights. However, uniform service is provided by the assessee to all categories of members, irrespective of the membership fee paid. No specific services are being provided to members in lieu of payment of higher membership subscription charges. During the relevant .....

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..... & voting rights being different. The assessee has also relied on various case laws on the principle of mutuality. After considering all the facts and circumstances of the case which are same as that of A.Y. 2009-10 and keeping in view the order of my predecessor for A.Y. 2009-10 dated 13.09.2013 & my order for A.Y. 2010- 11 dated 14.03.2016, I am of the view that the benefit on principle of mutuality be granted to the assessee on membership fees from members only Further due credit to TDS & Advance Tax may be given after verification. 9. In the result, the appeal of the assessee is allowed. 4. Learned Counsel for the Assessee, at the outset submitted that the issue is covered by Order of ITAT, Delhi Bench in the case of same as .....

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..... cussion. 13. For the above reasons, we concur with the findings of the Ld. CIT(A) that the case law relied upon by the Id. AR supports the view taken by the Ld. CIT(A) on the aspect of principle of mutuality and the entitlement of the assessee to claim the benefit of Section 11 of the Act. We, therefore, uphold the same and find the grounds of appeal as devoid of merits. 14. In the result, appeal of the revenue is dismissed. 5. The Ld. D.R. also stated that the issue is covered by the aforesaid Order of the Tribunal in the case of same assessee. 6. Following the Order of the Coordinate Bench of the Tribunal Dated 20.09.2019 (supra), on identical issue, we dismiss the departmental appeal. 7. In the result, appeal of the Department dismissed. .....

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