Doctrine of mutuality applied to club income, and no referable question of law survived on the facts.

Concurrent findings showed that the club's facilities were used exclusively by members and that no non-member was permitted to use or occupy any room during the relevant accounting period. On that factual basis, charges collected from members for amenities did not involve any trading element, because mutual dealings do not generate assessable profit where a person cannot trade with himself. The club's income was therefore treated as exempt under the doctrine of mutuality. As the controversy depended entirely on findings of fact, no referable question of law survived under section 256(2) of the Income-tax Act, 1961, and the request for a direction to refer was declined.

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Issues: Whether, on the concurrent finding that no non-member was allowed to use the club facilities during the relevant accounting period, any referable question of law arose for directing a reference under section 256(2) of the Income-tax Act, 1961, and whether the club's income was exempt under the doctrine of mutuality.

Analysis: The concurrent findings recorded that the club's facilities were used exclusively by members and that no non-member was permitted to occupy any room during the relevant period. On that factual foundation, the charging of members for amenities provided to them did not involve any trading element, since a person cannot trade with himself and derive assessable profit from mutual dealings. The entitlement to exemption under the doctrine of mutuality followed directly from those findings. As the controversy turned on a pure finding of fact, no question of law capable of reference survived.

Conclusion: No referable question of law arose, and the request for a direction to refer the questions was declined.

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