1984 (10) TMI 94

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....ollection by way of charges. The claim of the assessee was, however, accepted by the Commissioner (Appeals) who held that the facilities available in the club have been used exclusively by its members and that the assessee is entitled to exemption on the doctrine of mutuality. Aggrieved by the same, the department has come up in appeal. 3. The only ground taken in the appeal is that the Commissioner (Appeals) erred in holding that the income of the assessee is entitled to exemption. 4. The learned departmental representative relied upon certain provisions of the rules and bye-laws of the assessee-club to show that the amenities and privileges offered by the club were extended to outsiders as distinct from the members, that the outside....

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....ess as an exceptional measure and with the previous consent of the honorary secretary. With regard to the provision mentioned last, a statement was filed by the secretary of the assessee-club that the club had not allowed any person other than a member to occupy the bedroom of the club. In the absence of any material to indicate that the statement is false, we see no reason why it should not be accepted. The Commissioner (Appeals) was, therefore. perfectly justified in accepting this statement. It has, therefore, to be taken that during the relevant period no non-member was allowed to occupy the bedroom of the club. The learned departmental representative mainly relied upon the fact that the members can introduce visitors and guests. In thi....

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....Officers v. Watkins [1934] 18 TC 499 (KB). So long as the occupation of the room is referable to the amenity provided for the members for themselves, no income can be said to be earned, so as to be brought to tax by the provisions of the Income-tax Act".... It is, therefore, clear that if the occupation of the room or the enjoyment of any other facility is referable to the amenity provided for the members for themselves, it cannot be said that the assessee-club had transactions with non-members. 8. We are unable to accept the contention of the learned departmental representative that when the members bring in guests who enjoy the amenities of the club and when members themselves pay for the enjoyment of the amenities, the club is prov....