2001 (12) TMI 529

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....ound is against holding that assessee is not carrying on any business but is a mutual concern. This ground was also not pressed at the time of the hearing and hence the same is rejected as not pressed. 4. Next ground is against confirming the taxation of guest fees income. The assessee being a Body of Individuals runs a sports club. During the year, it had received guest fees income of Rs. 26,130. The submission of the assessee was that such fees were paid by members with whom the guests came and hence it could not be considered as income from non-members and, therefore, would be exempt on principle of mutuality. Assessing Officer did not accept the contention. He observed that even if the guest fee is paid by the members, even then fact....

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....guest relationship and it remains a fact that it is the member who pays for the facility availed by him - the facility of entertaining his guest. Hence we delete the addition of Rs. 26,130. 7. Next ground is against taxing of party and meeting income received from friends and relatives of members. Total income earned by the assessee from party meetings was Rs. 1,69,928. This was stated to have been received from members and non-members. It was difficult to precisely bifurcate the income into two - that received from members and that received from non-members. Booking register verified by the Assessing Officer showed that about 50 per cent was from non-members. Thus, an addition of Rs. 89,964 was made. CIT(A) confirmed the same. 8. On ....

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....442 of 105 ITR) are relevant for our purposes : "This case, in our opinion, shows that the application of the principle of mutuality is not destroyed by the presence of transactions with, or profits derived from non-members. The said principle could apply to transactions with members. The maintenance of a combined account for all the transactions does not also affect the claim, as the way in which the accounts are kept is not conclusive in matters of taxation. The two activities can in appropriate cases be separated and the profits, if any, from the members, can be taken on the basis of the actuals from the accounts or, at any rate, by an estimate if it should become necessary". It appears that assessee is totally denied of its claim ....