TaxTMI 
TaxTMI 
2013 (11) TMI 67
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....n law, the Ld. CIT(A) erred in directing the AO to allow exemption u/s 11 of the IT Act, 1961 ignoring the fact that the income of the assessee earned from the activities relating to providing food, liquor, and facility for playing cards and other such games which do not qualify for deduction under provisions of section 11 of the Act" "2. Alternatively when the activities of the trust is limited to providing specific services to its members why the trust should not be assessed as mutual association and income arising out of non activities i.e. interest on securities, bank etc should not be charged to tax applying the ratio of decision in the case of Bankipur Club Ltd (226 ITR 97); 3. The appellant prays that the order of the CIT(A) be set....
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....peal for assessment years 1992-93 u/s 260A is also pending before the Hon'ble Bombay High Court and the question of law involved in this appeal is as under : "Whether on facts and in the circumstances of the case and in law, the ld. ITAT, Mumbai was justified in holding that the income made by the assessee on the activities related to provision of food, liquor and facility for playing cards and other such games qualified for deduction under provisions of section 11 of the IT Act, 1961, assuming these activities concerning a general public utility/charitable purposes." The AO stated that assessee is a club which is not open to general public. That the entry to the club is restricted to the members, their family members and guest accompanyi....
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.... u/s 11 of the Act for its income except for income from providing facilities of playing cards. The ld. CIT(A) has further stated that the Tribunal for assessment year 2003-04 in its order dated 28.1.2009 stated that the activities of the assessee club on social functions, pavilion, board room, terrace and card room are not clearly for the object of the club. That the only exception being the functions organized on independence day, republic day and Diwali, therefore, these activities would not qualify for exemption u/s 11. The ld. CIT(A) has held that assessee being charitable institution being eligible for exemption u/s 11 of the Act. In the given situation, the action of the AO in bringing to tax the interest income from securities while....
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....ht in directing the AO to allow exemption under section 11 of the Income Tax act, 1961 ignoring the fact that the income of the assessee is earned from the activities relating to providing food, liquor and facility for playing cards and other such games which do not qualify for deduction under the provisions of section 11 of the Income Tax Act, 1961 (b) Whether, on the facts and circumstances of the case and in law, the Tribunal was right in ignoring the fact that the AO has violated the provisions of section 13 of the Income Tax Act wherein undue benefit is endured on the persons specified under section 13(1) of the Act and also such activities of the Trust are not incidental objects of the Trust and hence has not complied with the requir....
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....umbai V/s ITO in ITA No.9039/Mum/1992 wherein it was held that the activity of bar and restaurant was incidental to the main object of providing facilities of swimming to the members. The Tribunal held that the assessee was entitled to exemption u/s 11 of the Act except income from playing cards. We also observe that the Tribunal vide its order 22.5.2009 in ITA No.1892/Mum/2008 for assessment year 2004-05 decided the same issue in the assessee's own case by following the decision in assessee's own case for assessment year 2001-02 dated 20.1.2008 in ITA No.4191/Mum/2005 that assessee is entitled to deduction under the provisions of section 11 of the Act. In respect of food and liquor, we observe that on perusal of order of Tribunal dated 28.....
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.... interest income of Rs.2,96,18,279 would not be liable to tax. " 12. Ld. AR submitted that if it is held that the assessee is entitled to benefit of section 11 of the Act, Ground Nos. 1 and 2 of the appeal do not survive and become infructuous. 13. Since we have held hereinabove that the assessee is entitled to benefit of section 11 of the Act, in view of the earlier orders of Tribunal which were also confirmed by the Hon'ble Jurisdictional High Court (supra), the Ground Nos.1 and 2 of the appeal taken by the assessee are rejected. 14. Amended Grounds No.3 and 4 of the appeal taken by assessee are as under : "3. The CIT(A) erred In holding that receipts for social functions, pavilion, board room and open terrace would not be eligible fo....