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Acit, Circle, Panchkula vs M/S Panchkula Golf Club, Panchkula on 3 October, 2018 cites

M/S. Chelmsford Club vs Commissioner Of Income-Tax, Delhi on 2 March, 2000

During the assessment proceedings, the AO asked the assessee to explain the claim about the club as a mutual concern. After considering the assessee's reply, the AO noted that the club is not a mutual concern as its governing body comprises of Chief Secretary, Government of Haryana as President, Principal Secretary to Chief Ministry Secretary, Government of Haryana as Sr. Vice President, Financial Commissioner, Towrn Country Planning, Government of Haryana as a vice president and Chief Administrator, HUDA as member and the other members are also nominated by the President. This indicates that the management & control over the assessee club was with the State Government. The club was not assessed as mutual concern in A.Y. 2007-08 as it failed to fulfill the three tests of mutuality as laid down by the Hon'ble Supreme Court in Chelmsford Club Vs. CIT 243 ITR 89 and in CIT Vs. Bankipur Club Ltd. 226 ITR 97. The claim of the assessee as a mutual concern was also not accepted as the assessee in the income tax return has no where stated that Panchkula Golf Club is a mutual concern. The Form used to . file income tax return was not applicable in this case. Further, AO noted that the sum of Rs. 1,07,89,229/- and Rs. 34,55, 110/- as one time entrance fee contribution from the members and temporary members respectively is a revenue receipt whereas the assessee has taken same as capital receipt on the basis of mutuality. Since, the objective of mutual benefit is not fulfilled, therefore, contribution of Rs. 1,07,89,229/- and Rs.34,55,110/- received by the assessee club from the members during the year was held to be the taxable income of the assessee.
Supreme Court of India Cites 22 - Cited by 103 - Full Document

Commissioner Of Income-Tax, Bier vs M/S. Bankipur Club Ltd on 8 May, 1997

During the assessment proceedings, the AO asked the assessee to explain the claim about the club as a mutual concern. After considering the assessee's reply, the AO noted that the club is not a mutual concern as its governing body comprises of Chief Secretary, Government of Haryana as President, Principal Secretary to Chief Ministry Secretary, Government of Haryana as Sr. Vice President, Financial Commissioner, Towrn Country Planning, Government of Haryana as a vice president and Chief Administrator, HUDA as member and the other members are also nominated by the President. This indicates that the management & control over the assessee club was with the State Government. The club was not assessed as mutual concern in A.Y. 2007-08 as it failed to fulfill the three tests of mutuality as laid down by the Hon'ble Supreme Court in Chelmsford Club Vs. CIT 243 ITR 89 and in CIT Vs. Bankipur Club Ltd. 226 ITR 97. The claim of the assessee as a mutual concern was also not accepted as the assessee in the income tax return has no where stated that Panchkula Golf Club is a mutual concern. The Form used to . file income tax return was not applicable in this case. Further, AO noted that the sum of Rs. 1,07,89,229/- and Rs. 34,55, 110/- as one time entrance fee contribution from the members and temporary members respectively is a revenue receipt whereas the assessee has taken same as capital receipt on the basis of mutuality. Since, the objective of mutual benefit is not fulfilled, therefore, contribution of Rs. 1,07,89,229/- and Rs.34,55,110/- received by the assessee club from the members during the year was held to be the taxable income of the assessee.
Supreme Court of India Cites 18 - Cited by 135 - Full Document
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