Maharaja Pratapsinh Coronation Gymkhana Vs ITO (ITAT Ahmedabad)
In the matter abovementioned ITAT referred to the AO to examine the allowability of the claim u/s 11 of the Act in view of the decision of the Hon’ble Apex Court in the decision of ACIT Vs. Ahmedabad Urban Development Authority, (2022) 449 ITR 1 (SC).
Assessee is granted registration u/s 12A/AA. AO hold that the activities of the assessee is not in the nature of charitable purpose in view of the definition of section 2(15) and treating the activities of the club as of commercial nature and profits earned by the assessee are not merely incidental. AO denied the benefit of the claim of exemption u/s 11 by invoking the provisions of section 13(8) r.w.s. 2(15) and held that assessee is an AOP and thus income has to be assessed as business income. AO, further, disllowed Rs. 4,94,017/- representing the terminated members’ dues written off as non- recoverable.
Revenue submitted that assessee has been covered by the first proviso to Section 2(15) based on the fees collected by the assessee against the services provided to the members as well as non-members. This matter has been examined by the Tribunal in earlier year and has been referred to the Revenue Authorities to examine the bifurcation of the fees collected from members and non-members.
