MADRAS CRICKET CLUB Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE order of the Appellate Tribunal Chennai 'B' Bench dated 13.05.2008 in ITA No,42-46/Mds/2008 for the assessment year 1999-00 2001-02, 2002-03, 2003-04 and 2004-05, is put in issue in this appeal by formulating the following substantial question of law :

(2.) THE appellant company, incorporated under the Companies Act, with the object to promote social interaction among the members of the club, their families and friends to provide club house facilities for sports/games both indoor and outdoor. THE appellant claimed that the mutual association and the entire income of the appellant is not liable to tax since it is mutual in character. A part of the appellant's income is in the form of interest income received from deposits with the bank. For the assessement year 2002-03 the appellant company furnished its return of income on 1st March 2002 declaring a loss of Rs.51,09,692/-. THE appellant's case was reopened under section 147 of the Act to assess the interest income earned from fixed deposits with the Banks, and a notice under section 148 of the Act was issued on 20.03.2006. THE appellant filed its return in response to the said notice on 28.09.2006. THE assessing officer vide his order dated 28.12.2006 completed the assessment under section 143(3) of the Income Tax Act determining the total disclosed income at Rs.17,70,194/- and tax thereon at Rs.7,24,895/- by treating the interest income received by the assessee from the deposits with Bank is income received from non members and hence will not be considered as mutual income. THE Commissioner of Income Tax (Appeals) by a common order dated 23.10.2007 for the assessment years 1999-2000, 2001-02, 2002-03, 2003-04 and 2004-05 dismissed the appellant's appeal by observing that the bank is not a member of the appellant's club. Against that order, the assessee preferred an appeal before the Income Tax Appellate Tribunal. THE Tribunal, by reason of the impugned order dated 13.05.2008, dismissed the appeal filed by the assessee. THE correctness of the same is canvassed by the assessee by filing this appeal by formulating the question of law referred to above.