आयकर अपीलीय अिधकरण, ‘ए’ (cid:13)ायपीठ, चे(cid:18)ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI (cid:20)ी एस एस िव(cid:23)नेti रिव, (cid:13)ाियक सद(cid:27) एवं (cid:20)ी एस. आर. रघुनाथा, लेखा सद(cid:27) के सम"

BEFORE SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER AND SHRI S. R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA Nos.: 383 & 384/Chny/2024 िनधा#रण वष# / Assessment Years: 2010-11 & 2011-12 Sankari Lorry Urimaiyalargal DCIT, Sangam, vs. Circle -2, 1/6, 15-B/4, Salem Main Road, Salem.

Sankari – 637 301.

[PAN:AABTS-9227-N]

(अपीलाथ%/Appellant) (&’थ%/Respondent)

अपीलाथ% की ओर से/Appellant by : Shri. T. Vasudevan, Advocate &’थ% की ओर से/Respondent by : Shri. P. Krishna Kumar, J.C.I.T. सुनवाई की तारीख/Date of Hearing : 19.08.2025 घोषणा की तारीख/Date of Pronouncement : 10.10.2025 आदेश /O R D E R PER S. R. RAGHUNATHA, AM:

Both the appeals filed by the assessee are directed against separate orders both dated 22.12.2023 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2010-11 and

2011-12.

2. Since issues raised in both the appeals are similar based on the same identical facts, with the consent of both the parties, we proceed to hear the appeals together and pass consolidated order for the sake of convenience.

3. First, we shall take appeal in ITA No.383/Chny/2024 AY 2010-11 for adjudication.

4. The assessee raised 9 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld.CIT(A) is justified in confirming the addition of Rs.92,46,175/- by rejecting the claim of exemption of income on account of principles of mutuality in the given facts and circumstances of the case.

5. Brief facts relating to the case are that the assessee is an AOP and filed return of income for AY 2010-11 admitting an income of Rs.1,10,45,669/-. The return filed by the assessee was processed u/s.143(1) of the Income Tax Act, 1961 [“Act” in short]. Subsequently, the case was manually selected for scrutiny and the Assessing Officer(AO) issued notice u/s.143(2) of the Act dated 23.09.2011. While computing its taxable income, the assessee has claimed certain income, which is shown as receipts in the Profit and Loss Account, as inadmissible income and reduced the same from its gross total income and computed the tax on such net total income. The assessee claimed such inadmissible amounts representing members' subscription (Rs.88,580/- ), donation from members (Rs.82,55,600/-), New Member Donation (Rs.7,20,000/-), Five-rupee donation (Rs.1,80,795/-) and entrance Fees from Members (Rs.1,200/-) as inadmissible and exempt. On perusal of the Accounts and other relevant details filed by the assessee, the AO held that the dominant activities engaged by the assessee were not covered under the Principles of Mutuality to claim the said income as inadmissible and exempt. In view of the same, rejecting the claim of Principles of Mutuality, the AO disallowed the inadmissible claim of deduction of Rs.92,46,175/- and added to the total income of the assessee and completed the assessment u/s.143(3)

of the Act dated 28.03.2013. On appeal, after considering the submissions, the ld.CIT(A) confirmed the addition made by the Assessing Officer. On being aggrieved, the assessee is in appeal before the Tribunal.

6. The ld.AR Shri T.Vasudevan, Advocate submits that the amount of Subscription, Entrance Fee, Donation from Existing and New members and Five Rupee Donation etc. received from members are kept as common fund along with the funds generated from the commercial transactions. He further submits that the receipts in the said accounts are recorded for the payments of various expenses of the sangam activities under the objects of the Sangam which are exclusively for the benefit of the members and also to meet the expenses on commercial activities including the payment of Discount to members and to pay the Rebates to the members on their purchases. The discount to non-mem