CIT v. Bankipur Club Ltd.

5 SCC 394Reported decision1997#4987 most cited

What is CIT v. Bankipur Club Ltd. authority for?

Income derived from transactions with non-members or from commercial activities is not covered by the doctrine of mutuality, and any surplus from such activities is taxable. Mutuality requires a strict identity between contributors and participants; deviation from this identity transforms mutual transactions into commercial ones.

24

judgments rely on this decision, according to BharatTax’s citation analysis of 292,668 Indian tax judgments — from 2010 to 2026.

Also referred to as

CIT v. Bankipur Club Ltd. · 1997 · SCC · doctrine of mutuality · mutuality principle · taxable income · commercial activities · non-members · contributors and participants identity

Sections most often in play

Section 142(1)Section 143(2)Section 143(3)Section 2(24)Section 57Section 57(iii)

Issues it is cited on

doctrine of mutualitymutuality principlesection 10(20)section 38section 253(1)section 2(19)right to receivesection 18section 16section 57section 2(24)section 80p(2)(a)

Judgments citing CIT v. Bankipur Club Ltd.

MARATHI BANDHKAM VYA vs. AYIK ASSOCIATION,PUNEVS.ITO, EXEMPTION WARD-1(1),PUNE, PUNE

In the result, the appeal filed by the assessee is partly allowed

ITA 2310/PUN/2025[2018-19]Status: DisposedITAT Pune10 Feb 2026AY 2018-19
For Appellant: Shri Suhas P. BoraFor Respondent: Shri Milind Debaje (Virtual)
Section 143(2)Section 143(3)

…s of the CIT(Appeals) CIT, Bombay City vs. Royal These decisions have been Western India Turf Club Ltd. AIR considered by the Hon'ble 1954 SC 85 Supreme Court in the case of Bangalore Club [2013] 29 taxmanın.com 29 (SC) CIT. Bihar vs Bankipur Club Ltd. [1997] 5 SCC 394.1 CIT vs. Escort Dealers Association These decisions were delivered Ltd. [253 ITR 305] prior to the decision of the (Date of order: 19.09.2001) Hon'ble Supreme Court in the case of Bangalore Club (supra) Indermani Jatia vs. CIT [35 ITR 298] (Date of order 03.10.1958) Date of order: 14.01.2013 All the cases relied upon in Para 1.10 Yum Restaurants (…

ANDHRA PRADESH ADVOCATES WELFARE FUND,HYDERABAD vs. INCOME TAX OFFICER, WARD-8(2), HYDERABAD,

In the result, all the three appeals of the assessee are dismissed

ITA 664/HYD/2023[2018-19]Status: DisposedITAT Hyderabad24 Jul 2024AY 2018-19

Bench: SHRI K.NARASIMHA CHARY (Judicial Member), SHRI MADHUSUDAN SAWDIA (Accountant Member)

For Appellant: Shri P.R. Suresh, C.AFor Respondent: Shri Kumar Pranav, CIT(DR) &
Section 23Section 3

…ghted that mutuality requires a strict iden"ty between contributors and par"cipants, and any devia"on from this iden"ty transforms the nature of the transac"ons from mutual to commercial. 44. In Commissioner of Income Tax, Bihar vs. Bankipur Club Ltd., (1997) 5 SCC 394, the Hon’ble Court held that income derived from transac"ons involving non-members or from the ac"vi"es in the nature commercial ac"vi"es does not qualify for mutuality. The ruling emphasized that the absence of iden"ty between contributors and beneficiaries converts the surplus into taxable income. This judgment reinforced the no"on that mutuality…

ANDHRA PRADESH ADVOCATES WELFARE FUND,HYDERABAD vs. INCOME TAX OFFICER, WARD 8(2), HYDERABAD, HYDERABAD

In the result, all the three appeals of the assessee are dismissed

ITA 663/HYD/2023[2017-18]Status: DisposedITAT Hyderabad24 Jul 2024AY 2017-18

Bench: SHRI K.NARASIMHA CHARY (Judicial Member), SHRI MADHUSUDAN SAWDIA (Accountant Member)

For Appellant: Shri P.R. Suresh, C.AFor Respondent: Shri Kumar Pranav, CIT(DR) &
Section 23Section 3

…ghted that mutuality requires a strict iden"ty between contributors and par"cipants, and any devia"on from this iden"ty transforms the nature of the transac"ons from mutual to commercial. 44. In Commissioner of Income Tax, Bihar vs. Bankipur Club Ltd., (1997) 5 SCC 394, the Hon’ble Court held that income derived from transac"ons involving non-members or from the ac"vi"es in the nature commercial ac"vi"es does not qualify for mutuality. The ruling emphasized that the absence of iden"ty between contributors and beneficiaries converts the surplus into taxable income. This judgment reinforced the no"on that mutuality…

ANDHRA PRADESH ADVOCATES WELFARE FUND,HYDERABAD vs. INCOME TAX OFFICER, WARD 8(2), HYDERABAD

In the result, all the three appeals of the assessee are dismissed

ITA 662/HYD/2023[2016-17]Status: DisposedITAT Hyderabad24 Jul 2024AY 2016-17

Bench: SHRI K.NARASIMHA CHARY (Judicial Member), SHRI MADHUSUDAN SAWDIA (Accountant Member)

For Appellant: Shri P.R. Suresh, C.AFor Respondent: Shri Kumar Pranav, CIT(DR) &
Section 23Section 3

…ghted that mutuality requires a strict iden"ty between contributors and par"cipants, and any devia"on from this iden"ty transforms the nature of the transac"ons from mutual to commercial. 44. In Commissioner of Income Tax, Bihar vs. Bankipur Club Ltd., (1997) 5 SCC 394, the Hon’ble Court held that income derived from transac"ons involving non-members or from the ac"vi"es in the nature commercial ac"vi"es does not qualify for mutuality. The ruling emphasized that the absence of iden"ty between contributors and beneficiaries converts the surplus into taxable income. This judgment reinforced the no"on that mutuality…

THE COMMISSIONER OF INCOME TAX, INTERNATIONAL TAXATION-1, NEW DELHI vs. DELOITTE TOUCHE TOHMASTU

The appeals stand disposed of

ITA/403/2022HC Delhi18 Oct 2023

Bench: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MR. JUSTICE GIRISH KATHPALIA

Section 143(2)Section 260A

…ions of Verein, showing that the respondent/assessee is an association of its members, managed by its members and providing services solely for the benefits of its members. Placing reliance on the judgments in the cases of CIT vs Bankipur Club Ltd, (1997) 5 SCC 394; Chelmsford Club vs CIT, (2000) 3 SCC 214 and Commissioner of Income Tax vs Common Effluent Plant (Thane Belapur) Association, (2010) SCC OnLine Bom 2042, learned counsel for the respondent/assessee strongly contended that the present case clearly stands governed by the concept of mutuality. 6. Thence, fulcrum of the present disp…

THE COMMISSIONER OF INCOME TAX, INTERNATIONAL TAXATION-1, NEW DELHI vs. DELOITTE TOUCHE TOHMASTU

The appeals stand disposed of

ITA/404/2022HC Delhi18 Oct 2023

Bench: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MR. JUSTICE GIRISH KATHPALIA

Section 143(2)Section 260A

…ions of Verein, showing that the respondent/assessee is an association of its members, managed by its members and providing services solely for the benefits of its members. Placing reliance on the judgments in the cases of CIT vs Bankipur Club Ltd, (1997) 5 SCC 394; Chelmsford Club vs CIT, (2000) 3 SCC 214 and Commissioner of Income Tax vs Common Effluent Plant (Thane Belapur) Association, (2010) SCC OnLine Bom 2042, learned counsel for the respondent/assessee strongly contended that the present case clearly stands governed by the concept of mutuality. 6. Thence, fulcrum of the present disp…

PRATHAMIK KRUSHI PATTIN SAHAKARI SANGH NIYAMIT,BEDKIHAL vs. INCOME TAX OFFICER, WARD - 1, NIPANI

ITA 24/PAN/2023[2017-18]Status: DisposedITAT Panaji06 Oct 2023AY 2017-18

Bench: Hon’Ble Shri Satbeer Singh Godara & Shri G. D. Padmahshali(Through Virtual Hearing From Pune) Asstt Sr

Section 250Section 253(1)Section 80P(2)

…mutuality has to be tested transaction to transaction and instance to instance and to lift the veil it necessity to discern the nature of each transaction when so required’. And applying the dictum laid by their Lordships in ‘CIT Vs Bankipur Club’ reported in 5 SCC 394 ‘a host of factors need to be considered to arrive at a conclusion as to at what point does the relationship of mutuality end and that of trading begin’. And this exercise, in our considered view needs to be undertaken for each assessment year separately, since each assessment year is a separate unit in view of the law laid down by the Apex Court i…

SHRI GOPALKRISHNA CO-OPERATIVE SOCIETY LIMITED,BHATKAL vs. INCOME TAX OFFICER, WARD - 1, KARWAR

ITA 23/PAN/2023[2018-19]Status: DisposedITAT Panaji06 Oct 2023AY 2018-19

Bench: Hon’Ble Shri Satbeer Singh Godara & Shri G. D. Padmahshali(Through Virtual Hearing From Pune) Asstt Sr

Section 250Section 253(1)Section 80P(2)

…mutuality has to be tested transaction to transaction and instance to instance and to lift the veil it necessity to discern the nature of each transaction when so required’. And applying the dictum laid by their Lordships in ‘CIT Vs Bankipur Club’ reported in 5 SCC 394 ‘a host of factors need to be considered to arrive at a conclusion as to at what point does the relationship of mutuality end and that of trading begin’. And this exercise, in our considered view needs to be undertaken for each assessment year separately, since each assessment year is a separate unit in view of the law laid down by the Apex Court i…

SHRI GOPALKRISHNA CO-OPERATIVE SOCIETY LIMITED,BHATKAL vs. INCOME TAX OFFICER, WARD - 1, KARWAR

ITA 22/PAN/2023[2017-18]Status: DisposedITAT Panaji06 Oct 2023AY 2017-18

Bench: Hon’Ble Shri Satbeer Singh Godara & Shri G. D. Padmahshali(Through Virtual Hearing From Pune) Asstt Sr

Section 250Section 253(1)Section 80P(2)

…mutuality has to be tested transaction to transaction and instance to instance and to lift the veil it necessity to discern the nature of each transaction when so required’. And applying the dictum laid by their Lordships in ‘CIT Vs Bankipur Club’ reported in 5 SCC 394 ‘a host of factors need to be considered to arrive at a conclusion as to at what point does the relationship of mutuality end and that of trading begin’. And this exercise, in our considered view needs to be undertaken for each assessment year separately, since each assessment year is a separate unit in view of the law laid down by the Apex Court i…

THE MARCEL URBAN CO-OPERATIVE CREDIT SOCIETY LIMITED,MARCEL vs. INCOME TAX OFFICER, WARD - 2(3), PANAJI

ITA 2/PAN/2023[2013-14]Status: DisposedITAT Panaji06 Oct 2023AY 2013-14

Bench: Hon’Ble Shri Satbeer Singh Godara & Shri G. D. Padmahshali(Through Virtual Hearing From Pune) Asstt Sr

Section 250Section 253(1)Section 80P(2)

…mutuality has to be tested transaction to transaction and instance to instance and to lift the veil it necessity to discern the nature of each transaction when so required’. And applying the dictum laid by their Lordships in ‘CIT Vs Bankipur Club’ reported in 5 SCC 394 ‘a host of factors need to be considered to arrive at a conclusion as to at what point does the relationship of mutuality end and that of trading begin’. And this exercise, in our considered view needs to be undertaken for each assessment year separately, since each assessment year is a separate unit in view of the law laid down by the Apex Court i…

ARULMIGU ATHI KARUMAPURAM SELLANDIAMMAN KUDIPPAATTUKARARKAL SEVA TRUST,NAMAKKAL vs. CIT (EXEMPTIONS), CHENNAI

In the result, the appeal filed by the assessee is dismissed

ITA 705/CHNY/2018[-]Status: DisposedITAT Chennai10 May 2023

Bench: Shri V. Durga Rao & Shri G. Manjunathaआयकर अपील सं./I.T.A. No.705/Chny/2018 Arulmigu Aathi Karumapuram The Commissioner Of Sellandiamman Kudipaattukarakal Vs. Income Tax (Exemptions), Seva Trust, C/O Shri N. Chennai – 600 034. Subramaniyan, Advocate, 478, New Addl. Law Chambers, High Court Campus, Chennai 600 104. [Pan: Aafta7759M] (अपीलाथ" /Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By Shri N. Subrmaniyan, Advocate : ""थ" की ओर से/Respondent By Shri M. Rajan, Cit : सुनवाई की तारीख/ Date Of Hearing 07.03.2023 : घोषणा की तारीख /Date Of Pronouncement : 10.05.2023 आदेश /O R D E R Per V. Durga Rao: This Appeal Filed By The Assessee Is Directed Against The Order Of The Ld. Commissioner Of Income Tax (Exemptions), Chennai Dated 29.12.2017 Passed Under Section 12Aa Of The Income Tax Act, 1961 [“Act” In Short]. The Grounds Raised By The Assessee Are As Under: A. That The Order Of The Learned Cit(E) Is Erroneous In Law & Is Against The Principles Of Natural Justice. B. The Learned Cit(E) Erred In Not Considering The Grounds Of Appeal, Written Submissions & The Decisions In Proper Perspective. C. The Learned Cit (E) Committed Grave Errors In Not Taking Into Consideration That The Appellant Is Nothing But An Association Of Persons In The Eye Of Law

Section 12ASection 2(24)Section 2(31)

…ust is only a convenient entity formed to carry out the objects and it does not receive any contributions from any one and thus satisfy all the ingredients required to apply doctrine of mutuality as held by the Hon'ble Supreme Court in Chelmsford Club, (2000) 3 SCC 214 and the learned CIT even failed to refer the judgment relied upon by the Appellant before passing the impugned judgment which is perverse. D. That the finding of the learned CIT(E) in paragraph 2 (as well as in paragraph 4) of the impugned order that “the sources for the income of the Appellant Trust is from the lease amount derived from the lands…

JUBHLIEE HILLS INTERNATIONAL CENTRE vs. INCOME TAX OFFICER, HYDERABAD

Appeal is allowed

ITTA/205/2005HC Telangana04 Jan 2023

Bench: N.TUKARAMJI,UJJAL BHUYAN

For Appellant: Mr. Challa GunaranjanFor Respondent: Mr. J.V.Prasad, Standing Counsel
Section 13Section 260A

…pellant : Mr. Challa Gunaranjan ^ Counsel for Respondent : Mr. J.V.Prasad, Standing Counsel, IT Department < GIST:  HEAD NOTE: ? CASES REFERRED: (2014) 13 SCC 459 (2008) 302 ITR 279 (1997) 5 SCC 394 ::2:: THE HON’BLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HON’BLE SRI JUSTICE N.TUKARAMJI I.T.T.A.No.205 of 2005 JUDGMENT: (Per the Hon’ble the Chief Justice Ujjal Bhuyan) Heard Mr. Challa Gunaranjan, learned counsel for the appellant and Mr. J.V.Prasad, learned Standing Counsel, Income Tax Department for the respondent. 2…

THE FATEH MAIDAN CLUB(AOP),HYDERABAD vs. DCIT, CIRCLE -5 (1), HYDERABAD

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 99/HYD/2022[2014-15]Status: DisposedITAT Hyderabad30 Jun 2022AY 2014-15

Bench: Shri R. K. Panda

For Appellant: Sri S. Rama Rao, AdvocateFor Respondent: Sri Waseem Ur Rehman,DR
Section 142(1)Section 144Section 147Section 148

…ctivity and hence is not taxable on the principles of mutuality is concerned, he submitted that the Hon'ble Supreme Court in the case of Bangalore Club (Supra) after considering the facts and the ratio laid down in the case of CIT vs. Bankipur Club Ltd (1997) 5 SCC 394 (Para 20) and Natarajan Finance Corporation has decided the issue in favour of the Revenue. Therefore, the decision of the Tribunal no longer holds good in view of the decision of the Hon'ble Supreme Court. He also relied on various other decisions. 14. So far as the taxability of the income at maximum marginal rate is concerned, he submitted that…

DCIT, CIRCLE -5 (1), HYDERABAD vs. THE FATEH MAIDAN CLUB, HYDERABAD

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 98/HYD/2022[2012-13]Status: DisposedITAT Hyderabad30 Jun 2022AY 2012-13

Bench: Shri R. K. Panda

For Appellant: Sri S. Rama Rao, AdvocateFor Respondent: Sri Waseem Ur Rehman,DR
Section 142(1)Section 144Section 147Section 148

…ctivity and hence is not taxable on the principles of mutuality is concerned, he submitted that the Hon'ble Supreme Court in the case of Bangalore Club (Supra) after considering the facts and the ratio laid down in the case of CIT vs. Bankipur Club Ltd (1997) 5 SCC 394 (Para 20) and Natarajan Finance Corporation has decided the issue in favour of the Revenue. Therefore, the decision of the Tribunal no longer holds good in view of the decision of the Hon'ble Supreme Court. He also relied on various other decisions. 14. So far as the taxability of the income at maximum marginal rate is concerned, he submitted that…

THE FATEH MAIDAN CLUB(AOP),HYDERABAD vs. DCIT, CIRCLE -5 (1), HYDERABAD

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 101/HYD/2022[2016-17]Status: DisposedITAT Hyderabad30 Jun 2022AY 2016-17

Bench: Shri R. K. Panda

For Appellant: Sri S. Rama Rao, AdvocateFor Respondent: Sri Waseem Ur Rehman,DR
Section 142(1)Section 144Section 147Section 148

…ctivity and hence is not taxable on the principles of mutuality is concerned, he submitted that the Hon'ble Supreme Court in the case of Bangalore Club (Supra) after considering the facts and the ratio laid down in the case of CIT vs. Bankipur Club Ltd (1997) 5 SCC 394 (Para 20) and Natarajan Finance Corporation has decided the issue in favour of the Revenue. Therefore, the decision of the Tribunal no longer holds good in view of the decision of the Hon'ble Supreme Court. He also relied on various other decisions. 14. So far as the taxability of the income at maximum marginal rate is concerned, he submitted that…

THE FATEH MAIDAN CLUB(AOP),HYDERABAD vs. DCIT, CIRCLE -5 (1), HYDERABAD

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 100/HYD/2022[2015-16]Status: DisposedITAT Hyderabad30 Jun 2022AY 2015-16

Bench: Shri R. K. Panda

For Appellant: Sri S. Rama Rao, AdvocateFor Respondent: Sri Waseem Ur Rehman,DR
Section 142(1)Section 144Section 147Section 148

…ctivity and hence is not taxable on the principles of mutuality is concerned, he submitted that the Hon'ble Supreme Court in the case of Bangalore Club (Supra) after considering the facts and the ratio laid down in the case of CIT vs. Bankipur Club Ltd (1997) 5 SCC 394 (Para 20) and Natarajan Finance Corporation has decided the issue in favour of the Revenue. Therefore, the decision of the Tribunal no longer holds good in view of the decision of the Hon'ble Supreme Court. He also relied on various other decisions. 14. So far as the taxability of the income at maximum marginal rate is concerned, he submitted that…

DCIT, NEW DELHI vs. M/S. DELOITTE TOUCHE TOHMASTU, GURGAON

ITA 530/DEL/2016[2011-12]Status: DisposedITAT Delhi11 Apr 2022AY 2011-12

Bench: Sh. R. K. Panda & Sh. Anubhav Sharmaita No.6703/Del/2015, A.Y. 2008-09 Ita No.5760/Del/2015, A.Y. 2009-10 Ita No.5759/Del/2015, A.Y. 2010-11 Ita No.530/Del/2016, A.Y. 2011-12

…mon purpose. . . and stipulate that their contributions, so far as not required for that purpose, shall be repaid to them. I cannot conceive why they should be regarded as traders, or why contributions returned to them should be regarded as profits.” 1 (1997) 5 SCC 394 2 (2013) 5 SCC 509 3 (1889) 2 TC 460 The proposition of law is restated in Bankipur Club (supra) and Bangalore Club (supra) by placing reliance upon the following extract from Simon’s Taxes4: “… it is settled law that if the persons carrying on a trade do so in such a way that they and the customers are the same persons, no profits or gains are yie…

DCIT (INTERNATIONAL TAXATION), NEW DELHI vs. M/S DELOITTE TOUCHE TOHMASTU, GURGAON

ITA 6703/DEL/2015[2008-09]Status: DisposedITAT Delhi11 Apr 2022AY 2008-09

Bench: Sh. R. K. Panda & Sh. Anubhav Sharmaita No.6703/Del/2015, A.Y. 2008-09 Ita No.5760/Del/2015, A.Y. 2009-10 Ita No.5759/Del/2015, A.Y. 2010-11 Ita No.530/Del/2016, A.Y. 2011-12

…mon purpose. . . and stipulate that their contributions, so far as not required for that purpose, shall be repaid to them. I cannot conceive why they should be regarded as traders, or why contributions returned to them should be regarded as profits.” 1 (1997) 5 SCC 394 2 (2013) 5 SCC 509 3 (1889) 2 TC 460 The proposition of law is restated in Bankipur Club (supra) and Bangalore Club (supra) by placing reliance upon the following extract from Simon’s Taxes4: “… it is settled law that if the persons carrying on a trade do so in such a way that they and the customers are the same persons, no profits or gains are yie…

DCIT, INTL. TAXATION, NEW DELHI vs. DELOITTE TOUCHE TOHMASTU, GURGAON

ITA 5760/DEL/2015[2009-10]Status: DisposedITAT Delhi11 Apr 2022AY 2009-10

Bench: Sh. R. K. Panda & Sh. Anubhav Sharmaita No.6703/Del/2015, A.Y. 2008-09 Ita No.5760/Del/2015, A.Y. 2009-10 Ita No.5759/Del/2015, A.Y. 2010-11 Ita No.530/Del/2016, A.Y. 2011-12

…mon purpose. . . and stipulate that their contributions, so far as not required for that purpose, shall be repaid to them. I cannot conceive why they should be regarded as traders, or why contributions returned to them should be regarded as profits.” 1 (1997) 5 SCC 394 2 (2013) 5 SCC 509 3 (1889) 2 TC 460 The proposition of law is restated in Bankipur Club (supra) and Bangalore Club (supra) by placing reliance upon the following extract from Simon’s Taxes4: “… it is settled law that if the persons carrying on a trade do so in such a way that they and the customers are the same persons, no profits or gains are yie…

DCIT, INTL. TAXATION, NEW DELHI vs. DELOITTE TOUCHE TOHMASTU, GURGAON

ITA 5759/DEL/2015[2010-11]Status: DisposedITAT Delhi11 Apr 2022AY 2010-11

Bench: Sh. R. K. Panda & Sh. Anubhav Sharmaita No.6703/Del/2015, A.Y. 2008-09 Ita No.5760/Del/2015, A.Y. 2009-10 Ita No.5759/Del/2015, A.Y. 2010-11 Ita No.530/Del/2016, A.Y. 2011-12

…mon purpose. . . and stipulate that their contributions, so far as not required for that purpose, shall be repaid to them. I cannot conceive why they should be regarded as traders, or why contributions returned to them should be regarded as profits.” 1 (1997) 5 SCC 394 2 (2013) 5 SCC 509 3 (1889) 2 TC 460 The proposition of law is restated in Bankipur Club (supra) and Bangalore Club (supra) by placing reliance upon the following extract from Simon’s Taxes4: “… it is settled law that if the persons carrying on a trade do so in such a way that they and the customers are the same persons, no profits or gains are yie…

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