Dismissing the appeal of the revenue the Court held that , promotion of sports, games and providing recreation facilities to the public at large and to the members in particular and therefore receipts on account of compensation from decorator against gymkhana function, miscellaneous income and compensation from caterer (restaurant) cannot be construed as activities in the nature of trade, commerce or business for the purpose of the proviso to S. 2(15) of the Act. Followed CIT v .Bombay Presidency Golf Club Ltd ITA No.235 of 2017. dt. 2-04 2019 (Bom) (HC) , DIT ( E) v Shri Vile Parle Kelavani Mandal, (2015) 378 ITR 593 (Bom) (HC) DIT ( E ) , DIT (E) v. Shree Nashik Panchvati Panjrapole, (2017) 397 ITR 501 (Bom) (HC) ,Add.CIT v . Surat Art Silk Cloth Manufacturers Association, (1980) 121 ITR 1 (SC). As regards capital expenditure is allowed as application of income and also entitle to depreciation. The appeal of the revenue is dismissed following the judgements in CIT v . Rajasthan and Gujrat Charitable Foundation, Poona, (2018 ) 402 ITR 441 (SC) (ITA No.4468/Mum/2013 dt 30 -11-2016) (ITA No 1767 of 2017 dt 22-01 -2020 ) ( AY.2009 -10)
CIT ( E ) v. Matunga Gymkhana (2020) 189 DTR 392/ 314 CTR 818( Bom) (HC)
S. 11 : Property held for charitable purposes – Income applied for the object of the Trust -Promotion of sports, games and providing recreation facilities to the public at large and to the members in particular and therefore receipts on account of compensation from decorator against gymkhana function, miscellaneous income and compensation from caterer (restaurant) cannot be construed as activities in the nature of trade, commerce or business for the purpose of the proviso to S. 2(15) of the Act- Capital expenditure allowed as application of income – Depreciation is allowable [ S.2(15), 12 , 13, 32 ]