The Assessee club has different class of members viz., stand members who have voting rights and participate in the management of the club and club members who basically don’t have right to vote and can only utilize the resources of the club on non-racing days. The club collects entrance fee from all class/category of members. The Lower authorities brought to tax this entrance fee collected from non-voting members since it doesn’t fall under the web of mutuality. The CIT(A) relied on the decision of the Supreme court in the case of Citizen co-operative society (397 ITR 0001) to say that the privilege of principles of mutuality applies only to members who have voting rights and have substantial decision making power. The Hon’ble ITAT on perusing the by-laws & Articles of Association of the Assessee club held that there is no restriction imposed on non-voting members or stand members for usage of the club resources except on racing days where subsidized foods etc., It was also held that when the by-laws permit such usage of club irrespective of the class of members, the Assessee club was right in treating the entrance fee as capital in nature as falling under the web of principles of mutuality.