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2012 (9) TMI 472 - AT - Income TaxAddition on account of membership subscription from its members by society – Held that:- As the assessee meets all the three conditions which are that the assessee is a registered society, the members of which has come together for fulfillment of a common cause, secondly the appellant exists for the benefit of members only and thirdly there is prohibition on distribution of profit to any past or current members and on winding up, the surplus remains the properly of its members. Therefore assessee’s society is covered by the doctrine of mutuality and this amount was not taxable in view of judgment by Bombay High Court in case of Willingdon Sports Club (2008 (3) TMI 134). Decided in favour of Assessee. Addition on account of Grant received from Govt. of India – Capital Grant which is 50% of cost of project, received by society towards cost of setting up integrated waste management facility for all the members – Held that:- In the case of mutual concern, income received from the members is exempt and the income received from nonmembers is taxable. The amount is a capital receipt and is not liable to tax. Taxability depends upon whether it was received from members or nonmembers is not correct because as per the provisions of Income tax charging of tax comes into picture only when the nature of receipt is revenue and no capital receipts are taxed. Decision in favour of assessee. Addition on account of interest income – Assessee had claimed that it is following cash system of accounting - Booked income as and when it is received - Held that - In view of existence of concept of mutuality and in view of various judicial pronouncements relied upon by assessee, the interest income whether booked on cash basis or on receipt basis is exempt in the case of assessee is a society. Decision in favour of assessee.
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