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2012 (12) TMI 499 - HC - Income TaxTaxability of interest on FD received from bank - concept of mutuality - Reassessment u/s 147 - held that:- A perusal of section 2(24) shows that the Act recognizes the principle of mutuality and has excluded all businesses involving such principle from the purview of the Act, except those mentioned in clause (vii) of that section. In the instant case, the contributors, namely, the members of the assessee made contributions, which have been kept in fixed deposit with third party banks and those third party banks have contributed to the members fund by way of interest and, accordingly, the members fund have been expanded not by the contributors/members, but by a third party. If that is the situation, as held by the Hon’ble Supreme Court in Chelmsford Club versus Commissioner of Income-Tax, ((2000) Vol. 243 ITR 89), as pointed out by it in the case of Royal Western India Turf Club Limited ((1953) 24 ITR 551), the income cannot be said to have been derived from any activity based on principle of mutuality. - Decided in favor of revenue.
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