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2018 (4) TMI 77 - AT - Income TaxApplicability of the principles of mutuality - registered society for the benefit of its members - receipt from the non- Member - Held that:- One of the primary conditions for the applicability of the principles of mutuality, is that no person can make a profit from himself, the participants must be Members, once the funds of the society are given for the business purposes of a non-Member and the assessee receives any compensation either in the form of profits or in the form of interest from such non-Member, the principles of mutuality cannot be applied to that receipt from the non- Member. This being so, we are of the view that the findings of the Ld.CIT(A) on this issue are on right footing and does not call for any interference. Depreciation claim to assessee society - Held that:- It is an undisputed fact that the properties of the assessee are used for carrying out the activities of the society as directed by the Hon’ble High Court. Once the properties of the society are used for the purpose of activities of the assessee, the same would have to be treated as being used in the business of the assessee. If this is so, the income under the head business in the hands of the assessee, would have to be considered and depreciation liable to be allowed. Admittedly, if depreciation is allowed and the income of the assessee becomes negative or loss, the same is available for set off against the income from the other heads representing income from other sources. This being so, the findings of the Ld.CIT(A) in respect of the non-granting of the depreciation is allowed and the AO is directed to grant the assessee the benefit of depreciation as claimed.
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