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2022 (2) TMI 161 - AT - Income TaxAssessment of trust - Mutuality of interest - surplus distributed among the members - whether 95% of surplus of the assessee trust distributed among its members can be brought to tax at maximum marginal rate in the hands of the assessee treating the assessee as AOPs? - HELD THAT:- As decided in own case [2014 (8) TMI 1221 - ITAT CHENNAI] relying on [2013 (11) TMI 1270 - ITAT CHENNAI] upheld the order of CIT (A) in holding that 95% of surplus distributed among the members is not liable to be taxed. The share of every beneficiary is quantified. Therefore, we find that the Commissioner of Income-tax(Appeals) is justified in coming to the conclusion that the assessee trusts and the SHGs are inter-related and they are all concerns governed by the principles of mutuality. The 95 per cent surplus distributed by the assessee trusts to the various SHGs working under them is nothing but the income of those SHGs themselves. It is not something that those groups are getting from outside by way of income. It is the fruit of their efforts. After finalising the accounts and computing the surplus, the profits are divided among those members, whose shares are determinate and whose roles are well defined. We endorse the view of the CIT (Appeals) that all these SHGs working under the assessee trusts are concerns governed by the principles of mutuality and accordingly the 95 per cent of surplus distributed among them are not in the nature of income - grounds raised by the Revenue on this point are rejected. TDS u/s.194A on the interest payment made by the assessee's trust - HELD THAT:- As in assessee's own case in earlier years [2013 (11) TMI 1270 - ITAT CHENNAI] wherein the Tribunal exactly on same facts held that no disallowance can be made u/s. 40(a)(ia) of the Act, as there is no need for deducting TDS u/s. 194A of the Act.
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