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2010 (5) TMI 174 - HC - Income TaxCapital receipt versus revenue receipt – receipt of donation – concept of mutuality – society - the ITAT observed that the donation of Rs. 20,50,000/- being donation and Rs. 1,46,200/- being TDS debited to P&L Account, as capital receipts not liable for tax – Held that: - The doctrine of mutuality has been applied to the assessee Society on the ground that no one can make a profit out of himself. It has been found as a fact that when a number of persons combine together and contribute to a common fund for an object and in that regard they do not have any dealings or relations with anybody outside the body then any surplus remaining to such a body is not to be regarded as a profit. Accordingly, if the participators to the fund are also the contributors and such an identity is established then the test of mutuality is fulfilled - The school is being run by the Society for the children of its members and any surplus remaining of the school attract the principle of mutuality. Any dealing done by the assessee Society or by the school with the non-members would not attract the principle of mutuality - Once the Assessing Officer has excluded Rs. 15,00,000/- received from Punjab Government on account of infrastructure fund donation then it follows that donations received by the assessee Society for development account from other have to be regarded as ‘capital receipt’. Accordingly, the orders passed by the CIT (A) and the Tribunal are not open to challenge
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