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2010 (7) TMI 83 - DELHI HIGH COURTPrincipal of mutuality – cooperative society - Assessing officer held that the difference between the sale price and the construction price is to be treated as income as short term capital gains of the assessee for the assessment year 2001-2002. The amount spent on purchase of dustbins for the garden maintenance was treated as capital nature and assessed as the same. As far as the receipt of interest is concerned, the assessing officer came to hold that for the relevant assessment year the assessee had shown interest receivable from the members and not being incorporated in account and as the assessee was following the mercantile system, it was treated as income – ITAT decided in favor of assessee - Held that: - The earlier member had paid less amount as compared to a member who joined subsequently but the same does not really affect the nature of the society or the transactions with such members and the principle of mutuality is still attracted. The character of the society, needless to say, cannot be said to have changed. - the society, to cater to the needs of the members, have constructed the shops and no outside consumers are allowed to the complex of the society. The shops were built after obtaining proper certificate from the concerned engineer - the principle of mutuality would apply to the above income. – regarding interest, once the identity of the contributor to the fund of recipients is accepted, the principle of mutuality would get attracted. – ITAT decision in favor of assessee sustained.
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