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2008 (4) TMI 475 - HC - Income TaxPrinciple of mutuality - addition of Rs. 2,55,182 - exemption in respect of interest income of Rs.2,55,182 and Rs.2,06,090 on bank deposits and FDRs - The Assessing Officer had observed that interest from the Banks and excess of receipts over the expenditure being interest was not income arising out of mutual activities/arrangements among the members of the club. - Held that: - The principle of mutuality could be applied only if the interest was earned for advances/facilities of loan given to the members of the club. The assessee had claimed exemption in respect of interest income where source of receipt was Bank and not the members of the club. In Chelmsford Club v. CIT (2000 -TMI - 5787 - SUPREME Court), the Apex Court held that there must be complete identity between the contributors and the participators. - It is not a case where the benefit of the interest income derived by the assessee is extended to its members. - Decided in favor of revenue
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