Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (5) TMI 114 - AT - Income TaxDenial of exemption being an income of mutual concern - Principle of mutuality - Income from the transaction of non members is outside the purview of the mutuality - Taxability of Bank interest Interest and Interest u/s 234D of the Act - Interest received from FD with the bank does not cover in Mutuality, hence taxable under the head income from other sources - Held that:- On a perusal of the orders of the authorities below as well as the material available on record, we find that this issue has been discussed in detail in assessee’s own case [2012 (11) TMI 948 - ITAT MUMBAI] in the order for the assessment year 1996-97, vide order dated 26th September 2012. This decision has been followed in the subsequent years also upto the assessment year 2006-07. Thus, respectfully following the earlier year’s precedence we hold that the income of the assessee in relation to the transactions entered with the members are covered by the “Principles of Mutuality” and, hence, the same is exempt from taxation and only the income from the transaction of non-members is outside the purview of “Principles of Mutuality”. Accordingly, all the grounds raised by the Department stand dismissed. Respectfully following the earlier year’s order [2012 (11) TMI 948 - ITAT MUMBAI] of the Tribunal, we do not find any reason to deviate from such findings and the grounds no.1 and 2 of the cross objection stand dismissed. In ground no.9, the assessee has challenged that the interest income comprising of bank interest and interest on income tax refund received by the assessee is also covered by the “Principles of Mutuality”.As admitted by both the parties, this issue also stands decided against the assessee in view of the judgment of the Hon'ble Jurisdictional High Court in CIT v/s Common Effluent Treatment Plant, (Thane-Belapur) Association, [2010 (6) TMI 52 - BOMBAY HIGH COURT ], wherein it has been held that interest received from F.D. with the bank does not possess the same character of “Mutuality” and the interest income would, therefore, be taxable under the head “Income From Other Sources”. In the latest judgment, the Hon'ble Supreme Court in Bangalore Club [2013 (1) TMI 343 - SUPREME COURT], had settled this issue and held that the amount of interest earned by the assessee on the deposits made in the bank will not fall within the ambit of “Principles of Mutuality” and is exigible to tax in the hands of the assessee. Thus, in view of the law settled by the Hon'ble Supreme Court, ground no.9 raised by the assessee stands dismissed. - In the net, Revenue’s appeal and assessee’s cross objection are dismissed.
|