TMI Blog2012 (12) TMI 499X X X X Extracts X X X X X X X X Extracts X X X X ..... d not by the contributors/members, but by a third party. If that is the situation, as held by the Hon’ble Supreme Court in Chelmsford Club versus Commissioner of Income-Tax, ((2000) Vol. 243 ITR 89), as pointed out by it in the case of Royal Western India Turf Club Limited ((1953) 24 ITR 551), the income cannot be said to have been derived from any activity based on principle of mutuality. - Decided in favor of revenue. - Income Tax Appeal No. 155 of 2007 - - - Dated:- 3-12-2012 - Barin Ghosh And U.C. Dhyani, JJ. Appellant Rep. by : Mr. Hari Mohan Bhatia, Adv JUDGEMENT Per : Barin Ghosh, CJ : Initially, the assessee was represented by Sri S.K. Posti, Advocate. Sri S.K. Posti withdrew from the case. Accordingly, an ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in respect of such income during the Assessment Years 1982-1983 and 1983-1984 the Tribunal excluded the same on the ground of mutuality and, subsequently, the Assessing Officer accepted interest income during the Assessment Years 1993-1994, 1994-1995, 1995-1996 and 1996-1997 as outside the purview of Income Tax Act in view of mutuality, and that, the Assessing Officer has not been able to bring on record any change in the situation from the said Assessment Years and the Assessment Year under consideration. 3. While in the judgment and order under appeal, the Tribunal has upheld user of power under Section 147 of the Act, it has dismissed the appeal of the Revenue in respect of taxability of interest income only on the ground that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based on the principle of mutuality has also been settled by the Hon ble Supreme Court in the said case by specifying three criteria of identification ; (1) the identity of the contributors to the fund and the recipients from the fund; (2) the treatment of the company, though incorporated as a mere entity for the convenience of the members and policy holders, in other words, as an instrument obedient to their mandate; and (3) the impossibility that contributors should derive profits from contributions made by themselves to a fund which could only be expanded or returned to themselves. 6. Therefore, in order to be an income derived from activities based on the principle of mutuality, it must be shown that the contribut ..... X X X X Extracts X X X X X X X X Extracts X X X X
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