Principle of Mutuality/Mutual Concerns

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..... monies for achieving that object and divide the surplus amongst themselves. The objective should not be profit. The objective should be social security, entertainment, professional development, etc. If, instead of one person, more than one person combines themselves into a distinct and separate legal entity for rendering services to themselves by only charging themselves, the resulting surpl .....

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..... ncome from trading so far as it is confined to own members is also exempt. Where a mutual concern derives income from an activity with an outsider, then tax exemption will not apply to such income, i.e., income received from non-members is taxable. Even a company assessee can claim exemption on the basis of mutuality principal where its memorandum and articles of association provide that the fu .....

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..... fessional or similar association, then the income derived from specific services performed for its members is taxable as Profits Gains of Business or Profession under section 28 . However, if mutual concern is a resident welfare association, sports club, etc. then income derived from specific services performed for its members is not taxable. Income received from non-members. - M .....

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