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TMI Blog2014 (8) TMI 1221X X X X Extracts X X X X X X X X Extracts X X X X ..... Mutual Benefit Trust situated at various places in Tamil Nadu against various orders of the Commissioner of Income Tax (Appeals)- VI, Chennai passed for various assessment years. Since the issue in all these appeals is common, they were heard together and disposed off by this common order for the sake of convenience. The only issue in all these appeals of the Revenue is that whether 95% of surplus of the assessee trust distributed among its members can be brought to tax at maximum marginal rate in the hands of the assessee treating the assessees as AOPs. 2. At the time of hearing, counsel for the assessee submits that the issue in appeals is squarely covered by the decision of the co-ordinate Bench of this Tribunal in ITA Nos.1100 to 1104 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g around ten to fifteen and they undertake a particular programme of generating income for the benefit of the members of that SHG. The assessee trust SMBT is leading and managing about ten to twenty SHGs in their activities. The assessees SMBT, around twenty to thirty in numbers, working in Tamil Nadu, are under the common umbrella of M/s.Sarvodaya Nano Banking Finance Company Limited (SNBFCL for short). SNBFCL is approved by the Reserve Bank of India for carrying out the activities of micro financing. SNBFCL obtains loans from statutory corporations like SIDBI and nationalized banks. SNBFCL obtains loans from the above stated sources and distributes to different SMBTs, like the assessees. The assessee SMBTs, in turn, lend the money to diff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted to landless poor villagers. But, the villagers were not in a position to raise resources to carry on agricultural and other related activities in the land allotted to them. It created a situation that inspite of land allotted to them, the poor people were not in a position to make a livelihood out of the land. ASSEFA was formed in the above context. They made out a programme for the sustainable growth of Boodhan land allottees. On the security of the Boodhan land, ASSEFA will arrange funds from nationalized banks for distributing among the Boodhan land allottees, so that they can indulge in different activities including agricultural, for creating an environment of sustainable growth. ASSEFA is a national nodal agency engaged in the up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate with reference to individual recipients. In other words, the distribution of 95 per cent of surplus is indeterminate. Therefore, he held that 95 per cent of surplus distributed by the assessee trusts to their member SHGs has to be treated as income of the respective trusts. It is to be seen that the assessee trusts have already offered for taxation 5 per cent of the surplus retained by them. The dispute is only with reference to 95 per cent of the surplus distributed to member SHGs. Paras 10 to 16 : ................... 17. First we will consider the question of treating 95 per cent of the surplus distributed to the member SHGs, as income liable for taxation or not. 18. We have broadly stated the organizational model of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utuality. The 95 per cent surplus distributed by the assessee trusts to the various SHGs working under them is nothing but the income of those SHGs themselves. It is not something that those groups are getting from outside by way of income. It is the fruit of their efforts. After finalising the accounts and computing the surplus, the profits are divided among those members, whose shares are determinate and whose roles are well defined. Therefore, we endorse the view of the Commissioner of Income-tax (Appeals) that all these SHGs working under the assessee trusts are concerns governed by the principles of mutuality and accordingly the 95 per cent of surplus distributed among them are not in the nature of income. The Commissioner of Income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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