TMI Blog1985 (1) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... mination of service and to the legal heirs of a member on his death. The membership required the admission fee of Rs. 1 and monthly subscription varying from Rs. 1 to Rs. 5. Whatever was the subscription of a member, was credited in a separate account in the books of the trust. A member was entitled to take loan from the trust upto 90per cent of the credit to his account on payment of nominal interest of 6 per cent per year. Whatever were the surplus funds of the trust, after giving loans to the members were put in a bank account, which earned interest. At the time of retirement, termination of service of death of a member, the amount credited to his account was refunded to the member or his legal representative and in addition the member o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the trust deed, which mention that the corpus of the trust will include gifts or forfeited amount also, which, by resolution, could be spent for other purposes as well. Reference was also mad by him to the ruling of the Hon'ble High Court of Gujarat in the case of CIT vs. Shri Jari Merchants Association (1977) 106 ITR 542 (Guj) where their Lordship of the Hon'ble High Court of Gujarat held that since the identity of the member, who made the contribution and the recipients, was not the same and, by a resolution, the surplus assets could be used at the time of its dissolution in the manner proposed in the resolution passed by the association, this was not a case of a mutual concern and was not entitled to exemption. Summing up, Shri Srivas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avy Club (1974) 96 ITR 261 (AP) and the rulings of the Hon'ble High Court of Madras in the case of CIT vs. Madras Race Club 1976 CTR (Mad) 377 : (1976) 105 ITR 433 (Mad) and the Presidency Club Ltd. vs. CIT (1980) 19 CTR (Mad) 216 : (1981) 126 ITR 264 (Mad) wherein their Lordships laid down that where a number of persons come together to form a club or an Association of Persons with a view to mutual help, the income arising from such activity was not liable to taxes. It was also pointed out by Shri Patil that, as mentioned by the AAC in his order, in the case of Brihad Bambai Municipal Hindi Shikshak Kosh for the asst. yrs. 1977-78 and 1978-79 where the facts were identical and the same issue cropped up, the AAC held that the income was not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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