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of <h1>Court rules amounts received from members under mutuality principle not taxable, in line with precedent.</h1> <h3>Su Prabhat Co-operative Housing Society Ltd. Versus Income Tax Officer.</h3> The Court held in favor of the appellant, ruling that the principle of mutuality applies to the amounts received, including Rs. 7,44,000 from members and ... - Issues involved:The judgment involves the following Issues:1. Applicability of the principle of mutuality to amounts received by the appellant.2. Tax liability on the sum of Rs. 7,44,000/- received from members.3. Tax liability on the sum of Rs. 20,695/- received as interest.Issue 1: Applicability of the principle of mutuality:The substantial question of law was whether the appellate Tribunal was correct in determining that the principle of mutuality does not apply to the various amounts received by the appellant. The Court referred to a previous judgment of the Division Bench in Income Tax Appeal No. 931/2004, where it was held that the principle of mutuality does apply. Consequently, the Court answered this question in favor of the assessee and against the revenue.Issue 2: Tax liability on sum received from members:The second substantial question concerned the tax liability on the sum of Rs. 7,44,000/- received from the members. Following the precedent set in the aforementioned Division Bench judgment, the Court ruled in favor of the assessee, holding that this amount is not liable to be taxed as income of the appellant.Issue 3: Tax liability on interest received:The third question revolved around the tax liability on the sum of Rs. 20,695/- received as interest. Consistent with the previous decision, the Court decided in favor of the assessee, stating that this amount is not liable to be taxed as income of the appellant.The Court noted that the appellant did not press questions 4 and 5. Both parties agreed that the three questions discussed above were addressed in the Division Bench judgment. Consequently, the Court disposed of the appeal in favor of the assessee, with no order as to costs.
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