1989 (5) TMI 151

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....peals preferred against the finding of the C.I.T.(A) that the assessee is a mutual fund not liable to the levy of income-tax in the assessment years 1980-81, 1981-82 and 1982-83. Shri M. Narayanan, Departmental Representative, appeared for the department and Shri K. Srinivasan & Shri Quadir Hoseyen, Advocates for the assessee. 2. The assessee claimed before the Assessing Officer that the busine....

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....epartmental Representative, submitted that the principle of mutuality was not satisfied in this case inasmuch as dividend was paid to shareholders who did not have any transaction during the previous year relevant to the assessment years. There was no complete identity between the contributors and the participants in the common fund. Shri K. Srinivasan, Advocate, on the other hand, argued that the....

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....eholders did not get dividends under Art. 63. This case satisfies the test of mutuality laid down by the Supreme Court in the case of CIT v. Kumbakonam Mutual Benefit Fund Ltd. [1964] 53 ITR 241. If all shareholders were to participate in the dividends irrespective of their having transactions with the Nidhi or not, then as explained by the Supreme Court, the position of the Nidhi would not have b....