2014 (3) TMI 614

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....on issues arising out of identical set of facts and circumstances, therefore, as a matter of convenience, these appeals were heard together and are being disposed of by way of this consolidated order. However, in order to understand the implication, it would be necessary to take note of the facts of one appeal. We are, accordingly, narrating the facts, as they appear in the appeal in ITA no. 7505/Mum./2011, for assessment year 2006-07. The grounds raised by the assessee for the assessment year 2006-07 read as under:- 1.1 The learned CIT(A) erred in confirming the interest earned on F.D. of Rs.  12,29,584 on the premise that the principle of mutuality is not satisfied in the appellant's case. 1.2 The learned CIT(A) erred in rejecting ....

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....h the A/R of the appellant. In this case, the A.O. treated interest income as taxable u/s 56 of the I.T. Act under the head Income from other sources which was claimed by the appellant as non taxable income is also governed by the principles of mutuality since the surplus fund of the Gymkhana is kept with Bank and Govt. companies as matter of precaution and not in the primary object of earning interest and hence not tainted with commerciality. The appellant has also relied upon several laws as above. However, I do not agree with the contention of the appellant. The identical issue had come up before my Ld. Predecessor who vide his order No.CIT(A)-30/ACIT-19(1)/IT-53/09-10 dated 26.11.2009 in appellant's own case for A.Y. 2005-2006, afte....

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....icer as well as the learned Commissioner (Appeals) and the decision of the Hon'ble Supreme Court in Bangalore Club (supra), we find that the issue of interest from bank in the case of Club governed by the "principles of mutuality" stands squarely covered by decision of the Hon'ble Supreme Court, wherein it was held that the amount of interest earned by the club from the bank will not fall within the ambit of "principles of mutuality" and will, therefore, be exigible to the tax in the hands of the club. Thus, respectfully following the law reiterated by the Hon'ble Supreme Court, we do not find any merit in the grounds raised by the assessee in both the years under appeal. Accordingly, the grounds raised by the assessee in both t....