2016 (4) TMI 743

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....nsel for the Revenue urges the following question for our consideration: " Whether on the facts and in the circumstances of the case and in law the Tribunal was justified in applying the doctrine of mutuality to delete the addition of Rs. 54,07,484/made by the Assessing Officer on the Assessee?" 3. The respondent-assessee is an association of Air Cargo Agents in India. During the subject assessment year 200708 it received subscription/contribution from its members in three forms i.e. annual subscription, member's annual convention and member's training programmes aggregating to contribution from the members of Rs. 54.07 lakhs. In its Return of Income the assessee offered an amount of Rs. 12.06 lakhs as its Income. However, the....

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....income over expenditure is invested in fixed deposits. Thus the contribution by members of the association would not result in the contributions being exigible to tax. Thus, the addition made by the Assessing Officer of Rs. 54.07 lakhs in respect of contribution from members was deleted. 5. Being aggrieved, the Revenue carried the issue in appeal to the Tribunal. The Tribunal by the impugned order held that the contribution received by the members were utilized for the benefit of its contributors. The Tribunal held that the decision of this Court in Common Effluent Treatment Plant (Thane-Belapur) (supra) is applicable to the present facts wherein the Court had taken a view that depositing of its excess funds with the banks or financial i....

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....s and there must be no scope of profiteering by the contributors from a fund. These tests have in fact been reiterated in Bangalore Club case (supra). However, the facts therein are completely distinguishable. Amongst the members of the Bangalore Club were certain banks. The Bangalore Club have invested its excess funds in member banks as well as non member banks in form of fixed deposits and earned interest thereon. The assessee thereon paid tax on the interest earned on fixed deposit with non member banks. However, so far as interest earned from member banks was concerned, the assessee therein sought to apply the doctrine of mutuality to contend that the interest on the fixed deposit received from the member banks would not be assessable ....