2017 (1) TMI 104

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....dhyay, V. K. Rastogi ORDER Heard Sri Shubham Agrawal, learned Counsel for the department and Sri V.K. Rastogi, learned Counsel for the assessee. This is an Income Tax Appeal filed by the department under Section 260A of the Income Tax Act, 1961 for the assessment year 1998-99 to 2000-2001 against an order of the Tribunal dated 16.02.2005. The question of law sought to be answered is hereunder:-....

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....issue of principle of mutuality, it has to be examined as to whether such principle applies on income which is earned as interest on FDRs or dividened from the mutual funds. The principal of mutuality as explained by the Honourable Supreme Court in the judgement cited by the Ld. Counsel relates to the income arising out of the transactions with the members and between the members. If the transacti....

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....been cited by the learned counsel refers to the transactions between the members and the income arising therefrom to the club out of the transactions between the members amongst them." From the above facts it is clear that the assessee club had made investments in the mutual fund it was not an investment with the member but with an outsider or a non-member, therefore, the principle of mutuality w....