Supreme Court Rules Transactions Non-Mutual, Taxable Under Andhra Pradesh Advocates' Welfare Fund Act.

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....The assessee argued that the case was selected for limited scrutiny, limiting it to verifying deductions u/s 57. However, the interconnected nature of deductions and the principle of mutuality necessitated examining the mutuality issue, as it directly impacts deduction evaluation. The statutory provision allowing benefits only to members while extracting contributions from non-members violated the mutuality principle. The Supreme Court ruled that any breach of identity between contributors and beneficiaries transforms transactions into commercial ones, subjecting surplus to taxation. The Andhra Pradesh Advocates' Welfare Fund Act inherently breached mutuality by creating two classes of contributors: members and non-members, with differentia.........