2013 (3) TMI 695 - AT - Income Tax

Summary

Issues involved: Appeal against CIT(A) order regarding addition of amount received from members and invested in Mutual Funds, claiming exemption under principle of mutuality for an association of Air Cargo Agents.

Summary:

Issue 1: Addition of amount received from members and invested in Mutual Funds
- The association received subscription from members for welfare activities, invested surplus in shares/mutual funds not related to its main object.
- AO contended contributions not covered by mutuality principles, hence taxable.
- Assessee argued contributions for members' benefit, covered by mutuality principles.
- CIT(A) accepted assessee's contention based on past assessments and Bombay High Court decision.
- Revenue appealed citing Bangalore Club case, claiming funds deposited in banks violated mutuality principles.
- Assessee distinguished case, emphasized funds used for members' benefit only.
- Tribunal upheld CIT(A) decision, citing Bombay High Court precedent supporting mutuality in such cases.

Conclusion: Revenue's appeal dismissed, CIT(A) order upheld based on mutuality principles and past assessments.