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TMI Blog2005 (5) TMI 269X X X X Extracts X X X X X X X X Extracts X X X X ..... ich a note was given that this income of the assessee is exempt from tax being eligible for exemption under s. 10(24) of the Act. 3. But, the learned AO was of the opinion that the assessee was not eligible for exemption under s. 10(24) of the Act. The truck operators are usually truck-owners, of course, few of them also employed drivers but most of them drive their truck themselves. The exemption under s. 10(24) is available only if the aim of the assessee-union was to regulate the relations between the workmen and employers, or for regulating the relations between the workmen and workmen. The truck operators are self-employed persons, who have formed their union to safeguard their interests in their business of transportation qua their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide ground No. 2, is an alternate plea that as per the principle of mutuality, the contributions made by the members to be used for their betterment, cannot be again taxed in the hands of the assessee-union. 6. I have considered the rival submissions and perused the evidence available on record. 7. It is a settled position of law that any surplus arising out of mutual activity is not liable to be taxed, as no taxable profit can be stated to arise from out of mutual activity because no man can trade with himself. It has been argued by learned Authorised Representative that in earlier year this issue also stood decided against the assessee, but facts of that year are entirely different and distinguishable, in this year, insofar as the mem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of taxable income and income/contribution from non-members or temporary members or ungenuine members shall form part of taxable income and thus, 'principle of mutuality' shall apply only to incomes received from real/permanent/genuine members of the appellant union. 9. Learned Authorised Representative further submitted that as per ratio laid down in above judgments, principle of mutuality shall not apply only to an institution but it applies to various incomes pf that institution and thus, contributions by genuine members shall be exempted as per principle of mutuality whereas contribution or income from other persons shall not be empted. This ratio is even accepted by learned AO at page No. 27 while relying on 1976 CTR (Mad) 337 : (197 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble Bench in appellant's own case. 12. In the rival submissions, learned Departmental Representative stressed upon the decision of the Bench in the appellant's own cases for asst. yrs. 1989-90 to 1995-96 and he submitted that CIT(A) and Hon'ble Bench rightly held that 'principle of mutuality' shall not be applicable to this union. 13. After considering rival submissions, the main question arises, whether principle of mutuality applies to an institution or to an institution as well as to the nature of income or to the nature of income of income? After relying on ratio laid down in all the judgments cited supra, I reached to the conclusion that 'principle of mutuality' applies to an institution as well as to the nature of incomes of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed CIT(A) erred in law in confirming the disallowance of the following various authorised, vouched and verified expenses despite the fact that there was no query, pinpointing defect and any opportunity to explain and by ignoring lawful provisions and constitution of the union itself; --------------------------------------------------- A. Charity and donations Rs. 8,200 B. Telephone expenses Rs. 4,000 C. Travelling expenses Rs. 5,100 D. Jeep expenses Rs. 17,589 E. Misc. expenses Rs. 11,100" --------------------------------------------------- 16. The learned Authorised Representative has reiterated almost similar arguments in relation to the above di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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