9911796707
TMI Blog2012 (4) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... e case as per SOF filed by the assessee, are that the Appellant Association is a mutual organization registered under the Maharashtra Co-op. Housing Society Act, 1960, affiliated to the Mumbai District Co-op. Housing Federation Ltd., formed for the benefit of the members. The Appellant Association has collected life membership contribution from its members for creating the infrastructure such as acquiring fixed assets by way of constructing building, acquiring club equipment and other facilities for the exclusive use of the members. As per approved bye laws of the Association, the fund collected as aforesaid may be kept in banks as short term investments in form of FDRs etc. until used for the specified purposes. During the previous year re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harashtra Co-op. Housing Societies Act, 1960, affiliated to the Mumbai District Co-op. Housing Federation Ltd. The Association collects life membership contribution for creating the infrastructure such as acquiring specified assets in form of constructing building, acquiring club equipments and other facilities. As per approved by-laws of the Association, the fund so collected may be kept in banks till such time it is used for the specified purpose in form of short term investment in fixed deposits. The bank interest so earned on deposit is again being used for meeting the regular expenses such as salary to the employees and other regular administrative and legal expenses. According to the AO, the assessee being a Co-op. Society, the gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Club Ltd. reported in 226 ITR 97 in which it was held that so long the income is from an activity not connected with commerciality, the concept of mutuality will apply provided there is identity of interest as between the contributors and the beneficiaries. Besides, the above, assessee has also relied on the decision of Patna High Court in the case of CIT v/s. Ranchi Club Ltd. reported in 196 ITR 137 in which it was held that merely because the assessee company had entered into transactions with non-members and earned profit out of the transaction held with them, its right to claim exemption on the principle of mutuality in respect of transaction held by it with its members was not lost. He has further relied on the decision of Hon ble Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f mutuality is applicable to the assessee even though it is an incorporated company . The AR pointed out that in this case itself, the Hon ble Co-ordinate Bench had relied on the case of Bombay Gymkhana Ltd. in ITA No.7674/Mum/2007, dated 20-04-2009, wherein it was held that interest earned by the mutual association from banks, bonds, etc. on the surplus funds is not liable to tax. The Hon ble ITAT in that case, also relied on the decisions of Hon ble Delhi High Court in DIT (Exemption) v/s. Oriental Bank of Commerce Welfare Society reported in (2003) 130 Taxman 575 and the case of Karnataka High Court in the case of Canara Bank Jubilee Staff Welfare Fund v/s. DCIT, reported in (2008) 222 CTR 286 and allowed the assessee s appeal. The AR th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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