1993 (11) TMI 20

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..... r section 256(1) of the Income-tax Act, 1961, for our opinion : "Whether, on the facts and in the circumstances of the case, the interest received by the assessee in each of the two assessment years 1975-76 and 1976-77 on deposits made by it with the banks was taxable as its income under section 56 of the Income-tax Act, 1961, and whether only expenditure laid out or expended wholly and exclusive .....

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..... case of Sports Club of Gujarat Ltd. v. CIT[1988] 171 ITR 504. While dealing with similar facts and after considering various,contentions raised by the parties, the court has held that the assessee's income from interest was not from a mutual activity and as such it was exigible to tax. The relevant observations are as under : "We now revert to the question whether the income derived by way of in .....

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..... termined by them. Under this clause, the investment need not be confined to investment by way of fixed deposits with banks. It can take any other form or shape, such as investment in shares, real estate, etc. When income is derived from such investment, whether by way of interest, dividend or rent, it is derived from a third party and is not by way of contribution from the members of the club. We .....

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