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TMI Blog2014 (8) TMI 1221X X X X Extracts X X X X X X X X Extracts X X X X ..... is justified in coming to the conclusion that the assessee trusts and the SHGs are inter-related and they are all concerns governed by the principles of mutuality. The 95 per cent surplus distributed by the assessee trusts to the various SHGs working under them is nothing but the income of those SHGs themselves. It is not something that those groups are getting from outside by way of income. It is the fruit of their efforts. After finalising the accounts and computing the surplus, the profits are divided among those members, whose shares are determinate and whose roles are well defined. We endorse the view of the CIT (Appeals) that all these SHGs working under the assessee trusts are concerns governed by the principles of mutuality and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he time of hearing, counsel for the assessee submits that the issue in appeals is squarely covered by the decision of the co-ordinate Bench of this Tribunal in ITA Nos.1100 to 1104 1098/Mds/2012 dated 5.02.2013. Placing reliance on the order of the co-ordinate Bench, the counsel submits that this Tribunal dismissed the appeals of the Revenue confirming the order of the Commissioner of Income Tax (Appeals) in holding that 95% of the surplus of the assessee trusts distributed among its self-help group members cannot be brought to tax. 3. Departmental Representative vehemently supports the order of the Assessing Officer in treating the assessees as AOPs and bringing to tax the surplus distributed by the assessee trust among its members i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DBI and nationalized banks. SNBFCL obtains loans from the above stated sources and distributes to different SMBTs, like the assessees. The assessee SMBTs, in turn, lend the money to different SHGs under them. SNBFCL is charging interest at the rate of 12 per cent on the net balance method for the amount advanced by it to different SMBTs, like the assessees. SMBTs like the assessees, in turn, advance these loans to their SHGs at a flat rate of 12 per cent. At the last point of SHGs, it is for the group to decide the interest rate chargeable on the individual members of that SHG. The assessee SMBTs are getting funds from SNBFCL at 12 per cent rate on net balance, whereas they are advancing amounts to SGHs at a flat rate of 12 per cent. This d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd allottees, so that they can indulge in different activities including agricultural, for creating an environment of sustainable growth. ASSEFA is a national nodal agency engaged in the upliftment of rural people through programmes designed for sustainable development. In that way, the national apex body ASSF is a charitable institution by the nature of the work carried on by it. Needless to say, it is a non- profit organization. 6. It is under the overall guidance and policy formulation of ASSEFA that field organizations like SNBFCL, the assessee-trusts and individual SHGs are working. SHGs are working at grassroot level in villages. The assesseetrusts arrange finance to these grassroot level SHGs by availing funds from SNBFCL. As alre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion of treating 95 per cent of the surplus distributed to the member SHGs, as income liable for taxation or not. 18. We have broadly stated the organizational model of the assessee trusts working under the guidance of a national apex NGO. On the grassroots level, SHGs are working, for whom the assessee trusts are arranging funds availed from the umbrella organization SNBFCL. Every SHG contains ten to fifteen members. The details of every member belonging to a SHG are available on record. The details of loans availed by the various SHGs are properly recorded and further distribution of funds by SHGs to their individual members are also properly documented. It is on the basis of these documentations and details that interest is computed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts are concerns governed by the principles of mutuality and accordingly the 95 per cent of surplus distributed among them are not in the nature of income. The Commissioner of Income-tax(Appeals) has rightly held that 95 per cent of the surplus distributed by the assessee trusts cannot be brought to tax. His orders on this point are confirmed and the grounds raised by the Revenue on this point are rejected. 5. Respectfully following the above order of this Tribunal, we uphold the orders of the Commissioner of Income Tax (Appeals) in the present appeals and dismiss the grounds raised by the Revenue. 6. In the result, all the appeals of the Revenue are dismissed. Order pronounced in the open court on Wednesday, the 27th day of August ..... X X X X Extracts X X X X X X X X Extracts X X X X
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