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TMI Blog2015 (1) TMI 1474X X X X Extracts X X X X X X X X Extracts X X X X ..... ality. 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 accordingly the 95 per cent of surplus distributed among them are not in the nature of income. - ITA Nos. 2577/Mds/14, 2578/Mds/14, 2579/Mds/14, 2580/Mds/14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o-ordinate Bench vide order dated 27.8.2014 dismissed the appeals of the Revenue. The ld. Authorised Representative placed on record a copy of the common order in appeal Nos. 1288 to 1322/Mds/14 dated 27.8.2014. 5. Shri A.V.Sreekanth, representing the Department, admitted the fact that similar issue had come up for consideration before the co-ordinate Bench of the Tribunal in the aforesaid appeals of the Revenue. However, the ld. DR vehemently defended the assessment orders and reiterated the grounds raised by the Revenue in the grounds of appeals. 6. Both sides heard. We have perused the orders of the authorities below as well as the decision of the co-ordinate Bench on which the ld. AR has placed reliance. We find that the issue rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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 differential method generates surplus income in the hands of SMBTs like the assessees in the present appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ronment 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 nonprofit organization. 6. It is under the overall guidance and policy formulation of ASSEFA that field organizations like SNBFCL, the assesseetrusts and individual SHGs are working. SHGs are working at grassroot level in villages. The assessee-trusts arrange finance to these grassroot level SHGs by availing funds from SNBFCL. As already stated, SNBFCL arranges the finance from statutory institutions and nationalized banks. 7. The issues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot. 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 and paid off. The assessee trusts are returning back 95 per cent of the surplus to the various SHGs working und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ong 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. Since, the issue raised in present set of appeals is similar to the one already adjudicated by the co-ordinate Bench, we find no reason to take a different view. Respectfully following the same, the present set of appeals by the Revenue are dismissed for aforesaid reasons. In the result, all the five appeals of the Revenue are dismissed. Order pronounced on Wednesday, the 21st of January, 2015 at Chennai. - - TaxTMI - TMITax - Income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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