Mutual Concern - complete identity between contributors and participators necessary. ::

Court :
HC

Brief :
Held by the Hon"ble court that the real contributors of income by availing the facilities of the marriage hall were not the members but non-members made temporary members for the purpose of renting the hall.Hence, the principle of mutuality would not apply and the rental income received from non-members was taxable.

Citation :
C.I.T. Vs. M/s Trivandrum Club

Mutual Concern - complete identity between contributors and participators necessary. C.I.T. Vs. M/s Trivandrum Club 2/27/2006 (2006) 282 ITR 505 (Ker) Case Fact: Whether the surplus arising in a mutual concern by renting the property (marriage hall) of the concern to non-members making them temporary members only for renting the marriage hall be regarded as a profit? Decision: Held by the Hon"ble court that the real contributors of income by availing the facilities of the marriage hall were not the members but non-members made temporary members for the purpose of renting the hall.Hence, the principle of mutuality would not apply and the rental income received from non-members was taxable.

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Judgement posted by

CA.Saibaburao Nanduri

Chartered Accountant

I am a commerce graduarte of Andhra University. Studied at HINDU COLLEGE, Guntur. Became FCA and started Practice under the name and style of M/s SAIBABU RAO CO I became Chairman of CA Institute, Guntur Branch, during the year 2008-09 My post qualifications are: Information Systems Audit DISA (ICAI) ... Read more

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