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3. During the course of assessment proceedings, the assessee vide letter dated 18/02/2015 submitted on 26/02/2015 has filed revised working of taxable income as per mutuality concept. In Fixed Income Money Market and Derivatives Association of India, the above letter the assessee has stated that assessee has offered to income tax on pro-rata basis contributions received from non- members for participating in various programmes and others conducted by the assessee was exempt from income tax, however due to amendment in section 2(15), the definition of word charitable purpose was modified with effect from A.Y. 2009-10. The object of the assessee company is education and therefore the income of the assessee company in respect of amount received from non members is exempt from income tax, however to avoid litigation, the assessee has voluntarily offered to income tax the contributions received from non members for participating in training programmes and other programmes. Accordingly, assessee offered income of Rs. 14,99,277/-. On verification of the ROI statement, it noticed by AO that assessee is not claiming depreciation on software installed for developing website of the company and software for development of corporate bond reporting platform. Accordingly, assessee revised its working to declare the taxable income of Rs. 26,61,337/- instead of the income already declared by assessee at Rs. 14,99,273/-.

Fixed Income Money Market and Derivatives Association of India,

4. Subsequently, assessee filed another letter dated 17/03/2015, as per which assessee claimed that assessee company is formed to carry out charitable activities and even though there is amendment in section 2(15) w.e.f. AY 2009-10, still assessee company is not affected by such insertion of amending proviso of section 2(15) and assessee requested the AO to assess the income of the assessee u/s 11 of the Act and ignore the earlier claim of the assessee on mutuality concept and in this respect, assessee relied on few case law.

5. After considering the submission of the assessee, AO rejected the contention of the assessee and completed the assessment based on the mutuality concept and further notice that assessee has declared interest and miscellaneous income received from banks. AO by relying on the case of Bangalore Club vrs. CIT, the interest income and misc. income received are treated as income from other sources and accordingly, AO made the addition of Rs. 32,43,886/-.

11. Considered the rival submission and material placed on record, we notice from the record that assessee is a company incorporated u/s 25 of the Companies Act. As per the submission of Ld. AR, assessee is engaged in carrying on activities as per its object clause of 'MOA' registered under Companies Act and the duty entrusted by RBI on prescribing uniform market practices. In the interest of maintaining integrity and orderly conditions 'G- sec' market and assessee was given the task of developing code of conduct for the users of NDS-OM platform. In order to bring uniform application, the roles and responsibilities as defined by FIMMDA. In order to bring uniformity, assessee has developed F-Trac platform, accordingly it was carrying on training and development activities and usage of such software programmes for a fee. Since the goal of the assessee is to bring uniformity in Fixed Income Money Market and Derivatives Association of India, market in carrying out trading in the market and it involves in activities which is available to its members as well as non members. We notice that assessee was declaring income based on the mutuality concept, based on the reasons best known to the assessee or by professional advice. However, in our considered view, when the assessee was providing services to its members as well as non members, it can never be categorized under mutuality concept. The mutuality concept can be applied only when a mutual concern or AOP, who agree to contribute funds for common purpose and receive back the surplus left out in the same capacity in which they made the contribution. Therefore, the capacity as contributors and participants remain same. When they cannot separate the activities of participants and non members, they can never be considered as mutual concern. Therefore, in our considered view, the activities carried on by the assessee can never be assessed under the concept of mutuality. Further, we notice that assessee company was established under section 25 of the Companies Act with the motive to carry on charitable activity and we also notice that assessee was granted registration u/s 12A of the Act. Since, assessee was carried on its Fixed Income Money Market and Derivatives Association of India, affairs not keeping separate data for its members as well as non members and also we take note of the object clause para 1 of Memorandum of Association based on which, even Ld. CIT(E) has granted registration u/s 12A recognizing it as a charitable institution. We notice that AO has invoked the ratio of Banglore Club (supra), simply considering the fact that assessee has filed its return of income based on mutuality concept overlooking the actual facts.