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Documents citing Commissioner Of Income-Tax, Madras vs Kumbakonam Mutual Benefit Fund Ltd on 7 May, 1964

Automobile Association Of Bengal vs Commissioner Of Income-Tax, Calcutta. on 15 November, 1967

Unknown to Mr. Banerjee, until the same was pointed out to him by the learned counsel for the revenue, was that the decision of the Madras Hight Court in Kumbakonam Mutual Benefit Fund Ltd. had been reversed by the Supreme Court in appeal, which decision is reported in Commissioner of Income-tax v. Kumbakonam Mutual Benefit Fund Ltd. In that case the Supreme Court observed :
Calcutta High Court Cites 14 - Cited by 10 - Full Document

Dcit,Circle-8, Kolkata, Kolkata vs M/S. The Saturday Club Ltd, Kolkata on 6 November, 2023

33. An almost similar issue arose in Kumbakonam Mutual Benefit Fund Ltd. case (supra). The facts in that case were that the assessee, namely, Kumbakonam Mutual Benefit Fund Ltd., was an incorporated company limited by shares. Since 1938, the nominal capital of the assessee was Rs.33,00,000/- divided into shares of Rs.1/- each. It carried on banking business restricted to its shareholders, i.e., the shareholders were entitled to participate in its various recurring deposit schemes or obtain loans on security. Recurring deposits were obtained from members for fixed amounts to be contributed monthly by them for a fixed number of months as stipulated at the end of which a fixed amount was returned to them according to published tables. The amount so returned, covered the compound interest of the period. These recurring deposits constituted the main source of funds of the 42 ITA No. 1340/KOL/2012 (A.Y. 2008-09) ITA No. 339/KOL/2013 (A.Y. 2009-10) ITA No. 837/KOL/2015 (A.Y. 2010-11) ITA No. 2377/KOL/2016 (A.Y. 2011-12) ITA No. 2491/KOL/2017 (A.Y. 2012-13) The Saturday Club Limited assessee for advancing loans. Such loans were restricted only to members who had, however, to offer substantial security therefor, by way of either the paid up value of their recurring deposits, if any, or immovable properties within a particular district. Out of the interest realised by the assessee on the loans which constituted its main income, interest on the recurring deposits aforesaid was paid as also all the other outgoings and expenses of management and the balance amount was divided among the members pro rata according to their share-holdings after making provision for reserves, etc., as required by the Memorandum or Articles aforesaid. It was not necessary for the shareholders, who were entitled to participate in the profits to either take loans or make recurring deposits.
Income Tax Appellate Tribunal - Kolkata Cites 23 - Cited by 0 - Full Document

The Saturday Club Limited, Kolkata vs Dcit, Cir-8(2), Kolkata, Kolkata on 6 November, 2023

33. An almost similar issue arose in Kumbakonam Mutual Benefit Fund Ltd. case (supra). The facts in that case were that the assessee, namely, Kumbakonam Mutual Benefit Fund Ltd., was an incorporated company limited by shares. Since 1938, the nominal capital of the assessee was Rs.33,00,000/- divided into shares of Rs.1/- each. It carried on banking business restricted to its shareholders, i.e., the shareholders were entitled to participate in its various recurring deposit schemes or obtain loans on security. Recurring deposits were obtained from members for fixed amounts to be contributed monthly by them for a fixed number of months as stipulated at the end of which a fixed amount was returned to them according to published tables. The amount so returned, covered the compound interest of the period. These recurring deposits constituted the main source of funds of the 42 ITA No. 1340/KOL/2012 (A.Y. 2008-09) ITA No. 339/KOL/2013 (A.Y. 2009-10) ITA No. 837/KOL/2015 (A.Y. 2010-11) ITA No. 2377/KOL/2016 (A.Y. 2011-12) ITA No. 2491/KOL/2017 (A.Y. 2012-13) The Saturday Club Limited assessee for advancing loans. Such loans were restricted only to members who had, however, to offer substantial security therefor, by way of either the paid up value of their recurring deposits, if any, or immovable properties within a particular district. Out of the interest realised by the assessee on the loans which constituted its main income, interest on the recurring deposits aforesaid was paid as also all the other outgoings and expenses of management and the balance amount was divided among the members pro rata according to their share-holdings after making provision for reserves, etc., as required by the Memorandum or Articles aforesaid. It was not necessary for the shareholders, who were entitled to participate in the profits to either take loans or make recurring deposits.
Income Tax Appellate Tribunal - Kolkata Cites 23 - Cited by 0 - Full Document

The Saturday Club Limited, Kolkata vs Dcit, Circle - 8(2), Kolkata, Kolkata on 6 November, 2023

33. An almost similar issue arose in Kumbakonam Mutual Benefit Fund Ltd. case (supra). The facts in that case were that the assessee, namely, Kumbakonam Mutual Benefit Fund Ltd., was an incorporated company limited by shares. Since 1938, the nominal capital of the assessee was Rs.33,00,000/- divided into shares of Rs.1/- each. It carried on banking business restricted to its shareholders, i.e., the shareholders were entitled to participate in its various recurring deposit schemes or obtain loans on security. Recurring deposits were obtained from members for fixed amounts to be contributed monthly by them for a fixed number of months as stipulated at the end of which a fixed amount was returned to them according to published tables. The amount so returned, covered the compound interest of the period. These recurring deposits constituted the main source of funds of the 42 ITA No. 1340/KOL/2012 (A.Y. 2008-09) ITA No. 339/KOL/2013 (A.Y. 2009-10) ITA No. 837/KOL/2015 (A.Y. 2010-11) ITA No. 2377/KOL/2016 (A.Y. 2011-12) ITA No. 2491/KOL/2017 (A.Y. 2012-13) The Saturday Club Limited assessee for advancing loans. Such loans were restricted only to members who had, however, to offer substantial security therefor, by way of either the paid up value of their recurring deposits, if any, or immovable properties within a particular district. Out of the interest realised by the assessee on the loans which constituted its main income, interest on the recurring deposits aforesaid was paid as also all the other outgoings and expenses of management and the balance amount was divided among the members pro rata according to their share-holdings after making provision for reserves, etc., as required by the Memorandum or Articles aforesaid. It was not necessary for the shareholders, who were entitled to participate in the profits to either take loans or make recurring deposits.
Income Tax Appellate Tribunal - Kolkata Cites 23 - Cited by 0 - Full Document

Puraswalkam Santhatha Sanga Nidhi Ltd. ... vs Reserve Bank Of India Of Others on 29 October, 1996

30. Mr. C.A. Sundaram, however, made an alternative argument that a nidhi company is not at all a mutual benefit financial company. For this purpose, he relied on the judgment of the Supreme Court in CIT v. Kumbakonam Mutual Benefit Fund Ltd. . I have carefully looked into the said decision, bearing in mind the arguments of Mr. Habibullah Basha, learned senior counsel for the respondents. In that case, Kumbakonam Mutual Benefit Fund Limited, a nidhi company, notified under section 620A of the Companies Act, was receiving interest on the loans advanced by it to its own members and the said interest constituted its main source of income. From the said interest received by the nidhi company, the company not only paid interest on recurring and other deposits, but also the other outgoings and expenses of management. The balance of the income was divided among the members pro rata, according to their shareholdings, after making provision for reserves, etc. It has to be noticed that the shareholders who are thus entitled to participate in the profits need not have either taken loans or have made recurring or other deposits. Both the Income-tax Officer and the Appellate Tribunal had held that the assessee (nidhi company) was a banking concern and that, therefore, the income was assessable. The following question was referred to this court, "whether there were materials for the Tribunal to hold that the assessee is a banking concern assessable under section 10 for all the assessment years and not exempt ?" This court answered the said question in the negative. But the Supreme Court reversed the judgment of this court and answered the said question in the affirmative. In doing so, the Supreme Court considered whether the cardinal requirement, namely, that all the contributors to the common fund are entitled to participate in the surplus and all the participators in the surplus are contributors to the common fund was present in the case. In other words, the apex court had to consider whether there was complete identity between the contributors and the participators.
Madras High Court Cites 33 - Cited by 0 - Full Document

Sports Club Of Gujarat Ltd. vs Commissioner Of Income-Tax on 8 October, 1987

6. Both the Revenue and assessee were dissatisfied with the order passed by the Appellate Assistant Commissioner. Both approached the Income-tax Appellate Tribunal in appeal. The Tribunal, after formulating the points for determination, examined the question mutuality in the light of certain decisions, namely, New York Life Insurance Company v. Styles [1889] 2 TC 460 (HL); CIT v. Royal Western India Turf Club Ltd. [1953] 24 ITR 551 (SC); CIT v. Kumbakonam Mutual Benefit Fund [1964] 53 ITR 241 (SC); CIT v. Merchant Navy Club [1974] 96 ITR 261 (AP) and CIT v. Wheeler Club Ltd. [1953] 49 ITR 52 (All) and came to the conclusion that the income of the club assessable under the head "Profits and gains of business" would not be eligible to tax on the principle of mutuality since the contributors and the participants represented one identical body. It, however, rejected assessee's contention the entire surplus should be exempt from tax on the ground of mutuality.
Gujarat High Court Cites 14 - Cited by 43 - A M Ahmadi - Full Document

Jamshedpur Co-Operative Stores Ltd. vs Commissioner Of Income-Tax on 1 April, 1985

9. The parameter in regard to mutuality having been set down by the Supreme Court in the two cases referred to above, let us analyse how matters stand in the instant case. The outstanding features are that membership of the society (the assessee) was open to the employees of the Tisco Ltd. and also employees of associated and subsidiary companies in Jamshedpur and Tatanagar. The object of the society included sale and supply to the members of the Society and employees of the Tata Iron and Steel Company Limited and of the associated and subsidiary companies in Jamshedpur and Tatanagar, The Society thus sold consumer goods not only to members but also to non-members. Similarly, the Society was authorised to open and provide restaurants and refreshment rooms for the benefit of the members and the employees of the company mentioned above. Further, the Society was authorised to take on lease or in exchange, hire by way of purchase or otherwise acquire, any immovable or movable property necessary or convenient for the purpose of the society. The membership of the Society was open not only to the employees of Tisco, but also co-operative societies registered under the Bihar and Orissa Co-operative Societies Act, 1935, and situated in Jamshedpur and Tatanagar and their paid employees. The liability of a member for the debts of the Society was limited to the face value of the shares actually held by him less the amount paid by him on such shares. Rule 52 of the bye-laws of the Society lays down that all sales shall ordinarily be for cash and may, at the discretion of the managing committee, be made to non-members also. It is not in controversy that members as well as non-members were buying from the co-operative society shops. The contributions to the fund were thus of members as well as of non-members. Dividends on shares were to be distributed to members. The above features are to be found in the bye-laws of the assessee which is annexure E to the reference. The above leave no manner of doubt that there was no common fund. The participators in the dividends may not have contributed to its funds. The members were receiving facilities which were same or similar as were received non-members. The participators in the dividends were only shareholders. The Society was thus indulging in commercial transactions. By the test laid down in the two Supreme Court decisions, referred to above, there was complete want of mutuality. That being so, the profits of the Society from sales to members were also liable to be added to its total income.
Patna High Court Cites 15 - Cited by 5 - Full Document

M/S.Madras Gymkhana Club vs The Deputy Commissioner Of Income Tax on 30 July, 2009

23. When we considered the Division Bench decision of this Court as held in Wankaner Jain Social Welfare Society case, while deliberating on the principle of Mutuality, the Division Bench made it clear that the identification between the contributor and the participant is mandatory as held by the Hon'ble Supreme Court in the case of CIT Vs. Kumbakonam Mutual Benefit Fund Ltd. (1964) 53 ITR 241 and that to fulfil the concept of Mutuality, the identity was required to be established in relation to the income and as regards those contributing to the income and those participating in the distribution of that income. In other words, according to the Division Bench, the identity should exist in the matter of contribution as well as availing of the benefit in equal proportion and then and then alone it can be held that the concept of Mutuality gets fulfilled. This was also explained by way of an analogy even in the case of such clubs, where while on the one hand the contribution from the members in the form of subscription or otherwise is collected which is in turn utilised in developing the various activities of the Club by way of recreational facilities or in the form of boarding or lodging and such facilities are made available for the benefit of the members in equal proportion without there being any special benefit conferred on any particular member in either enjoying or availing the benefit in an exclusive manner.
Madras High Court Cites 23 - Cited by 5 - F M Kalifulla - Full Document
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