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1 - 7 of 7 (0.36 seconds)THE BIHAR FINANCE ACT, 2018
Section 48 in The Companies Act, 1956 [Entire Act]
The Companies Act, 1956
The Income Tax Act, 1961
State Of West Bengal vs Calcutta Club Limited on 3 October, 2019
8. More apposite would be the judgment of the
Hon'ble Supreme Court in Calcutta Club Ltd. (supra), wherein
the 'doctrine of mutuality' was applied when persons carrying
on a certain activity, in a manner, indicating absolute identity
between contributors and participators. This identity according
to the learned Judges would not be snapped because the surplus
that arises from the common fund is not distributed among
members. What was emphasized was that, while applying the
doctrine there is no sale transaction between an incorporated
legal entity in the nature of a club and its own members.
Secundrabad Club Etc. vs C.I.T-V Etc. on 17 August, 2023
7. We cannot but notice that Secunderabad Club
(supra) was a decision in the context of the Income Tax Act, the
principles of which cannot be applied to an indirect tax like
sales tax. The specific reference was also to paragraph 93 of the
decision, wherein, the Hon'ble Supreme Court found that the
'principles of mutuality' applies only when a number of people
who contribute to a fund are ultimately paid the surplus, from
the fund, which alone makes it a repayment of the contributor's
own money. Therein, the surplus fund was not applied for the
common purpose of the club or towards the benefit of the
members of the club directly. It was invested with a third party,
Patna High Court MA No. 210 of 2008 dt.19-12-2024
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a bank, for the purpose of using it later. The interest generated
on the fixed deposits or the investments made hence, becomes a
commercial activity, thus permitting the bank to utilize the fixed
deposit amount for its banking business and derive profit
thereof. Thus, the identicality between the contributors to the
common fund and the participation in it, which is a sine qua non
for the application of 'principles of mutuality' would get
ruptured. At the risk of the repetition, we have to reiterate that
this is in the context of levy of income tax.
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