Principle of Mutuality could be confined in respect of the income earned by the club from investments of its surplus funds

RELEVANT PARAGRAPH 16. Before answering the first question viz., as to whether the interest income of the assessee received from its corporate members on the investments of surplus funds as Fixed Deposits or Debentures etc., is exempted from tax on the concept of Mutuality, it will be worthwhile to refer to the principles laid down on the Doctrine of Mutuality in the decisions of the Hon’ble Supreme Court as well as some of the High Courts. 17. In the decision reported in (2000) 243 ITR 89 (SC) (Chelmsford Club Vs. Commissioner of Income-tax) as a proposition of law, the Hon’ble Su...