Surplus investment in mutual funds cannot render principle of Mutuality inapplicable

Brief of the case:

The Hon’ble Bombay High Court in the above cited case held that merely because a part of surplus was invested in mutual funds it cannot mean that it would  render  the principle of mutuality  inapplicable more so when the invested money has to be utilized for the furtherance of association’s objectives and the income from mutual fund dividends has been offered to tax.

 Facts of the case:

The assessee is an association of Air Cargo Agents in India. During the subject assessment year 2007-08 it received subscription/contribution from its members in three forms i.e. annual subscription, member’s annual convention and member’s training programmes aggregating to contribution from the members of Rs.54.07 lakhs.

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