Case Law Details
Association of Mutual Funds in India Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that activities of the appellant-society directed towards the benefit of investors and potential investors forming part of the general public which are note limited to the benefit of its members is eligible for deduction u/s 11 of the Income Tax Act, 1961
Facts- The Appellant, a company holding valid registration under Section 12A of the Act, filed its ROI declaring ‘Nil’ income after claiming exemption u/s. 11 and 12 of the Act. During the assessment proceedings, the Appellant was asked to explain why the income from registration fees, certification test fee, receipts from sale of publication and other income as reflected in Income & Expenditure Account should not be taxed in the hands of the Appellant as the same were not covered by the principle of mutuality.
AO, vide Assessment Order. dated 28.03.2014, passed under Section 143(3) of the Act rejected the submission/ explanation of the Appellant and denied exemption u/s. 11 of the Act in respect of receipts from non-member amounting to INR 4,78,98,410/-. AO treated the Appellant as a mutual association and did not tax the receipts from its members. However, AO denied exemption u/s. 11 read with Section 2(15) of the Act and brought to tax gross receipts from non-members without allowing any deduction for expenditure incurred.
Being aggrieved, the Appellant went in appeal against the Assessment Order before the CIT(A) however the same was dismissed. Being aggrieved, the Appellant/Assessee is in appeal before us.
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