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Section 4 of the Income-tax Act, 1961 - Mutual concern - Assessable as - Assessment year 2002-03 - Principle of mutuality is not applicable to interest income earned by a club from fixed deposit with bank [In favour of revenue] The assessee-company was incorporated under the Companies Act with the object to promote social interaction among the members of the club, their families and friends to provide club house facilities for sports/games both indoor and outdoor. The assessee claimed that the mutual association and the entire income of the assessee was not liable to tax since it was mutual in character. A part of the assessee's income was in the form of interest income received from deposits with the bank. The Assessing Officer treated the interest income received by the assessee from the deposits with the bank as income received from non-members and, hence, held that same would not be considered as a mutual income. The Commissioner (Appeals) as well as the Tribunal upheld the order of the Assessing Officer. Held that the Tribunal's order was justified. CASES REFERRED TO Madras Gymkhana Club v. Deputy CIT [2010] 328 ITR 348 (Mad.). Ashok Pathy and M/s. Pass Associates for the Appellant. JUDGMENT K. Raviraja Pandian, J. - The order of the Appellate Tribunal, Chennai "B" Bench dated May 13, 2008 in I.T.A. Nos. 42-46/Mds/2008 for the assessment year 1999-2000 2001-02, 2002-03, 2003-04 and 2004-05, is put in issue in this appeal by formulating the following substantial question of law : "Whether the Income-tax Appellate Tribunal was right in law in holding that the principle of mutuality and 'no man can trade with himself', is not applicable to the interest income from fixed deposit earned by the appellant from bank out of the surplus funds raised from contribution of several members of the appellant-club even when the benefit of interest derived is utilised by several members of the appellant-club ?" 2. The appellant-company is incorporated under the Companies Act with the object to promote social interaction among the members of the club, their families and friends to provide club house facilities for sports/games both indoor and outdoor. The appellant claimed…

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