M/S. BANGALORE CLUB vs COMMISSIONER OF INCOME TAX

The Supreme Court ruled that the doctrine of mutuality applies to the Bangalore Club, an unincorporated Association of Persons, allowing it to claim exemption from income tax on interest earned from fixed deposits with member banks under Section 2(24) and Section 10(23) of the Income Tax Act, 1961. The Court held that the interest received from member banks does not constitute a revenue receipt, affirming the decisions of the Commissioner of Income Tax (Appeals) and the Income-Tax Appellate Tribunal. Consequently, the appeals by the Commissioner of Income Tax were dismissed, upholding the exemption claim of the assessee.