Commissioner Of Income Tax vs Kumbakonam Mutual Benefit Fund Ltd.

Whether a mutual benefit fund company, operating banking business restricted to shareholders, qualifies for tax exemption under the principle of mutuality as established in New York Life Assurance Co. vs. Styles --- Held No. The Supreme Court held that the assessee's income was taxable as business income under Section 10 of the Indian Income Tax Act 1922, as there was no complete identity between contributors to the common fund and participators in the surplus, since shareholders could receive dividends without contributing through loans or deposits.