V. RAJKUMAR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The assessee is on appeal as against the order of the Income-tax Appellate Tribunal, dated April 26, 2006, relating to the assessment year 1996-97. The assessee is an individual, who was a subscriber to a chit scheme. During the assessment year 1996-97, the assessee received chit dividend of Rs. 90,140. Placing reliance on the decision of the Punjab and Haryana High Court in the case of Soda Silicate and Chemical Works v. CIT, 1989 179 ITR 588 (P & H), the assessee claimed exemption on the principle of mutuality. The assessee's case was taken up for scrutiny and, after hearing the assessee, the Assessing Officer held that the income derived in the form of chit dividend was taxable under section 28(iii) of the Income-tax Act.

(2.) Aggrieved by the order of assessment, the assessee went on appeal before the Commissioner of Income-tax (Appeals), who dismissed the assessee's appeal by following the decision of this court in the case of CIT v. Dr. Chinna Oomen, 1984 150 ITR 583

(3.) Aggrieved by this, the assessee went on appeal before the Income-tax Appellate Tribunal by contending that the surplus received on the close of the chit was not income exigible to tax on the principles of mutuality. Thus, the assessee once again placed reliance on the decision of the Punjab and Haryana High Court in Soda Silicate and Chemical Works v. CIT, 1989 179 ITR 588 , referred to above. In considering the said claim, the Income-tax Appellate Tribunal applied the decision of this court in the case of in the case of CIT v. Dr. Chinna Oomen, 1984 150 ITR 583 and rejected the assessee's contention. Aggrieved by this, the assessee has preferred the present tax case (appeal).