These two appeal, one for asst. yr. 1977-78 and another for asst. yr. 1978-79, filed by revenue against consolidated order of AAC of IT, I-Range, Bombay, deal with same issue and are, therefore, for sake of convenience, disposed of by common order. assessee is trust, which was established on 1st Jan., 1953 with object of encourangings saving among member, providing emergency loans for short periods to its members and providing financial help to members on retirement or termination of service and to legal heirs of member on his death. membership required admission fee of Rs. 1 and monthly subscription varying from Rs. 1 to Rs. 5. Whatever was subscription of member, was credited in separate account in books of trust. member was entitled to take loan from trust upto 90per cent of credit to his account on payment of nominal interest of 6 per cent per year. Whatever were surplus funds of trust, after giving loans to members were put in bank account, which earned interest. At time of retirement, termination of service of death of member, amount credited to his account was refunded to member or his legal representative and in addition member or legal representative of member who died, were paid surplus for year in same proportion as credit to their account with reference to total credits of trust. Here it will be necessary to pint out that this distribution of surplus took place only once for each member in year of his retirement from service or termination of his service or his death. It was claimed before ITO, in course of assessment proceedings, that there was complete identity between contributors to fund and recipients and, therefore, principle of mutuality applied and assessee s income was not liable to tax. ITO, however, did not accept this claim and taxed income of assessee trust. When matter went up in appeal, AAC held that assessee trust had been formed for purpose of earning profit or for any commercial activity but was only for purpose of mutual help. He, therefore, held that income of assessee trust was not liable to tax. revenue is aggrieved and has, therefore, come up in present appeals before us. ld. Departmental Representative, Shri Srivastava submitted that principle of mutuality only applied where there was complete identity between contributors of fund and recipients of fund, as laid down by Hon ble Supreme Court in case of CIT vs. Kumbakonam Mutual Benefit Fund Ltd. (1964) 53 ITR 241 (SC). In this connection, he referred to cls. 8 to 9 of trust deed, which mention that corpus of trust will include gifts or forfeited amount also, which, by resolution, could be spent for other purposes as well. Reference was also mad by him to ruling of Hon ble High Court of Gujarat in case of CIT vs. Shri Jari Merchants Association (1977) 106 ITR 542 (Guj) where their Lordship of Hon ble High Court of Gujarat held that since identity of member, who made contribution and recipients, was not same and, by resolution, surplus assets could be used at time of its dissolution in manner proposed in resolution passed by association, this was not case of mutual concern and was not entitled to exemption. Summing up, Shri Srivastava vehemently argued before us that assessee-trust was not entitled to exemption from tax and claim of exemption was wrongly allowed by AAC. On other hand, assessee s ld. counsel, Shri Patil, submitted to us that cls. 8 and 9 of trust deed, which speak of gifts and forfeited amounts, are only to meet contingency where some gifts were received or member, who was making subscription, stopped making subscription, while he had yet to retire in which event contributions made by him could be forfeited, such condition was always put in every trust deed to take care of eventuality howsoever, far fetched and on this ground assessee s claim of exemption should not be denied. Proceeding further Shri Patil submitted that in fact contributions to fund of assessee trust were only by way of admission fee and monthly subscription by members at time of retirement or termination of service or death of member, member concerned or his legal representatives, as case may be, were paid not only whatever was contributed by member as his subscription but also share in surplus of trust in year in which retirement, termination of service or death took place thus there was complete identity between contributors to fund of trust and recipients from trust. Reference was made by him to ruling of Hon ble High Court on Andhra Pradesh in case of CIT vs. Merchant Navy Club (1974) 96 ITR 261 (AP) and rulings of Hon ble High Court of Madras in case of CIT vs. Madras Race Club 1976 CTR (Mad) 377: (1976) 105 ITR 433 (Mad) and Presidency Club Ltd. vs. CIT (1980) 19 CTR (Mad) 216: (1981) 126 ITR 264 (Mad) wherein their Lordships laid down that where number of persons come together to form club or Association of Persons with view to mutual help, income arising from such activity was not liable to taxes. It was also pointed out by Shri Patil that, as mentioned by AAC in his order, in case of Brihad Bambai Municipal Hindi Shikshak Kosh for asst. yrs. 1977-78 and 1978-79 where facts were identical and same issue cropped up, AAC held that income was not liable to tax and this order of AAC was accepted by Department. Summing up, Shri Patil vehemently argued before us that assessee s claim of income not being taxable was perfectly justified and was rightly allowed by AAC. We have carefully considered rival submissions. There is merit in argument of assessee s ld. counsel, Shri Patil, that clauses dealing with gifts or forfeiture of amounts where members ceased to subscribe, while they are yet to retire and how these amounts are to be spent being decided by resolution, are only to take care of far fetched contingency and do not reflect what had actually happened. It is not under dispute that he contributors to fund of assessee-trust are members of Association of Persons, who had paid Rs. 1 by way of admission fee and monthly subscriptions, which where credited to their account and at time of their retirement, termination of service or death, amount of subscription standing to their credit in books of trust was refunded together with share of surplus of trust of year in same proportion as credit in their accounts. There was thus complete identity between contributors to trust funds and recipients or beneficiaries from funds of trust. ld. Departmental Representative, Shri Srivastava has not controverted statement at Bar made by Shri Patil that in case of Trustees of Brihad Bambi Municipal Hindi Shikshak Kosh for asst. yr. 1977-78 and 1978-79, on identical facts claim of exemption was accepted by AAC and against this order there was no appeal by revenue. Considering all these and looking to totality of facts and circumstances, we have no hesitation in coming to conclusion that claim of assessee-trust that its income was not liable to tax was justified and was rightly allowed in appeal by AAC. appeals filed by revenue, therefore, fail and are hereby dismissed. *** SEVENTH INCOME TAX OFFICER v. MUM.HINDI SHIKSHAK SAHAYAK NIHID, BOMBAY