JUDGEMENT

NAGARATHNA, J. Since leave has been granted in Special Leave Petition Nos.

035895-035901 of 2011, in the connected matters also leave is granted.

2. In these cases, since common questions of law and facts arise, they have been clubbed together and are heard and disposed of by this common judgment. These appeals arise from the High Courts of Andhra Pradesh at Hyderabad pertaining to Secunderabad Club and the Madras High Court pertaining to Madras Gymkhana Club, Madras Cricket Club, The Coimbatore Cosmopolitan Club, Madras Club, M/s Wellington Gymkhana Club and M/s the Coonoor Club.

Bird’s eye view of the controversy:

3. A short but interesting question of law arises in these cases, which is, whether the deposit of surplus funds by the appellant Clubs by way of bank deposits in various banks is liable to be taxed in the hands of the Clubs or, whether, the principle of mutuality would apply and the interest earned from the deposits would not be subject to tax under the provisions of the Income Tax Act, 1961 (hereinafter referred to as “the Act” for the sake of convenience). The High Courts in the impugned judgments have uniformly held that the interest earned on the bank