“The Doctrine of Mutuality traces its origin from the basic principle that a man cannot engage into a business with himself.
“When a number of individuals agree to contribute funds for a common purpose and stipulate that their contributions so far as not required for that purpose shall be repaid to them, I cannot conceive why they should be regarded as traders or why contributions returned to them should be regarded as profits.”
– New York Life Insurance Co. v. Styles (Surveyor of Taxes), (1889) 2 TC 460.
The Doctrine of Mutuality bestows a special status to qualify for exemption from tax liability. It is a settled proposition of law that exemptions are to be put to strict interpretation. In Thomas M. Cooley, The Law of Taxation, 4th Edition, Volume 2, Pg. 671 the rule regarding strict construction of exemptions is succinctly summarized.”
– Hon’ble Justice A.M. Khanwilkar, Yum! Restaurants (Marketing) Pvt. Ltd. v. Commissioner of Income Tax, Delhi, [Civil Appeal No. 2487 of 2010].