DHEERAJ DREAMS, MUMBAI V. ITO 23(1)(4), MUMBAI

ITA 4963/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8834 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 03-08-2016
• Court: TRIBUNAL
• Department Lawyers: TUFAIL AHMAD KHAN
• Assessee Lawyers: C V DHARKAR
• Keywords: Opportunity of being heard; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NO.4963/M/2016 (AY 2011 - 2012) DHEERAJ DREAMS, B - WING DREAMS COMPLEX, STATION ROAD, BHANDUP (W), MUMBAI 400 078. / VS. ITO - 23(1)(4), MUMBAI. ./ PAN : AAAAD6811F ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI C.V. DHARKAR / RESPONDENT BY : SHRI TUFAIL AHMAD KHAN, DR / DATE OF HEARING : 12.01.2017 / DATE OF PRONOUNCEMENT : 18 .01.2017 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 03.08.2016 IS AGAINST THE ORDER OF THE CIT (A) - 40, MUMBAI DATED 6.5.2016 FOR THE ASSESSMENT YEAR 2011 - 2012. 2. IN THIS APPEAL, ASSESSEE RAISED THE SOLITARY ISSUE RELATING TO THE APPLICABILITY OF THE PRINCIPLE OF MUTUALITY IN RESPECT OF THE INTEREST RECEIPTS EARNED BY THE ASSESSEE FROM THE FIXED DEPOSITS (FDS) WITH INDIAN OVERSEAS BANK AND DISTRICT CO - OPERATIVE BANK. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COOPERATIVE HOUSING SOCIETY (CHS) AND EARNED A SUM OF RS. 6,88,577/ - FROM THE BANK ACCOUN TS OF SAVINGS AND FDS. THE SAID AMOUNT WAS CLAIMED AS EXEMPT IN VIEW OF THE APPLICABILITY OF THE PRINCIPLE OF MUTUALITY TO THE CHS. ON FINDING THE INTEREST EARNED IS NOT FROM THE CHS, FROM THE BANK, A SEPARATE BUSINESS ENTITY, IN EFFECT; THE REVENUE OFFICER S INVOKED THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF BANGALORE CLUB VS COMMISSIONER OF INCOME - TAX (SC) 350 ITR 509 AND OTHERS. IT IS THE OPINION OF THE IT OFFICERS THAT THE SAID AMOUNT IS OUTSIDE THE PRINCIPLE OF MUTUALITY. ON APPEAL, CIT (A) CONFIRMED THE SAID ADDITION. AGGRIEVED WITH THE SAME, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 2 3. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE FACTS RELATING TO THE SAID AMOUNT IS DIFFERENT FROM THAT OF THE CITED JUDGME NT OF HONBLE SUPREME COURT IN THE CASE OF BANGALORE CLUB (SUPRA). LD AR ALSO SUBMITTED THAT THE SAID DECISION WAS NOT CITED BY THE CIT (A) IN HIS ORDER AND THEREFORE, LD COUNSEL FOR THE ASSESSEE WANTS THE WHOLE ISSUE TO BE REMANDED TO THE FILE OF THE AO FOR FRESH ADJUDICATION. 4. ON HEARING BOTH THE PARTIES, WE FIND, THERE IS NEED FOR DIGGING OUT THE FACTS RELATING TO THE MAKING OF THE FDS WITH BANK / COOPERATIVE BANK, WHERE THE EARNING OF INTEREST INCOME WILL MAKE ANY DIFFERENCE IF THE BANK INVOLVED IS NOT ONLY A COMMERCIAL BANK BUT A COOPERATIVE BANK TOO . THERE IS ALSO NEED FOR EXAMINING THE FACTS OF THE PRESENT CASE WITH THAT OF THE CITED JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF BANGALORE CLUB (SUPRA). ACCORDINGLY, WE REMAND THIS ISSUE TO T HE FILE OF THE AO FOR FRESH ADJUDICATION FOR WANT OF FACTS. WE DIRECT ACCORDINGLY. AO SHALL GRANT A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS PER THE SET PRINCIPLES OF NATURAL JUSTICE. THUS, GROUNDS RAISED BY THE ASSESSEE IN THE APPEAL AR E ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH JANUARY, 2017. SD/ - SD/ - ( AMARJIT SINGH ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 18.01.2017 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . 3 //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI