AMAR AMBIENCE SAHKARI GRUHRACHNA SANSTHA MARYADIT , PUNE V. ITO WARD 7(1), PUNE

ITA 83/PUN/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 8380 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 26-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, PUNE SINGLE MEMBER CASE SHRI S.S. GODARA, JUDICIAL MEMBER ITA No. 83/PUN/2020 : Assessment Year : 2014-15 Amar Ambience Sahakari Gruharachana Sanstha Maryadit Sr.No. 61/46/461/2 3A 3B Ghorpadi, Pune-411 001 PAN: AABAA 5618 G :Appellant Vs. The Income-tax Officer Ward 7(1) Pune. : Respondent Appellant by : Shri Kishor Phadke Respondent by : Shri M.G. Jasnani Date of Hearing : 28-07-2022 Date of Pronouncement : 11-08-2022 ORDER This assessee‟s appeal for A.Y. 2014-15 arises against the CIT(A)-5, Pune‟s order dated 25-09-2019 passed in case No. PN/CIT(A)-5/ITO Ward 7(1) 10545/2016-17 involving proceedings u/s 143(3) of the Income-tax Act, 1961, in short “the Act”. Heard both the parties. Case file perused. 2. The assessee raises the following substantive grounds in the instant appeal. 1. The ld. CIT(A) erred in law and on facts in confirming the total income of the appellant at Rs. 32,15,360/- instead of the returned income of Rs. 49,902/-. 2. The ld. CIT(A) erred in law and on facts in not appreciating that the interest of Rs. 31,65,456/- on deposits with nationalised banks, are covered under the concept of “mutuality” and hence not taxable. 3. The ld. CIT(A) ought to have appreciated that the majority of interest received from nationalised banks was generated out of the fixed deposits created from the members‟ contribution of one-time maintenance deposits; and as such, was utilised towards the maintenance and other expenses for the benefit of members. On logical analogy, the same ought to have been reduced from overall maintenance expenses, being a cost mitigation exercise. 2 ITA No. 83/PUN/2020 Amar Ambience Sah. Griha A,Y. 2014-15 4. Without prejudice to the above ground No. 2 and 3 above, the ld. CIT(A) erred in law and on facts in not granting the benefit of deduction of maintenance expenses against the interest income on a proportionate basis. 5. The appellant craves leave to add/modify/delete/amend all/any of the grounds of appeal. “ 3. Mr. Phadke submitted at the outset that hon‟ble apex court in Bangalore Club Ltd. Vs. CIT (2013) 350 ITR 509 (SC) has settled the law that such interest income derived from deposits made in nationalised banks/non- members is not entitled for “mutuality”. His only case is once both the learned lower authorities have assessed the impugned interest income of Rs.31,65,456/- under the residuary head of income from „other sources‟, they ought to have granted deduction of the corresponding expenditure wholly and exclusively incurred for the purposes of deriving the same u/s 57(iii) of the Act. 4. Mr. Jasnani strongly supported the impugned disallowance on facts as well as law. 5. I have given my thoughtful consideration to the foregoing rival contentions and find prima facie merit in the assessee‟s stand that learned lower authorities have not considered the corresponding expenditure u/s 57(iii) of the Act. The facts also remains that it was incumbent on the assessee‟s part only to file all the relevant details of the said expenditure. Faced with this situation, I deem it appropriate to restore the instant issue back to the Assessing Officer for his fresh computation subject to the condition that it shall be the assessee‟s bounden duty only to provide all necessary details u/s 57(iii) of the Act within three effective hearings as per law. Ordered accordingly. 6. This assessee‟s appeal is partly allowed for statistical purposes in above terms. Order pronounced in the open Court on this 11 th August 2022. Sd/- (SATBEER SINGH GODARA) JUDICIAL MEMBER Pune; Dated, this 11 th day of August 2022 Ankam 3 ITA No. 83/PUN/2020 Amar Ambience Sah. Griha A,Y. 2014-15 Copy of the Order forwarded to : 1. The Appellant. 2. The Respondent. 3. The Pr. CIT - 4, Pune 4. The CIT(A)-5 Pune 5. The SMC Bench, ITAT Pune. 6. Guard File BY ORDER, Sr. Private Secretary ITAT, Pune. 4 ITA No. 83/PUN/2020 Amar Ambience Sah. Griha A,Y. 2014-15 Date 1 Draft dictated on 02-08-2022 Sr.PS 2 Draft placed before author 05-08-2022 Sr.PS 3 Draft proposed and placed before the second Member JM/AM 4 Draft discussed/approved by second Member AM/JM 5 Approved draft comes to the Sr. PS/PS Sr.PS/PS 6 Kept for pronouncement on 11-08-2022 Sr.PS/PS 7 Date of uploading of order 11-08-2022 Sr.PS/PS 8 File sent to Bench Clerk 11-08-2022 Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order