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

ITA 84/PUN/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 2101 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 21-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “SMC”, PUNE BEFORE SHRI S. S. GODARA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.84/PUN/2020 िनधाᭅरण वषᭅ / Assessment Year: 2015-16 Amar Ambience Sahkari Gruhrachna Sanstha Maryadit, Sr. No.61/46/461/ 3A 3B, Ghorpadi, Pune- 411001. PAN : AABAA5618G Vs. ITO, Ward-7(1), Pune. Appellant Respondent आदेश / ORDER PER S. S. GODARA, JM: This assessee’s appeal for assessment year 2015-16 arises against the CIT(A)-5, Pune’s order dated 03.10.2019 passed in case no.PN/CIT(A)-5/ITO, Ward 7(1), Pune/10202/2017-18 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 learned CIT(A) erred in law and on facts in confirming the total income of the appellant at Rs. 31,18,830/- instead of the returned income of Rs. 5,34,820/-. Assessee by : Shri Kishor B. Phadke Revenue by : Shri M. G. Jasnani Date of hearing : 28.07.2022 Date of pronouncement : 28.07.2022 ITA No.84/PUN/2020 2 2. The learned CIT(A) erred in law and on facts in not appreciating that the interest of Rs. 25,84,008/-, on deposits with nationalized banks, are covered under the concept of "mutuality" and hence not taxable. 3. The learned CIT(A) ought to have appreciated that the majority of interest received from nationalized banks was generated out of the fixed deposits created from the members' contribution of one-time maintenance deposits; and as such, was utilized 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. 4. Without prejudice to the above ground no. 2 and 3 above, the learned 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.” 3. Learned counsel vehemently contended that both the lower authorities have erred in law and on facts in denying mutuality benefit qua assessee’s fixed deposits made in nationalized banks resulting in interest income of Rs.25,84,008/- in issue. This assessee’s stand hardly carries any merit as hon’ble apex court’s landmark decision in Bangalore Club vs. CIT (2013) 350 ITR 509 (SC) has denied the very mutuality benefit claimed against interest income derived from such fixed deposits kept with non-members’ banks. The impugned disallowance stands upheld in principle therefore. 4. The fact also remains that once the learned lower authorities have invoked section 57 of the Act for assessing the assessee’s interest income under the last head of income from “other” sources, they ought to have considered sub-section (iii) thereof to compute the corresponding interest expenditure; if any. Faced with this ITA No.84/PUN/2020 3 situation, learned counsel undertook to file all necessary details in case the assessee is granted yet another innings before the Assessing Officer. I order accordingly and make it clear that it shall be bounden duty of the assessee only to file and prove all the details of its interest expenditure before the Assessing Officer in three effective opportunities of hearing. No other ground or argument has been pressed during the course of hearing. 5. This assessee’s appeal is partly allowed for statistical purposes in above terms. Order pronounced on this 28 th day of July, 2022. Sd/- (S. S. GODARA) JUDICIAL MEMBER पुणे / Pune; ᳰदनांक / Dated : 28 th July, 2022. Sujeet (DOC) आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A)-5, Pune. 4. The Pr. CIT-4, Pune. 5. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “SMC” बᱶच, पुणे / DR, ITAT, “SMC” Bench, Pune. 6. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.