THE UNIWORLD GARDEN APARTMENT OWNERS ASSOCAITION,GURGAON vs. ITO, WARD-4(4), GURGAON

1. in the assessee-society amount to its income and be taxed as income from other sources as per the provisions of the income tax Act, 1961? 2.) Whether the principle of mutuality can be made applicable to fund deposited in the bank which is not a member of the Assessee- society, especially when fund is raised from contribution of several members excluding bank and the interest derived from it is utilized by the several members of assessee-society? 3.) Whether the Learned CIT(A) has erred in upholding the order of A.O. that the interest of Rs.5,73,968/- on the amount deposited in the banks and Rs. 1,54,343/- income from advertisement are not covered by the principle of mutuality which is without appreciating the correct facts and law of the Income Tax Act, 1961? 4.) Whether the Learned CIT(A) has failed to appreciate the Judgment of the Hon’ble Delhi High Court in the case of Director of Income Tax Vs. All India Oriental Bank Of Commerce Welfare Society, Page | 1 (2003) 130 Taxman 575, 577 (Delhi) applying Chemsford Club Vs. CIT, (2000) 243 ITR 89(SC)? 5.) Whether the Learned CIT(A) has failed to appreciate that the mandate of the assessee welfare society is a question of fact and which can only be determined from the memorandum or articles of association, rules of membership, rules of the organization, etc ? 6.) Whether the Learned CIT(A) as well as Id. A.O. has construed the mandate of the assessee welfare society myopically dehors the facts and intentions of the assessee-society. 7.) Whether the Id. CIT(A) as well as Id. A.O. has misconstrued and wrongly applied the ratio of the apex court judgment ‘‘Banglore Club Vs. CIT & Anr [2013] 350 ITR 509 (SC) in the facts and circumstances of the assessee-society case?”

The brief facts of the case shows that assessee is a resident welfare society showing receipts from its resident and expenditure incurred for the benefit of the members of the society. The entire receipts have been shown as income from other sources and expenditure is been debited under section 57 of the income tax act 1961. The assessee furnished income and expenditure statement on claim that the income is exempt on the concept opportunity. The assessee filed its return of income on 30/9/2014 declaring nil income.

During the assessment proceedings the learned assessing officer noted that assessee has received interest unfixed deposit receipt of rupees for 01000/–, interest on savings bank account of ₹ 1 72986/– and advertisement income of ₹ 1 54343/–. Therefore according to the learned assessing officer total income received of ₹ 728329/– is not eligible under the concept of mutuality and not taxable in view of the decision of the honourable Supreme Court in case of CIT versus Bangalore club 350 ITR 509. Therefore the assessment order under section 143 (3) of the income tax act 1961 was passed on 24/10/2016 determining the total income of the assessee at ₹ 7 20 8330/–.

The assessee challenged the assessment order before the Commissioner of income tax (appeals) – 1 Gurugram, would dismiss the appeal of the assessee. Assessee aggrieved with the order of the learned commissioner of income tax appeals has preferred appeal before us.

We have heard the rival contentions and perused the orders of the lower authorities. The claim of the assessee is that the above income is not Page | 2