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

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.

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 accounts 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 Officers invoked the ratio laid down by the Hon‟ble 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.