2011 (9) TMI 1221 - AT - Income Tax

Summary

Issues involved: Assessment u/s 143(3) for AY 2004-05 - Transfer fees exemption under mutuality principle - Non-occupancy charges exemption under mutuality principle - Interest received from bank exemption under mutuality principle.

Transfer fees issue: The Assessing Officer challenged the deletion of transfer fees addition based on the principle of mutuality, citing a Bombay High Court judgment. ITAT Mumbai upheld the CIT(A)'s decision, noting consistency with previous rulings and the principle of mutuality, thus dismissing the first ground of appeal.

Non-occupancy charges issue: The Assessing Officer disputed the deletion of non-occupancy charges addition, claiming exemption under the mutuality principle. ITAT Mumbai referred to a Bombay High Court judgment and Tribunal decisions, supporting the CIT(A)'s decision to delete the addition, based on the mutuality principle, thereby dismissing the second ground of appeal.

Interest received from bank issue: The Assessing Officer contested the deletion of interest received from bank addition, seeking exemption under the mutuality principle. ITAT Mumbai upheld the CIT(A)'s decision, referencing a Tribunal case, and concluded that the interest earned was used to reduce maintenance expenses, not distributed to society members, thus exempt under the mutuality principle, leading to the dismissal of the third ground of appeal.

In conclusion, the appeal was dismissed by ITAT Mumbai on 7th September 2011.