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TMI Blog2014 (4) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... on both the grounds of appeal was rejected - The assessee has however, modified the bye-laws by adding clause 9 (A) referred to above which was accorded sanction by Director of Sugar, Gandhinagar and accordingly it was put in form No.4 also – the papers were not before the AO for consideration –The issue of mutuality is primarily restored to the file of AO for Asst. Years 2003-04 to 2005-06 - then following the same the issues arising in Asst. Year 2006-07 are required to be remitted back to the AO for fresh adjudication after considering the amendment in the constitution, whether it is a retrospective and accordingly it would be applicable to earlier years – Decided in favour of assessee. - ITA No. 242/Ahd/2011 - - - Dated:- 4-4-2014 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en allowed in this assessment year. 5.2 The C.I.T.(Appeals) ought to have appreciated that there was no dispute as to the allowability of the expenditure incurred on research and development, and hence, erred in disallowing the same. 3. At the outset, the Ld. AR of the assessee by filing order of this Tribunal in the case of assessee itself for Assessment Year 2006-07 in ITA No. 3427/Ahd/2009 alongwith CO No. 15/Ahd/2010 order dated 25.03.2011 submitted that on similar issues in the immediately proceeding Assessment Year 2006-07 the Tribunal has restored the matter back to the file of the Assessing Officer for adjudication afresh as per the direction of the Tribunal in the order passed for Assessment Year 2006-07. He, therefore, praye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the addition of Rs.38,200/- out of the overall income of rs.2,41,414/- arising from rest house. (2) The CIT(A) erred in not allowing the expenditure incurred for maintenance of rest house, the income from which was exempt under mutuality and as has been so allowed by the CIT(A). (3) The CIT(A) erred in taxing the rental income from property given on rent instead of considering it to be exempt income under the concept of mutuality as the moneys to construct the property were contributed by the members of the Federation and the income therefrom was applied for the members only. (4) The CIT(A) erred in not allowing the overall expenditure incurred for the purpose of earning such income. (5) The CIT(A) erred in upholding the disall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Liquidator, remaining property/assets can be distributed amongst Institutional Members i.e. member sugar factories, there is no provision in by-laws of the Federation. The Executive Body meeting of this Federation which was held on 22.06.2010 vide Resolution No.12 proposed to General Body and hence it has been unanimously decided to make provision in by-laws of this Federation as indicated below: 9(A) In case of liquidation of the Federation, after clearance of al outstanding dues/liabilities by the Liquidator, remaining property/assets will be distributed amongst institutional members i.e. member sugar factories in proportion of financial contribution made by them. On the basis of above resolution it was pleaded that the object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o objection for restoring the matter to the file of the AO on both the grounds of appeal. Accordingly, the orders of the authorities are set aside and both the grounds are restored to the file of the AO for reconsideration in the light of the documents now placed on record by the learned Counsel for the assessee above. The AO shall pass reasoned order by giving reasonable sufficient opportunity of being heard to the assessee. In the result, appeal of the revenue in ITA No.1129/Ahd/2007 for assessment year 2003-04 is allowed for statistical purposes. 8. The learned CIT(A) followed the same order in the remaining assessment years 2004-05 and 2005-06. By following the order in assessment year 2003-04, the remaining orders of the authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 263 (Kar) wherein it is held that income from deposits in bank from mutual concerns is taxable as income. 8. We have heard the rival parties. Since the issue of mutuality is primarily restored to the file of AO for Asst. Years 2003-04 to 2005-06 then following the same the issues arising in Asst. Year 2006-07 are required to be restored to the file of AO for deciding afresh after considering the amendment in the constitution, whether it is a retrospective and accordingly it would be applicable to earlier years and if the assessee is held to be a mutual concern in this year then further, whether interest income or income from house property as claimed by the assessee would be exempt on account of principle of mutuality. In our considered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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