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TMI Blog2012 (11) TMI 1182X X X X Extracts X X X X X X X X Extracts X X X X ..... of mutuality. 2. That on the facts and in the circumstances of the case and in law learned C.I.T.(Appeal) has erred to hold that the loss worked out by the assessing officer amounting toRs.1,079,536/- cannot be set-off against interest income of ₹ 743,306/-. 3. Without prejudice to Grounds of Appeal No.1 and 2, on the facts and in the circumstances of the case and in law learned C.I.T (Appeal) has erred in not appreciating that principle of mutuality cannot be thrust upon the assessee. 2. Assessee filed its return of income on 27-09-2008 declaring income of Rs. NIL. Initially, the case was processed u/s. 143(1) of the Income Tax Act,1961 (Act) later on it was selected for scrutiny and assessment was finalised by the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest income was taxable under the head other sources, that it was not exempt as it was not arising out of mutual activities of the members, that cases relied upon by the assessee were distinguishable on facts, that in the case of CETP Thane Belapur Association Hon'ble Bombay High Court had decided the issue in favour of the department (Bombay High Court ITA No.2060 of 2009), that relying upon the provisions of Section 71 of the Act exempted income /loss from mutual activities could not be adjusted against Income from Other Sources,that ratio of the case of S.S. Thiagarajan (129 ITR 115), delivered by the Hon'ble Madras High Court, squarely applied to the facts of the case. Accordingly, he dismissed the appeal filed by the assessee. He f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isdictional High Court in the case of Common Effluent Treatment Plant (Thane Belapur) Association (5 Taxmann.com 110)was not brought to the notice of the ITAT when the matter of Nagar Lokhanwal Complex was heard. Secondly, AO and the FAA have held that case of CETP (Thane Belapur) Assn. was applicable in the case under consideration. We have not found that they have given any reasoning in their orders for reaching at the conclusion that assessee was carrying out mutual as well as non-mutual activities. In our opinion, in these circumstances, in the interest of justice matter should be restored back to the file of the AO for passing a speaking order. He should afford an opportunity of reasonable hearing to the Assessee. Ground No. 1 is partl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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