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TMI Blog2024 (2) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... re by the assessee has a direct nexus with the amount/common fund collected by the members of the society and the same which was kept in the Bank as Fixed Deposit. From the perusal of records, it appears that the said deposits as well interest derived thereon is directly used for the maintenance and upkeepment of the society. Therefore, the assessee has rightly set off the same against the income of the assessee society. AO as well as the CIT(A) has not justified in disallowing the same. The decision of Hon ble Supreme Court in case of Secunderabad Club [ 2023 (8) TMI 925 - SUPREME COURT] is applicable in the present case. Thus, the appeal of the assessee is allowed. - Ms. Suchitra Kamble, Judicial Member For the Assessee : Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntenance of the society. 3.1 The Id. AO has erred in charging tax on the assessed income at maximum marginal rate instead of the normal rate as applicable to individual. The NFAC has failed to deal with this ground. 3.2 The Id. NFAC ought to have appreciated that in view of the decision of Hon'ble Supreme Court in case of Secundrabad Club [CIVIL APPEAL NO(S).5195-5201 of 2012 ] the net interest income earned from investment of funds with outside third parties was chargeable to tax and that too at normal rate. It is therefore prayed that the disallowance of expenses of Rs. 55,34,578/- made by the AO should be deleted. 3. The assessee is a Co-operative Housing Society duly registered under the Gujarat Co-operative Soci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her sources, therefore, the same was disallowed under Section 57 of the Act amounting to Rs. 6,14,440/-. 4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that the assessee s society is established to provide plots, common amenities such as street light, tube well, water pipelines, common garden, security services etc. Therefore, in order to maintain and upkeep the common amenities provided to its members, the maintenance contribution is collected and kept in deposit with Bank till the same is utilised. The assessee society, therefore, has fixed deposits with SBI which yield interest income and also utilised for common benef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue has allowed the same 6. The Ld. DR relied upon the Assessment Order and the order of the CIT(A). 7. Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the expenses/expenditure by the assessee has a direct nexus with the amount/common fund collected by the members of the society and the same which was kept in the Bank as Fixed Deposit. From the perusal of records, it appears that the said deposits as well interest derived thereon is directly used for the maintenance and upkeepment of the society. Therefore, the assessee has rightly set off the same against the income of the assessee society. The Assessing Officer as well as the CIT(A) has not justified in disallowing the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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