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TMI Blog2024 (9) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... -. Thus the income earned from various sources have been spent for the maintenance and up-keepment of the residential premises of Venus Parkland . Thus the interest income earned from fixed deposits is directly linked with the activity of maintenance of the Society. Further this interest income certainly reducing the burden of contribution for maintenance by the Member of the Society. Therefore, no justification by the Lower Authorities denying the benefit to the assessee simply on the ground that the assessee shown the Bank interest income under other sources . Therefore the assessee Society has rightly set off the interest income against the income of the assessee Society. Thus the addition made on this account is liable to be deleted. Thus addition on account of interest income earned on fixed deposits from Banks and rental income earned by the Society are eligible to set off of maintenance expenses. Ground allowed in favour of assessee. Non granting standard deduction u/s. 80P(2)(c)(ii) - Since the assessee being a housing co-operative society shown net surplus of Rs. 4,64,486/- in its Profit and Loss account after netting out all the maintenance expenses, the assessee is eligi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the same amount of income was utilized in claiming expenses amounting to Rs. 1,36,99,099/- under section 57 of the Income Tax Act. The interest income earned by the assessee society has been shown under the head Income from Other Sources under Section 56 of the Act, and against this income, as per the provisions of section 57 of the Act, deduction of only those expenses are allowable, which are directly linked to the earning of the said income. In the instant case of the assessee society, no expenditure was spent wholly and exclusively for purpose of earning such interest income, hence, expenses/deduction claimed by the assessee are not allowable to the extent of the above heads of income. 3.1. Regarding assessee s submission on not given deduction u/s 80P of Rs. 50,000/-, the Ld. CIT(A) held that considering the facts of the case and position of law as contained in section 80P(2)(c), since the assessee had shown income under the head 'income from other source' is not entitled to claim deduction amounting to Rs. 50,000/- u/s.80P(2)(c)(ii) and the ground of appeal is dismissed. Thus the disallowance of expenditure claimed by the assessee as per the provisions of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee in the year under consideration stands at Rs. 4,64,486/- only and therefore, income assessed at Rs. 24,71,130/- vide para 4.10 5 of the assessment order is not justified. According to the assessee, the A.O. ought to have assessed income applying principles of real income theory. The income under any circumstances ought not to have assessed on and above Rs. 4,64,486/- in the hands of the assessee qua assessment year under reference. In relation to Ground No. 2 Ld. Counsel submitted that share of the each member of the Society is specific and identifiable in the property of the Society and therefore, income earned by the Society is entitled to exemption applying Principles of Mutuality. Ld. Counsel further submitted that the surplus earned on account of interest on FDRs would not be entitle to exemption under the concept of mutuality, as this amount is not refundable to the member under any circumstances and cannot be claimed by its members. By referring to Section 80P (2)(c)(ii), assessee contended that while assessing income of the assessee, the A.O. ought to have granted standard deduction of Rs. 50,000/- in terms of provisions of section 80P(2) (c) (ii) of the Act which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration, income earned by way of interest on bank Fixed Deposits as well as Rent Receipt charges on Community Hall Charges, Festival Charges Income, Other Misc. Income have been applied for the maintenance of the property namely Electrical Expenses, House Keeping Charges, Repair Maintenance of Bore well, Lift Maintenance, Road Repairing Expenses, Repairing and Maintenance of Plumbing works, Security Charges, Water Tank Cleaning expenses, etc. for the residential property of Venus Parkland . Thus the net surplus shown by the assessee is Rs. 4,64,486/-. Thus the income earned from various sources have been spent for the maintenance and up-keepment of the residential premises of Venus Parkland . Thus the interest income earned from fixed deposits is directly linked with the activity of maintenance of the Society. Further this interest income certainly reducing the burden of contribution for maintenance by the Member of the Society. Therefore, we do not find any justification by the Lower Authorities denying the benefit to the assessee simply on the ground that the assessee shown the Bank interest income under other sources . Therefore the assessee Society has rightly set off the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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