Assessee's Appeals Dismissed: Exempt Transfer Fee, Disallow Interest

The delay in filing appeals by the assessee was condoned, and the appeals were admitted for AYs 2007-08 and 2008-09. The transfer fee received by a housing cooperative society was held to be exempt under the principle of mutuality, as per judicial precedents and the society's bye-laws. However, the exemption claimed on interest earned from bank deposits was disallowed, as it did not qualify under the mutuality principle. The appeals by the assessee were dismissed based on these findings.

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Issues:
1. Condonation of delay in filing appeals by assessee.
2. Taxability of transfer fee received by a housing cooperative society.
3. Taxability of interest earned from bank deposits under the principle of mutuality.

Analysis:
1. The assessee filed appeals with a one-day delay, which was condoned after considering the explanation provided. The appeals were admitted for AYs 2007-08 and 2008-09.

2. The Assessing Officer (AO) taxed the transfer fee received by the housing cooperative society, contending that it was not exempt under the principle of mutuality. The AO argued that there was no identity between contributors and participants due to the nature of the transfer fee. However, the CIT(A) and ITAT upheld the exemption based on judicial precedents and the principle of mutuality, emphasizing that the transfer fee collected was in line with the society's bye-laws and did not affect the mutuality principle.

3. The AO disallowed the exemption claimed on interest earned from bank deposits, citing the decision in the Secunderabad Club case. The CIT(A) upheld the AO's decision, stating that interest from bank deposits did not fall under the principle of mutuality. The ITAT concurred, highlighting the distinction between transactions with members and third parties, concluding that interest earned from banks was not eligible for exemption under the mutuality principle. The appeals by the assessee were dismissed based on this analysis.

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