2025 (3) TMI 2138

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.... Rs. 2,47,54,352/- made by the Ld. AO invoking provisions of section 57(iii) of the Act. The Ld. Council for the assessee submitted that it is a resident welfare association registered as society under the laws of Haryana. During the year assessee had earned interest income of Rs. 2,47,54,352/- on FD's with banks, which, as per its bylaws, was distributed amongst the members. The Ld. AO, analyzing, the principles of mutuality, premised that the impugned address was liable to be taxed as income of the assessee as under section 56 as income from other sources of Act. While doing so the Ld. AO relied upon the decision of Bangalore Club vs CIT of the Hon'ble apex court, 350 ITR 509. The Ld. First Appellate Authority relying upon the decision of....

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....2018 Belaire Condominium Association IBMS interest received from bank for F.Y. 2013-14 Interest Received during the F.Y. 2013-14 From ICICI Bank on FD 61,15,418/- From Kotak Mah. Bank on FD 99,83,136/- From ICICI Bank on Saving A/c 1,27,869/- From Kotak Mah. Bank on Saving A/c 2,15,710/- Total interest Received for the F.Y. 2013-14 1,64,42,133/-. 6. The assessing officer during the course of the assessment raised the issue that the interest received by the assessed, society is not exempt as the same is not covered by the Principle of mutuality in view of the judgment of the Supreme Court in the case of Bangalore Club vs. CIT (2013) 350 ITR 509 (SC). In this explanation, it was contended by the assessee that the interest income is o....

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....e society. As rightly pointed out by the learned AR that the assessee society has obtained the interest bearing maintenance security called IBMS from the flat owners and such security deposit has been deposited with the Bank on which interest has been earned. Thus, there is a direct nexus in earning interest on such fixed deposit with Bank and payment of interest on the security deposit to the flat owners. The interest expenditure has been incurred wholly and exclusively for earning such interest income on Bank deposit. As per the Apartment buyers agreement there is an obligation on every buyer to make security deposit and there is corresponding obligation on the society to pay interest on such deposit. Thus, the contention of the learned A....