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2014 (4) TMI 350 - AT - Income TaxClaim of exemption from tax – Interest earned on fixed deposits – Principle of mutuality – Held that:- The decision in CIT Vs. Secunderabad Club [2011 (8) TMI 752 - Andhra Pradesh High Court] followed – if an incorporated entity is engaged in trade, the profit from it, even if they are transactions with members, would be taxable and the principle of mutuality would have no application – the interest income earned from deposits with member banks is taxable in the hands of the assessee – Decided against Assessee. Exemption from rental income – Principle of mutuality – Held that:- The AO has simply added the rental income without any discussion on the issue - It is also not discernible under what head he has assessed the rental income - CIT(A) rightly held that the rental income like interest income from corporate members cannot be exempt on principles of mutuality - but the assessee contended that once it is treated as rental income, it should be coming under the head ‘income from house property and, consequentially, the deduction available u/s 24 of the Act has to be allowed to the assessee – thus, rental income derived has to be assessed under the head ‘income from house property’ - Once it is assessed as income from house property, the assessee is eligible for deduction u/s 24 of the Act – Decided partly in favour of Assessee. Claim of set off - Operational loss to be set off against other income – Held that:- As decided in assessee’s own case, it has been held that, Section 71 allows set off of loss under any head of income, other than capital gains, against income assessable for that assessment year under any other head - Only restriction is that, there should not be any income under the head capital gains - if the assessee has sustained loss underany head, except capital gains, and the assessee has no income from capital gains during the year, then loss can be set off against income assessable under any other head – the assessee has not raised this issue before the first appellate authority – thus, the matter is remitted back to the CIT(A) for adjudication – Decided in favour of Assessee.
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