2016 (2) TMI 620 - AT - Income Tax

Addition on account of non-occupancy charges - Held that:- The charges are received at the prescribed rates as per the byelaws of the society and are spent for the common purposes of the society for the benefit of the members. In the case of Mittal Court Premises Co-operative Society Ltd. v/s Income Tax Officer [2009 (7) TMI 689 - BOMBAY HIGH COURT] held that the bye-laws themselves provided for non-occupation charges. The contribution, therefore, was by the members for the purpose of mutual benefit. The object of the contribution was the purpose of increasing the society’s funds, which could be used for fulfilling the objects of the society. The object of the society was to provide service, amenities and facilities to its members. In these circumstances, the principle of mutuality would apply and therefore non-occupancy charges were not taxable. In our opinion the case of the assessee case is squarely covered by the aforesaid decision. We, therefore, respectfully following the decision of the Juridictional High Court delete the addition - Decided in favour of assessee

Rejection of claim of the assessee u/s 80(P)(2)(d) - interest on deposits with other Coop. Societies being Coop. Banks. - Held that:- Honble Supreme Court in the case of Totagar’s Co-operative Sale Society Ltd.(2010 (2) TMI 3 - SUPREME COURT ) held that a society has surplus funds which are invested in short term deposits where the society is engaged in the business of banking or providing credit facilities to its members in that case the said income from short term deposits shall be treated and assessed as income from other sources and deduction u/s 80(P)(2)(a)(i) would not be available meaning thereby that deduction u/s 80(P)(2)(a)(i) is available only in respect of income which is assessable as business income and not as income from other sources. Whereas in distinction to this , the provisions of section 80(P)(2)(d) of the Act provides for deduction in respect of income of a coop society by way of interest or dividend from its investments with other coop society if such income is included in the gross total income of the such coop society. In view these facts and circumstances we are of the considered view that the assessee is entitled to the deduction of ₹ 14,88,107/- in respect of interest received/derived by it on deposits with coop. banks and therefore the appeal of the assessee is allowed by reversing the order of the CIT(A) - Decided in favour of assessee