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2015 (2) TMI 1023 - AT - Income TaxRevision u/s 263 by DIT(E) - Benefit of mutuality given to the assessee - assessee charged only interest income instead of taxing the whole excess of income over expenditure and this mistake resulted in under assessment of income of ₹ 1,06,10,312/- as held by CIT(A)- Assessee Society is registered under section 12A - Held that:- AO has made the detailed enquiries on the issue of ‘principle of mutuality’ and passed the order dated 13.12.2011 u/s. 143(3) of the I.T. Act. Therefore, the assessment order dated 13.12.2011 passed u/s. 143(3) is not erroneous at all and the Ld. DIT(E) has passed the impugned order dated 28.3.2014 contrary to the law and facts on record, which is not sustainable in the eyes of law. The Audit Officer raised the objection on 2.5.2012 on the benefit of mutuality to the assessee and charging only interest income instead of taxing the whole income and in response to the audit objection, the AO vide his reply dated 18.12.2012 to the Sr. Audit Officer regarding the ‘principle of mutuality’ and supported the assessment order dated 13.12.2011 by stating that all received of money from members should go for the maintenance of super-structure, the surplus arising after meeting the administrative expenses has naturally be transferred to the account of the Institution Members, because it belongs to the Members. He further replied that it is the Institution Members who had contributed towards the cost of the assessee or any service or some time deficit will also be to the account of the members. This is a settled principle behind the mutuality concept and lastly Dy. DIT(E) Circle-1, New Delhi vide his reply dated 10.1.2014 to the Director of Income Tax (E), Delhi. The reply to the DIT(E) establish that the revenue authority itself supported the order of the AO dated 13.1.22011 passed u/s. 143(3) of the I.T. Act. In our considered opinion, when two views are possible and the AO has taken one of the possible view, then the provisions of section 263 of the I.T. Act will not apply. Therefore, in the present case the same facts and circumstances are applicable. We are of the view that ld. DIT(E) has passed the impugned order by taking his own view which is contrary to the various decision rendered by the Hon’ble Supreme Court of India in the case of Malabar Industrial Co. Ltd. vs. CIT (2000 (2) TMI 10 - SUPREME Court) and CIT vs. Max India Ltd.(2007 (11) TMI 12 - Supreme Court of India). - Decided in favour of assessee.
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