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2022 (12) TMI 1165 - AT - Income TaxAddition of interest from banks on the deposits made by it out of the maintenance deposit/ fund received from its members - obligation on the income earned by the Appellant out of the deployment of the maintenance deposit - assessee as a Trust or Co-operative Society - concept of mutuality - as submitted that the Appellant is required to maintain the society and incur common expense of the society out of the income received from the maintenance deposits, and thus, there is an overriding charge - HELD THAT:- As noted from the Balance Sheet the maintenance deposit is excessively used for maintenance of the residential premises and therefore, the collection of maintenance deposits are kept as fixed deposits in Axis Bank and HDFC Bank. From the sale deed also the said element of maintenance deposits has been collected from the owners of the flat. The decision of the Ahmedabad Tribunal in case of Manekbuag Co-op. Housing Society Ltd. [2010 (3) TMI 1083 - ITAT AHMEDABAD] has clearly given the guidelines that when the main object of the society is to manage, administer, operate, supervise and make available the common facilities and maintains of its members to meet the expense on account of maintenance the housing society collected deposits from its members made deposits and earned interest thereon from banks which is squarely covered by the decision Adarsh Co-operative Housing Society Ltd. [1994 (10) TMI 32 - GUJARAT HIGH COURT] which was cited by the Ld. A.R. at the time of hearing. The decision of Hon’ble Bombay High Court in case of Sind Co-op. Hsg. Society [2009 (7) TMI 15 - BOMBAY HIGH COURT] is squarely applicable in the present case as the income earned by the society on account of interest on Fixed Deposits from its members for the purpose of maintenance will attract the concept of mutuality and accordingly the income will be subject to exemption if any surplus is there. Thus, Ground No. 1 & 2 are allowed.
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