TMI Blog2014 (4) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e first issue raised in Ground Nos. 2 3, which is common in all the three appeals, relates to assessee s claim of exemption from tax on the interest earned on fixed deposits on the principles of mutuality. 3. Briefly the facts are, assessee is a club assessed in the status of AOP. It carries on social activities including sports and recreational events. For the impugned assessment years the assessee filed return of income declaring total income of Rs.39,63,910/- for AY 2008-09, Rs. 3,61,020/- for AY 2009-10 and Rs. 14,20,270/- for AY 2010-11. During the scrutiny assessment proceeding the Assessing Officer noticed that the assessee has received interest from member banks which was not offered to tax in the relevant AYs under considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the issue against the assessee by holding that interest income earned from deposits with member banks is taxable in the hands of the assessee. That being the case, respectfully following the ratio laid down by the Hon ble Jurisdictional High Court in assessee s own case, we uphold the order of the CIT(A) by dismissing the grounds raised by the assessee. 7. The next issue, which is common in all the appeals, is in respect of assessee s claim of exemption with regard to rental income earned on the principles of mutuality. Without prejudice to the claim of exemption made by the assessee, an alternative claim has also been made to treat rental income as income from house property and allow statutory deductions as provided u/s 24 of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we are inclined to accept the alternative claim of the assessee 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. This is because of the fact that neither the Assessing Officer nor the CIT(A) has disputed the fact that rental income from the corporate members is towards use of the premises. It is not the case of the department that the assessee club is exploiting the property commercially. Therefore, 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 Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital gains during the year, then loss can be setoff against income assessable under any other head. However, it appears from the record that assessee has not raised this issue before the first appellate authority. That apart, full fa cts relating to this issue have not been brought on record. It is also submitted by the learned AR that similar issue pertaining to asst. year 1996-97 and asst. years 1998-99 to 2003-04 are pending before the CIT (A) having been remitted by the Incometax Appellate Tribunal. Considering the totality of facts and circumstances of the case, we deem it appropriate to remit this issue to the file of CIT (A) for deciding afresh in consonance with the statutory provisions and only after affording reasonable opport ..... X X X X Extracts X X X X X X X X Extracts X X X X
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