Venus Parkland Co-Op. Housing Service Society Ltd Vs ITO (ITAT Ahmedabad)
ITAT Ahmedabad held that addition on account of interest income earned on fixed deposits from Banks and rental income earned by the Society are eligible to set off of maintenance expenses. Thus, addition deleted.
Facts- The assessee is Co-operative Housing Service Society formed for the purpose of maintenance and upkeepment of the residential apartment ‘Venus Parkland’. For the Asst. Year 2018-19, assessee filed its Return of Income on 23.07.2018 declaring Nil Income. The return was taken up for scrutiny assessment and made addition of Rs.24,71,127/- namely fixed deposit interest income of Rs.24,31,919/-, Rental Income of Rs.35,041/- and Interest on Income Tax refund of Rs.4,167/-.
The disallowance of expenditure claimed by the assessee as per the provisions of section 57 of the Act, against interest income earned from FD as made in the assessment order was confirmed by the Ld. CIT(A). Being aggrieved, assessee preferred the present appeal.
Conclusion- The interest income earned from fixed deposits is directly linked with the activity of maintenance of the Society. Further this interest income certainly reducing the burden of contribution for maintenance by the Member of the Society. Therefore, we do not find any justification by the Lower Authorities denying the benefit to the assessee simply on the ground that the assessee shown the Bank interest income under “other sources”. Therefore the assessee Society has rightly set off the interest income against the income of the assessee Society.
