Case Number: ITA 1038/DEL/2021
Appellant: Galleria Condominium Association, Gurgaon
Respondent: Income Tax Officer, Ward-1(5), Gurgaon
Assessment Year: 2009-10
Result: 2009-10
Case Filed on: 2021-08-31
Order Type: Final Tribunal Order
Date of Order: 2022-02-21
Pronounced on: 2022-02-21
The case of Galleria Condominium Association, Gurgaon versus Income Tax Officer, Ward-1(5), Gurgaon revolves around the reassessment proceedings and the disallowance of interest income under the principle of mutuality for the assessment year 2009-10. The appellant, Galleria Condominium Association, challenged the reassessment initiated under section 147 and the subsequent disallowances made by the Assessing Officer (AO).
Galleria Condominium Association, a resident welfare organization, faced reassessment proceedings for the assessment years 2009-10, 2010-11, and 2011-12. The AO initiated the proceedings under section 147/148 based on information that the appellant had earned interest income, rental income, and professional fees that were not offered for taxation. The AO made disallowances and assessed additional income for these years.
The grounds raised by the appellant for the assessment year 2009-10 were as follows:
1. The assessment order is illegal, invalid, and void.
2. The reasons recorded under section 147 were based on suspicion without tangible material suggesting escapement of income.
3. The AO disallowed the claim of interest income under section 80P(2)(d) on the basis of mutuality.
4. The AO incorrectly computed additional income as house property income instead of recognizing it under mutuality.
5. The AO failed to consider tax deducted at source (TDS) and self-assessment tax paid by the appellant.
The Tribunal reviewed the submissions and materials on record. The appeals for assessment years 2009-10, 2010-11, and 2011-12 were filed with significant delays, which were condoned due to the disputes and management issues faced by the appellant.
For the assessment year 2009-10, the AO had noted interest income of Rs.2,91,155/-, rental income of Rs.7,56,370/-, and professional fees of Rs.5,727/- that were not offered for taxation. The AO disallowed these incomes under mutuality and added them to the appellant’s taxable income.
The Tribunal found that the AO and CIT(A) did not properly address the principle of mutuality or the appellant’s claims for proportionate expenses. The Tribunal also noted that the appellant’s case was not adequately represented due to internal disputes and lack of cooperation from the previous management.
The Tribunal decided to remand the case back to the AO for fresh assessment. The AO was directed to reconsider the appellant’s claims under mutuality and allow for proper representation and substantiation of expenses by the appellant.
In conclusion, the ITAT, Delhi Bench, provided a fair judgment by remanding the case back to the AO for fresh assessment, ensuring that the appellant’s claims under the principle of mutuality and the disallowance of interest income were adequately addressed for the assessment year 2009-10.
Pronounced in the open court on 21st February 2022.
Signed:
(AMIT SHUKLA)
Judicial Member
Dated: 21st February 2022
Copy forwarded to:
Asstt. Registrar, ITAT, New Delhi
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