HILL PROPERTIES LTD, MUMBAI V. ITO 5(1)(4), MUMBAI

ITA 101/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7880 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 10-03-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 06-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY ATRI
• Assessee Lawyers: F V IRANI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, H, MUMBAI BEFORE SHRI R V EASWAR, PRESIDENT AND SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER I T A NO: 101/MUM/2010 (ASSESSMENT YEAR: 2006-07) HILL PROPERTIES LIMITED, MUMBAI APPELLANT (PAN: AABCH7578L) VS INCOME TAX OFFICER 5(1)(4), MUMBAI RESPONDENT APPELLANT BY: SHRI F V IRANI RESPONDENT BY: SHRI AJAY ATRI O R D E R R V EASWAR, PRESIDENT: IN THIS APPEAL BY THE ASSESSEE WHICH RELATES TO TH E ASSESSMENT YEAR 2006-07, THERE ARE ONLY TWO GROUNDS . THEY ARE AS UNDER: - 1. THE COMMISSIONER OF INCOME-TAX (APPE ALS) 9, MUMBAI [CIT(A)] ERRED IN UPHOLDING THE ADDITION OF NOMINEE OCCUPANCY CHARGES OF ` 3,72,000 RECEIVED FROM MEMBERS, ON THE GROUND THAT THE SAME IS NOT EXEMPT UNDER MUTUALITY. THE APPELLANTS SUBMIT THAT ABOVE NOMINEE OCCUPANCY CHARGES ARE EXEMPT ON THE GROUND OF MUTUALITY AND THEREFORE SHOULD NOT BE INCLUDED IN THE TOTAL INCOME. 2. THE CIT(A) ERRED IN UPHOLDING THE AD DITION OF INTEREST INCOME OF ` 12,01,814 [I.E. ON (I) FIXED DEPOSITS WITH BANK ( ` 11,76,165), (II) ICICI BONDS ( ` 17,439) AND (III) BEST DEPOSIT ( ` 8,210)], ON THE GROUND THAT SAME IS NOT EXEMPT UNDER MUTUALITY. THE APPELLANTS SUBMIT THAT ABOVE INTEREST INCOME IS EXEMPT ON THE GROUND OF MUTUALITY AND THEREFORE SHOULD NOT BE INCLUDED IN THE TOTAL INCOME. ITA NO: 101/MUM/2010 2 2. BOTH THE GROUNDS ARE COVERED BY EARLIER ORDERS O F THE TRIBUNAL IN THE ASSESSEES OWN CASE. THE FIRST GRO UND IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL DATED 16 TH JULY 2010, IN ITA NOS: 6223 & 6249/MUM/2009, FOR THE ASS ESSMENT YEAR 2005-06. THE ISSUE IS DEALT WITH IN THIS ORDER IN PARAGRAPH 15 THEREOF. IT HAS BEEN OBSERVED IN THE SAID ORDER TH AT THE ASSESSMENT OF THE NOMINEE OCCUPANCY CHARGES WAS NOT JUSTIFIED AND IN COMING TO THIS CONCLUSION THE TRIBUNAL HAS FOLLOWED THE JU DGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF MITTAL COU RT PREMISES CO-OPERATIVE SOCIETY LTD. VS. ITO (2009) 184 TAXMAN 292 (BOM). IN THIS JUDGMENT IT HAS BEEN HELD THAT THE NOMINEE OCCUPANCY CHARGES ARE EXEMPT FROM TAXATION ON THE PRINCIPLE O F MUTUALITY. RESPECTFULLY FOLLOWING THE JUDGMENT OF THE HIGH COU RT AND THE ORDER OF THE TRIBUNAL CITED ABOVE, WE DECIDE THE FIRST GR OUND IN FAVOUR OF THE ASSESSEE AND ALLOW THE SAME. 3. AS REGARDS THE SECOND GROUND, THERE ARE TWO ORDE RS OF THE TRIBUNAL IN THE ASSESSEES OWN CASE, IN WHICH THE I SSUE HAS BEEN DECIDED IN ITS FAVOUR. THE FIRST ORDER IS DATED 3 RD AUGUST 2009, IN ITA NO: 2991/MUM/2008 AND CO NO: 137/MUM/2008, FOR THE ASSESSMENT YEAR 2004-05. IN THIS ORDER THE ISSUE I S DEALT WITH IN PARAGRAPHS 3 TO 6. IT HAS BEEN HELD THAT IN THE CA SE OF A CO- OPERATIVE HOUSING SOCIETY, THE INTEREST EARNED FROM THE BANKS, BONDS, ETC. ON THE SURPLUS FUNDS IS NOT LIABLE TO T AX AND IN COMING TO THIS CONCLUSION THE TRIBUNAL HAS RELIED ON ITS EARL IER ORDER IN THE CASE OF BOMBAY GYMKHANA LTD., IN ITA NO: 249/MUM/20 07, DATED 31 ST OCTOBER 2007, FOR THE ASSESSMENT YEAR 2003-04. IN RESPECT OF ITA NO: 101/MUM/2010 3 THE ASSESSMENT YEAR 2005-06, THE ISSUE HAS BEEN DEC IDED AGAIN IN FAVOUR OF THE ASSESSEE FOLLOWING THE ORDER OF THE T RIBUNAL FOR THE ASSESSMENT YEAR 2004-05. WE ALSO FIND REFERENCE IN THIS ORDER TO THE JUDGMENT OF THE DELHI HIGH COURT IN THE CASE OF DIT (EXEMPTIONS) VS. ORIENTAL BANK OF COMMERCE WELFARE SOCIETY (2003) 130 TAXMAN 575 (DEL) AND THE JUDGMENT OF THE KARNATAKA HIGH COURT IN THE CASE OF CANARA BANK GOLDEN JUBILE E STAFF WELFARE FUND VS. DCIT (2008) 222 CTR 286 (KAR). RE SPECTFULLY FOLLOWING THE ORDERS OF THE TRIBUNAL IN THE ASSESSE ES OWN CASE FOR THE ASSESSMENT YEARS 2004-05 AND 2005-06 AS ALSO TH E JUDGMENTS OF DELHI AND KARNATAKA HIGH COURTS CITED THEREIN, W E DECIDE THIS GROUND ALSO IN FAVOUR OF THE ASSESSEE AND ALLOW THE SAME. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED WITH NO ORDER AS TO COSTS. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH MARCH 2011. SD/- SD/- (PRAMOD KUMAR) (R V EASWAR) ACCOUNTANT MEMBER PRESIDENT MUMBAI, DATED 18 TH MARCH 2011 SALDANHA COPY TO: 1. HILL PROPERTIES LIMITED HILL PARK ESTATE, A G BELL ROAD MALABAR HILL, MUMBAI 400 006 2. ITO 5(1)(4), MUMBAI 3.CIT-5, MUMBAI 4. CIT(A)-9, MUMBAI 5.DR H BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI