SAI APARTMENTS CO- OPERATIVE HSG SOCIETY LTD, MUMBAI V. ITO 20(3)(3), MUMBAI

ITA 1375/MUM/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62363 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 29-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARASARTH NAIK
• Assessee Lawyers: B N RAO

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH: MUMBAI BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.1375/MUM/2012 (ASSESSMENT YEAR: 2005-06) M/S. SAI APARTMENTS CO-OPERATIVE HOUSING SOCIETY LIMITED, J.P. ROAD, OPP. PRATAP SOCIETY, 7 BUNGALOWS, ANDHERI WEST, MUMBAI -400 058 ...... APPELLANT VS INCOME-TAX OFFICER- WARD 20(3)(3), BANDRA KURLA COMPLEX, BANDRA WEST, MUMBAI ..... RESPONDENT PAN: AAAAS 6137 P APPELLANT BY: SHRI B.N. RAO RESPONDENT-REVENUE BY: SHRI PARASARTH NAIK DATE OF HEARING: 03.05.2012 DATE OF PRONOUNCEMENT: 09.05.2012 O R D E R R.S. PADVEKAR, JM: IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE IMPU GNED ORDER OF THE LD. CIT (A)-31, MUMBAI DATED 10.01.2012 FOR THE A.Y. 2005-06. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND: ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT (A)-31 ERRED IN CONFIRMING THE DECISION OF THE AO THAT TRANSFER CHARGES CHARGED BY THE SOCIETY WERE CHARGE ABLE TO TAX IN THE HANDS OF THE APPELLANT. HE ERRED IN NOT APPRECIATING THE CONCEPT OF MUTUALITY AND FURTHER T HE RATIO OF THE TRIBUNAL DECISIONS IN THE MATTER. 2. THE SHORT ISSUE IN CONTROVERSY IS THE ADDITION O F ` 1,40,200/- IN RESPECT OF TRANSFER FEES. THE ASSESSEE IS A HOU SING CO-OPERATIVE SOCIETY. THE ASSESSEE SOCIETY RECEIVED ` 1,14,200/- BY THE TRANSFER ITA NO.1375/MUM/2012 SAI APARTMENTS CO-OPERATIVE HOUSING SOCIETY LIMITED 2 FEE FROM THE MEMBER SELLING THE FLATS. THE ASSESS EE CLAIMED THAT THE TRANSFER FEE RECEIVED BY THE ASSESSEE CANNOT BE B ROUGHT TO TAX UNDER THE PRINCIPLES OF MUTUALITY. THE A.O. HAS OBSERV ED THAT AS PER THE BYELAWS OF THE SOCIETY, THE TRANSFER FEE PRESCRIBED IS ` 500/- AND HENCE, BEYOND ` 500/- WHATEVER IS PAID BY THE OUTGOING MEMBER CANNOT BE SAID TO BE PAID VOLUNTARILY. 3. I HAVE HEARD THE PARTIES. NOW, THE ISSUE OF THE TRANSFER FEE IS DIRECTLY COVERED IN FAVOUR OF ASSESSEE BY THE DECIS ION OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF SIND CO-OPERATI VE HOUSING SOCIETY VS. ITO 317 ITR 47 AND MITTAL COURT PREMISE S CO-OPERATIVE SOCIETY LTD. VS. ITO 320 ITR 414 (BOM). SO FAR AS OBSERVATION OF THE A.O. IS CONCERNED THAT IS PER THE BYELAWS OF THE SO CIETY TRANSFER FEES IS ONLY ` 500/- TO BE PAID BY OUTGOING MEMBER. SO FAR AS P RINCIPLES OF MUTUALITY IS CONCERNED, IT HAS NOTHING TO DO WITH T HE MINIMUM CEILING PUT BY BYE-LAWS OF THE SOCIETY AS ADMITTEDLY THERE IS NO ALLEGATION OF THE COMMERCIALITY AGAINST THE ASSESSEE SOCIETY. MO REOVER, THE TRANSFER FEE IS RECEIVED FROM THE MEMBERS OF THE SOCIETY AND WHICH ARE DIRECTLY TAKEN TO THE WELFARE FUND IN THE BALANCE SHEET. IN MY OPINION, THE TRANSFER FEES RECEIVED BY THE SOCIETY IS COVERED UN DER THE PRINCIPLES OF MUTUALITY AND THAT CANNOT BE BROUGHT TO TAX. RESPE CTFULLY FOLLOWING THE PRINCIPLES LAID DOWN BY THE HONBLE JURISDICTIO NAL HIGH COURT IN THE CASES OF SINDH CHS (SUPRA) AND MITTAL COURT CHS LTD. (SUPRA), I ACCORDINGLY, ALLOW THE GROUND TAKEN BY THE ASSESSEE IN THE PRESENT APPEAL. 4. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 9 TH MAY 2012. SD/- ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI, DATE: 9TH MAY 2012 ITA NO.1375/MUM/2012 SAI APARTMENTS CO-OPERATIVE HOUSING SOCIETY LIMITED 3 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A)-31, MUMBAI. 4) THE CIT -20, MUMBAI. 5) THE D.R. SMC BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN