ITO 12(3)(2), MUMBAI V. NEW MAKER CHAMBER IV PREMISES CO.OP. SOC.LTD, MUMBAI

ITA 1533/MUM/2010

• Counselvise Citation: 153319914 RSA 2010
• Duration Of Justice: 1 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 06-04-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 25-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Assessee Lawyers: M SUBRAMANIAM

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI D.K. AGARWAL (JM) AND SHRI RAJENDRA SI NGH(AM) ITA NO.1533/M/2010 ASSESSMENT YEAR 2006-07 THE INCOME-TAX OFFICER 12(3)(2) M/S. NEW MAKER CHA MBER IV PREMISES ROOM NO.102, AAYAKAR BHAVAN, COOP.SOC.LTD., 222-NA RIMAN POINT M.K.MARG, MUMBAI 400 020. MUMBAI 400 021. PAN : AAAAN 2428 A APPELLANT RESPONDENT REVENUE BY : MS ASHIMA GUPTA ASSESSEE BY : SHRI M.SUBRAMANIAM O R D E R PER RAJENDRA SINGH (AM) THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 10.12.2009 OF CIT(A) FOR THE ASSESSMENT YEAR 2006-0 7. THE ONLY DISPUTE RAISED BY THE REVENUE IN THIS APPEAL IS REGARDING ADDITION OF RS.35,56,740/- ON ACCOUNT OF NON OCCUPANCY CHARGES. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E AO ON EXAMINATION OF ACCOUNTS NOTED THAT THE ASSESSEE HAD COLLECTED NON OCCUPANCY CHARGES AMOUNTING TO RS.39,13,200/- @ RS.3/- PER SQ.FT FROM THE MEMBERS. THESE CHARGES WERE LEVIED BY THE ASSESSEE OVER AND ABOVE THE NORMAL CHARGES PAYABLE BY THE MEMBERS FOR THE REASON THAT THE PREM ISES WERE NOT OCCUPIED BY THE MEMBER AND GIVEN ON RENT TO OTHER PARTIES. THE AO ALSO NOTED THAT 2 MAINTENANCE CHARGES PAYABLE BY THE MEMBERS AS PER T HE GOVERNMENT NOTIFICATIONS WERE TO THE TUNE OF RS.35,64,607/-. H E THEREFORE TREATED THE NON OCCUPANCY CHARGES IN EXCESS OF 10% OF MAINTENANCE C HARGES AMOUNTING TO RS.35,56,740/- AS INCOME OF THE ASSESSEE. IN APPEAL CIT(A) REFERRED TO THE DECISION OF TRIBUNAL IN CASE OF C.C.I.CHAMBERS CO.O P.HSG. LTD AND SOME OTHER CASES IN WHICH IT WAS HELD THAT NON OCCUPANCY CHARG ES IN EXCESS OF 10% SERVICE CHARGES COULD NOT BE CHARGED TO TAX. HE ALSO REFERR ED TO THE JUDGMENT OF HONBLE HIGH COURT OF MUMBAI AS WELL AS IN CASE OF MITTAL COURT PREMISES VS ITO IN WHICH IT WAS HELD THAT THE NON OCCUPANCY CHARGES WOULD BE COVERED BY THE PRINCIPLE OF MUTUALITY AND CANNOT BE TAXED. CIT(A) THEREFORE DELETED THE ADDITION MADE BY THE AO AGGRIEVED BY WHICH THE REVE NUE IS IN APPEAL. 3. BEFORE US THE LEARNED AR FOR THE ASSESSEE SUBMIT TED THAT THE ISSUE WAS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F THE TRIBUNAL IN ASSESSEES OWN CASE IN A.Y.2003-04 IN ITA NO.1432/M/2007 IN WH ICH THE TRIBUNAL FOLLOWING THE DECISION IN CASE OF C.C.I. CHAMBERS CO.OP.HSG. LTD. (SUPRA) AND THE JUDGMENT OF HONBLE HIGH COURT OF MUMBAI IN CASE OF MITTAL COURT PREMISES CO.OP. SOCIETY LTD. VS ITO (320 ITR 414) HELD THAT NON OCCUPANCY CHARGES IN EXCESS OF 10% OF SERVICE CHARGES COULD NOT BE TAXED . THE LEARNED DR PLACED RELIANCE ON THE ORDER OF AO. 4. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE M ATTER CAREFULLY. THE DISPUTE IS REGARDING TAXABILITY OF NON OCCUPANCY CH ARGES PAID BY THE MEMBERS IN EXCESS OF 10% OF MAINTENANCE CHARGES. WE FIND TH AT THE ISSUE IS COVERED BY THE JUDGMENT OF HONBLE HIGH COURT OF MUMBAI IN CAS E OF MITTAL COURT PREMISES CO.OP. SOC. VS ITO (320 ITR 414) IN WHICH IT HAS BE EN HELD THAT NON OCCUPANCY CHARGES ARE LEVIED AS PER BY-LAWS OF THE SOCIETY TO INCREASE THE SOCIETY FUNDS TO 3 BE USED FOR PROVIDING MAINTENANCE AND OTHER FACILI TIES TO THE MEMBERS AND THEREFORE THE NON OCCUPANCY CHARGES WILL BE COVERED BY THE PRINCIPLE OF MUTUALITY. FURTHER THE TRIBUNAL IN ASSESSEES OWN C ASE FOLLOWING THE SAID JUDGMENT HELD IN A.Y.2003-04 IN ITA NO.1431/M/2007 THAT NON OCCUPANCY CHARGES IN EXCESS OF 10% OF MAINTENANCE CHARGES CAN NOT BE CHARGED TO INCOME-TAX. RESPECTFULLY FOLLOWING THE ABOVE JUDGME NTS, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF CIT(A) ALLOWING RELIEF TO THE ASSESSEE AND THE SAME IS UPHELD. 5. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED . 6. ORDER WAS PRONOUNCED IN THE OPEN COURT 20.04.201 1. SD/- SD/- ( D. K. AGARWAL ) (RAJEND RA SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE : 20.04.2011 AT :MUMBAI COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A), MUMBAI CONCERNED 4. THE CIT, MUMBAI CITY CONCERNED 5. THE DR J BENCH, ITAT, MUMBAI // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ALK