NEW GULISTAN COOPERATIVE HSG. SOC. LTD., MUMBAI V. INCOME TAX OFFICER-16(1)(2), MUMBAI

ITA 2176/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7391 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 08-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S M KESHKAMAT S S RANA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B: MUMBAI BEFORE SHRI N V VASUDEVAN, JUDICIAL MEMBER AND SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER ITA NO.2176/MUM/2009 ASSESSMENT YEAR 2005-06 NEW GULISTAN COOPERATIVE HOUSING SOCIETY LTD, 13, CARMICHAEL ROAD, MUMBAI 400 026 PAN AAAAN 1756 F VS THE INCOME-TAX OFFICER-16(1)(2), MATRU MANDIR, TARDEO ROAD, MUMBAI-400 007 (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI VIMAL PUNMIYA FOR RESPONDENT : S/SHRI S M KESHKAMAT / S S RANA ORDER PER RAJENDRA SINGH, AM 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 24.12.2008 OF CIT (A) FOR THE ASSESSMENT YEAR 2005-06. THE ONLY DISPUTE RAISED IN THIS APPEAL IS REGARDING TAX ABILITY OF CONTRIBUTIONS RECEIVED BY THE ASSESSEE TO GENERAL A MENITIES FUND AND SINKING FUND RECEIVED FROM THE TRANSFEROR / TRANSFE REE FLATS IN THE SOCIETY. 2. THE MEMBERS OF THE SOCIETY, DURING THE YEAR, H AD SOLD FOUR FLATS AND THE ASSESSEE SOCIETY HAD COLLECTED A SUM OF RS 21.30 LAKHS AS CONTRIBUTION TO GENERAL AMENITIES FUND AND AMOUNT O F RS 1.25 LAKHS AS CONTRIBUTION TO THE SINKING FUND. ADMITTEDLY, T HE NATURE OF BOTH THE CONTRIBUTIONS IS THE SAME TO BE UTILIZED BY THE SOC IETY FOR COMMON GOOD OF THE MEMBERS, SUCH AS, REPAIR OF BUILDING ET C. OUT OF THE SAID SUMS RECEIVED, A SUM OF RS 10.50 LAKHS OUT OF CONTR IBUTION TO GENERAL AMENITY FUND AND RS 50,000/- OUT OF CONTRIBUTION TO SINKING FUND TOTALING TO 11 LAKHS HAD BEEN SHOWN AS RECEIPT FROM TRANSFERORS. THESE AMOUNTS HAD BEEN CONTRIBUTED BY THE TRANSFERE E ON BEHALF OF NEW GULISTAN COOPERATIVE HOUSING SOCIETY LTD ITA 2176/M/2009 2 THE TRANSFERORS. THE ASSESSEE SOCIETY DID NOT DECL ARE THESE CONTRIBUTIONS AS INCOME ON THE GROUND OF PRINCIPLE OF MUTUALITY. THE ASSESSING OFFICER, HOWEVER, DID NOT ACCEPT THE CLAI M ON THE GROUND THAT THESE CONTRIBUTIONS WERE NOT VOLUNTARY AND WER E MADE BY THE PERSONS SUCH AS TRANSFEREES, WHO WERE NOT MEMBERS O N THE DATE OF PAYMENT OR BY TRANSFERORS WHO CEASED TO BE A MEMBER ON THE EVE OF CONTRIBUTION. ASSESSING OFFICER, THEREFORE, HELD T HAT PRINCIPLE OF MUTUALITY WAS NOT APPLICABLE AND ACCORDINGLY HE TAX ED THE CONTRIBUTIONS RECEIVED AS INCOME. 3. IN APPEAL, THE ASSESSEE SUBMITTED THAT AMOUNTS HAD BEEN COLLECTED ON THE BASIS OF AGREEMENT REACHED UPON BY ALL THE MEMBERS IN THE GENERAL MEETING HELD ON 31.7.1994 TO BE USED FOR COMMON GOOD OF THE MEMBERS AND, THEREFORE, COULD NOT BE TAXED. ALTERNATIVELY, IT WAS ALSO SUBMITTED THAT OUT OF THE TOTAL CONTRIBUTI ON, A SUM OF RS 11 LAKHS HAD BEEN RECEIVED FROM TRANSFERORS WHO WERE T HE MEMBERS OF THE SOCIETY AND, THEREFORE, THE SAID SUM COULD NOT BE TAXED. A PLEA WAS ALSO TAKEN THAT THE CONTRIBUTION TO THE EXTENT OF RS 25,000/- PER TRANSFER WHICH WAS PERMISSIBLE UNDER THE RULES OF M AHARASHTRA CO- OPERATIVE SOCIETIES ACT, IN ANY CASE, COULD NOT BE TAXED. THE ASSESSEE RELIED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF WALKESHWAR TRIVENI CO-OPERATIVE SOCIETY LTD (88 ITD 159). CIT (A), HO WEVER, DID NOT ACCEPT THE CONTENTIONS AND OBSERVED THAT THE DECISI ON OF THE TRIBUNAL IN CASE OF WALKESHWAR TRIVENI CO-OPERATIVE SOCIETY LTD (SUPRA) WAS OF NO HELP TO THE ASSESSEE AS IN THAT CASE IT WAS HELD THAT PRINCIPLE OF MUTUALITY WOULD NOT APPLY TO CONTRIBUTIONS RECEIVED FROM TRANSFEREE WHO WERE NOT THE MEMBERS. MOREOVER, THE TRIBUNAL I N THAT CASE ALSO HELD THAT CONTRIBUTION RECEIVED IN EXCESS OF THE LI MIT PRESCRIBED BY THE CO-OPERATIVE DEPARTMENT WAS TAXABLE. CIT (A), ACCO RDINGLY, HELD THAT CONTRIBUTIONS RECEIVED BOTH FROM TRANSFERORS AND TR ANSFEREES WERE EXIGIBLE TO TAX. ACCORDINGLY, HE CONFIRMED THE ORD ER OF THE ASSESSING NEW GULISTAN COOPERATIVE HOUSING SOCIETY LTD ITA 2176/M/2009 3 OFFICER, AGGRIEVED, BY WHICH THE ASSESSEE IS IN APP EAL BEFORE THE TRIBUNAL. 4. AFTER HEARING BOTH THE PARTIES WE FIND THAT THE SAME ISSUE HAS ALREADY BEEN CONSIDERED BY THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1999-2000 IN ITA 7077/ MUM/2007. IN THAT YEAR ALSO THE ASSESSEE HAD RECEIVED CONTRIBUTI ON OF RS 5 LAKHS FROM TRANSFERORS AND RS 7 LAKHS FROM TRANSFEREES IN CONNECTION WITH TRANSFER OF FLATS BY THE MEMBERS. SIMILAR ARGUMENT S WERE RAISED BEFORE THE TRIBUNAL FOR NON-TAXABILITY OF CONTRIBUT IONS. THE TRIBUNAL, HOWEVER, SET ASIDE THE ORDER OF THE CIT (A) AND RES TORED THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE ISSUE FRESH IN THE LIGHT OF THE JUDGMENT OF HONBLE HIGH COURT OF MUMBAI IN CASE OF SINDH CO- OPERATIVE HSG SOCIETY LTD IN ITA NO.931 OF 2009 AND ITA 1063 OF 2004 DATED 17 TH JULY 2009 AND IN CASE OF MITTAL COURT PREMISES CO- OP. SOCIETY IN ITA NO.999 OF 2004 AND 1028 TO 1030 OF 2 004 DATED 17TH JULY 2009. FACTS OF THIS YEAR ARE IDENTICAL. WE, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR ASSESSMENT YEAR 1999-00 (SUPRA) RESTORE THE ISSUE T O THE FILE OF THE ASSESSING OFFICER FOR FRESH DECISION IN THE LIGHT O F JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT, REFERRED TO ABOVE AND AF TER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 12TH DAY OF MARCH 2010. SD/- SD/- (N V VASUDEVAN) (RAJENDRA SINGH) JUDICIAL MEMBER A CCOUNTANT MEMBER MUMBAI, DATE: 12TH MARCH, 2010 . NEW GULISTAN COOPERATIVE HOUSING SOCIETY LTD ITA 2176/M/2009 4 COPY TO 1. THE APPELLANT. 2. THE RESPONDENT 4. CIT(A)-XVI, MUMBAI. 5 CIT CITY-XVI, MUMBAI. 6. D R B BENCH, MUMBAI. 7. GUARD FILE. BY ORDER / / TRUE COPY / / ASST. REGISTRAR, ITAT, MUMBAI BENCHES MUMBAI *CHAVAN/- NEW GULISTAN COOPERATIVE HOUSING SOCIETY LTD ITA 2176/M/2009 5 SNO DATE INITIALS 1 DRAFT DICTATED ON 11-03-2010 SR.P.S 2. DRAFT PLACED BEFORE AUTHOR 12-03-2010 SR.P.S 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER V.P. 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER A.M 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.P.S 6. KEPT FOR PRONOUNCEMENT ON SR.P.S 7. FILE SENT TO THE BENCH CLERK SR.P.S 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER