ITO 19(2)(1), MUMBAI V. LANDS END CO OP HSG SOC LTD, MUMBAI

ITA 2483/MUM/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0404 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2017
• Appeal Filed By: Department
• Bench Allotted: SMC
• Next Hearing Date: 08-06-2017
• Assessment Year: 2013-2014
• Appeal Filed On: 06-04-2017
• Court: TRIBUNAL

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 2483 /MUM/ 201 7 (ASSESSMENT YEAR 20 13 - 1 4 ) ITO 19(2)(1) ROOM NO. 221 MATRU MANDIR MUMBAI - 400 007. VS. M/S. LANDS END COOP. HSG. SOCIETY LIMITED 29 - D, LANDS EN D CHS LTD., MALABAR HILL CHANDWADI, MUMBAI. ( APPELLANT ) ( RESPONDENT ) PAN NO . AAAAL0060C ASSESSEE BY SHRI SATISH MODY DEPARTMENT BY SHRI RAKESH RANJAN DATE OF HEARING 8 .6 . 201 7 DATE OF PRONOUNCEMENT 8 .6 . 201 7 O R D E R THE APPEAL FILED B Y THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 24.1.2017 PASSED BY THE LEARNED CIT(A) - 29, MUMBAI AND IT RELATES TO A.Y. 2013 - 14. THE SOLITARY ISSUE URGED IN THIS APPEAL IS WHETHER THE LEARNED CIT(A) WAS JUSTIFIED IN HOLDING THAT NON - OCCUPANCY CHARGES AN D TRANSFER PREMIUM RECEIVED BY ASSESSEE IS EXEMPT UNDER THE PRINCIPLE OF MUTUALITY. 2. I HEARD THE PARTIES AND PERUSED THE RECORD. LEARNED COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED THAT IDENTICAL ISSUE S CAME BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE I N VARIOUS ASSESSMENT YEARS AND HON'BLE TRIBUNAL HAS HELD THAT PRINCIPLE OF MUTUALITY SHOULD BE APPLIED TO THE IMPUGNED RECEIPTS. LEARNED AR FURTHER SUBMITTED THAT THE LEARNED CIT(A) HAS FOLLOWED THE DEC ISION RENDERED BY THE DIVISION BENCH OF THE TRIBUNAL I N ITA NO. 3566/MUM/2014 RELATING TO A.Y. 2009 - 10 , WHEREIN THE TRIBUNAL HAD FOLLOWED THE DECISION RENDERED BY IT IN ASSESSEES OWN CASE IN ITA NO. 6866/MUM/2007 RELATING TO A.Y. 2004 - 5. ACCORDINGLY, HE SUBMITTED THAT THE ORDER PASSED BY THE LEARNED CIT(A) S HOULD BE UPHELD. LANDS END CHS LTD. 2 3. I HEARD LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RECORD. I NOTICED THAT THE LEARNED CIT(A) HAS FOLLOWED THE DECISION RENDERED BY THE DIVISION BENCH OF MUMBAI IN ASSESSEES OWN CASE FOR A.Y. 2009 - 10. FOR THE SAKE OF CONVENIEN CE, I EXTRACT BELOW THE OPERATIVE PORTION OF THE ORDER PASSED BY THE LEARNED CIT(A) : - 4.3 THE SUBMISSIONS OF LEARNED COUNSEL HAVE BEEN CONSIDERED CAREFULLY. THIS ISSUE HAS COME UP IN THE APPELANTS OWN CASE FOR THE A.YS. 2003 - 04, 2004 - 05 AND 2009 - 10 WHER EIN THE HON'BLE ITAT HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. WHILE DECIDING THE ISSUE FOR A.Y. 2009 - 10, THE HON'BLE ITAT HAS HELD AS UNDER : - 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE NOTE THAT IDENTIC AL ISSUE HAS BEEN DECIDED IN FAVOUR OF ASSESSEE IN IT ITS OWN CASE IN ITA NO.6866/MUM/2007 ASSESSMENT YEAR 2004 - 05 VIDE ORDER DATED 27/09/2013.THE RELEVANT PARAGRAPHS 3 & 4 OF THE SAID ORDER ARE REPRODUCED AS UNDER: - WE HAVE HEARD THE LD. AR AS WELL AS LD. DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LD. AR HAS POINTED OUT THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED AND DECIDED BY THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2003 - 04 VIDE ORDER DATED 10.01.2011 IN ITA NO.6066/M/2 006. THUS, THE LD. AR HAS SUBMITTED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. THE LD. DR HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. THE AO MADE THE ADDITION WITH RESPECT TO THE AMOUNT RECEIVED BY THE ASSESSEE TOWARDS TRANSFER FEE OF R S.500/ - FROM OUTGOING MEMBERS, ENTRANCE FEE FOR RS.100/ - FROM INCOMING MEMBERS, SHARE PREMIUM AND CONTRIBUTION TO COMMON AMENITIES FUND. THE CIT(A) DELETED THE TRANSFER FEE OF RS.500/ - EACH ON THE PRINCIPLES OF MUTUALITY BUT CONFIRM THE ADDITION TOWARDS TH E RECEIPT OF ENTRANCE FEE OF RS.100/ - EACH AND THE REIPTS OF CONTRIBUTION TO COOMON AMENITIES FUND TOTAL AMOUNTING TO RS.17,01,200/ - . THIS TRIBUNAL IN ASSESSEEES OWN 5 ITA NO.3566/MUM/2014 LANDS END CO - OPERATIVE HOUSING SOCIETY LTD VS. I.T.O. CASE FOR TH E ASSESSMENT YEAR 2003 - 04 HAS CONSIDERED AND ADJUDICATED THE ISSUE OF CONTRIBUTION TO COMMON AMENITIES IN PARA 4 AS UNDER: WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. CASE OF THE ASESSEE IS THAT THOUGH THE AMOUNT WAS RECEI VED IN THE FORM OF CONTRIBUTION TO COMMON AMENITIES FUND IT IS ESSENTIALLY UTILIZED FOR THE BENEFIT OF COMMON MEMBERS AND THUS PRINCIPLES OF MUTUALITY ARE ATTRACTED. FACTS NOT BEING IN DISPUTE, IN THE LIGHT OF THE LANDS END CHS LTD. 3 DECISION OF THE ITAT (SUPRA), WE ACCEPT TH E PLEA OF THE ASSESSEE AND HOLD THAT THE IMPUGNED AMOUNT RECEIVED IN THE FORM OF CONTRIBUTION TO COMMON AMENITIES FUND IS EXEMPT FROM TAX SINCE PRINCIPLES OF MUTUALITY APPLIED TO THE INSTANT RECEIPTS. UNDER THE CIRCUMSTANCES, APPEAL FILED BY THE ASSESSEE I S ALLOWED. PRONOUNCED ACCORDINGLY IN THE OPEN COURT ON THE DATE OF HEARING I.E. ON 10.1.2011. IN VIEW OF THE EARLIER ORDER OF THIS TRIBUNAL THE AMOUNT OF RS.16,50,000/ - TOWARDS COMMON AMENITIES FUND IS NOT TAXABLE ON THE PRINCIPLE OF MUTUALITY AS DECIDE D BY THIS TRIBUNAL IS THE ASSESSEES OWN CASE. AS REGARDS THE RECEIPT TOWARDS SHARE PREMIUM AND ENTRANCE FEE FROM INCOMING MEMBERS IF THE SAID AMOUNT IS RECEIVED FOR THE PRUPOSE OF UTILIZING FOR THE COMMON AMENITIES OF THE SOCIETY THEN THE SAME FALLS UNDER THE CATEGORY OF THE CONTRIBUTION OF COMMON AMENITIES FUND AND THE CON C EPT OF MUTUALITY WILL BE APPLICABLE. ACCORDINGLY, THE AO TO VERIFY THE SAME AND THEN DECIDE AS PER OUR OBSERVATION. WE ALSO FIND THAT JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V/S DARBHANGA MANSION CHS LTD IN ITA NO. 1474/MUM/2012 VIDE ORDER DATED 18 - 12 - 2014 HAS DECIDED A SIMILAR ISSUE ON IDENTICAL FACTS IN FAVOUR OF THE SOCIETY. WE, THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE DECISION, DELETE THE ADDITION OF RS. 11,00,000/ - BY ALL OWING THE APPEAL OF THE ASSESSEE ON THIS POINT. THE AO IS DIRECTED ACCORDINGLY. 4.3.1 THIS ISSUE HAS CAME UP IN THE APPELLANTS OWN CASE FOR A.Y. 2012 - 13 AS WELL WHICH HAD BEEN DECIDED BY MY PREDECESSOR CIT(A) IN FAVOUR OF THE APPELLANT. 4.3.2 RESPECTF ULLY FOLLOWING THE ORDERS OF THE JURISDICTIONAL HIGH COURT AND ITAT AND MY PREDECESSORS ORDER FOR A.Y. 2012 - 13, THIS ISSUE IS DECIDED IN FAVOUR OF THE APPELLANT. THIS GROUND OF THE APPEAL IS ALLOWED. 4. SINCE THE LEARNED CIT(A) HAS FOLLOWED THE DECISION RENDERED BY THE DIVISION BENCH OF ITAT IN ASSESSEES OWN CASE, I DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LEARNED CIT(A). ACCORDINGLY, I UPHOLD THE SAME. LANDS END CHS LTD. 4 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 8 .6 . 201 7. SD/ - (B.R.BASKARAN) ACCOUNTANT MEMBER MUMBAI ; DATED : 8 / 6 / 20 1 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI