ITO 12(3)(2), MUMBAI V. TULSIANI CHAMBERS PREMISES CO-OP SC.LTD, MUMBAI

ITA 3292/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49205 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 29-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 27-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TASNEEM VARAWALA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, J BENCH, MUMBAI. BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER I.T.A NO.3292/ MUM/2010 ASSESSMENT YEAR: 2006-07 INCOME TAX OFFICER 12(3)(2) .. APPELLANT AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-20 VS M/S. TULSIANI CHAMBERS PREMISES CO.P.SC. LTD. ,. RESPONDEN T 212, NARIMAN POINT, MUMBAI-21. PA NO.AAAAT8890 N APPEARANCES: PARESH JOHARI, FOR THE APPELLANT TASNEEM VARAWALA, , FOR THE RESPONDENT O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF CIT(A)S ORDER DATED 11 TH FEBRUARY, 2010, IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961, FOR THE ASSESS MENT YEAR 2006-07. 2. GROUND NO.1 READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) HAS ERRED IN DIRECTING THE AO TO DELETE THE ADDITION OF RS 15,78,000 ON ACCOUNT OF TRANSFER FEES BY HOLDING TH AT THE RECEIPT IS COVERED BY CONCEPT OF MUTUALITY & HENCE NOT TAXABLE . I.T.A NO.3292/ MUM/2010 M/S. SULSIANI CHAMBERS PREMISES CO.P.SC. LTD. 2 3. LEARNED REPRESENTATIVES FAIRLY AGREE THAT THIS I SSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE HONBLE BOMBAY HIGH COURTS JUD GEMENT DATED 31.8.2009 IN THE CASE OF THE ASSESSEE IN WRITE PETITION NO.710 OF 19 96, WHEREIN, THE HONBLE COURT FOLLOWING ITS DECISION IN THE CASE OF SINDH CO-OP ERATIVE HOUSING SOCIETY V. ITO, 317 ITR 47 (BOM), ALLOWED THE APPEAL OF THE ASSESSEE. WE FIND THAT IN THE IMPUNGED ORDER, THE CIT(A) ALLOWED THE APPEAL OF THE ASSESS EE FOLLOWING THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN ASSESSEES OWN CASE. WE, ACCORDINGLY, UPHOLD THE SAME. 4. GROUND NO.1 IS THUS DISMISSED. 5. IN GROUND NO.2, THE ASSESSING OFFICER HAS RAISED THE FOLLOWING GRIEVANCE: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) HAS ERRED IN DIRECTING THE AO TO DELETE THE ADDITION OF RS. 4,38,000 ON ACCOUNT OF DISH ANTENNA CHARGES IGNORIN G THE FACT THAT THE DISH ANTENNA CHARGES COLLECTED BY THE ASSESSEE SOCI ETY FROM THE MEMBERS WHO HAVE INSTALLED THEIR DISH ANTENNA ON TH E TERRACE OF THE PREMISES. 6. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS RECEIVED DISH ANTENNA CHARGES AMOUNTING TO ` .4,38,000. THE AO OBSERVED THAT THOUGH THE ABOVE R ECEIPTS ARE TAXABLE IN THE HANDS OF THE SOCIETY, THE ASSESS EE HAS NOT OFFERED THE SAME FOR TAXATION. THE DISALLOWED THE SAME, INTER ALIA, OBS ERVING THAT THE RECEIPTS WERE RECEIVED FROM THE SPECIFIC MEMBERS OF THE SOCIETY F OR COMMERCIALLY EXPLOITING THE SOCIETYS PREMISES FOR FEW SELECTED MEMBERS ONLY. WHEN THE ASSESSEE CARRIED THE MATTER IN APPEAL, THE CIT(A), FOLLOWING THE DECISIO N OF THE ITAT IN ASSESSEES OWN CASE IN ITA NO.2784/M/2002 FOR THE ASSESSMENT YEAR 2003-004, DELETED THE DISALLOWANCE. AGGRIEVED, THE ASSESSING OFFICER IS IN APPEAL BEFORE US. 7. AFTER HEARING BOTH THE SIDES, WE SEE NO REASON T O INTERFERENCE WITH THE ORDER OF THE CIT(A) BECAUSE THE CIT(A) HAS DELETED THE DI SALLOWANCE FOLLOWING A COORDINATE BENCHS DECISION IN THE CASE OF THE ASS ESSEE FOR THE ASSESSMENT YEAR I.T.A NO.3292/ MUM/2010 M/S. SULSIANI CHAMBERS PREMISES CO.P.SC. LTD. 3 2003-04 IN ITA NO,.2784/M/2007, WHEREIN THE TRIBUN AL HAS, INTER ALIA, OBSERVED AS FOLLOWS WE HEARD BOTH THE PARTIES AND PERUSED THE RELEVAN T ORDERS OF THE REVENUE AUTHORITIES IN THIS REGARD. IT IS WELL SETTLED LAW THAT THE AMOUNTS RECEIVED FROM THE MEMBERS IS NOT EXIGIBLE TO TAX IN THE LIGH T OF THE AFORESAID SPECIAL BENCH DECISION. ALTHOUGH, THE ABOVE PRINCIPLES IS ESTABLISHED IN THE CONTEXT OF TRANSFER FEE FOR THE MUTUAL BENEFITS OF THE SOCI ETY, THE SAID PRINCIPLES HOLDS GOOD IN RESPECT OF THE AMOUNTS RECEIVED FROM THE SE VEN MEMBERS OF THE SOCIETY FOR THE COMMON BENEFIT OF THIS SOCIETY. AS DISCUSSED IN PARA 70 OF THE SAID DECISION, IT IS COMPULSORY THAT THE ALL MEMBER S OF THE BUILDING ARE THE MEMBERS OF THE SOCIETY AND CONTRIBUTIONS ARE TO BE MADE COMPULSORILY. CONSIDERING THE ABOVE PRINCIPLES LAID DOWN BY THE S PECIAL BENCH, WE ARE OF THE CONSIDERED OPINION THAT, AS LONG AS THE SOCIETY HAS UNDERTAKEN THE WORK OF INSTALLATION OF THE DISH ANTENNA, THE CONTRIBUTI ONS RECEIVED FROM THE FEW MEMBERS OF THE SOCIETY ARE NOT EXIGIBLE TO TAX. AC CORDINGLY, THE RECEIPT OF AMOUNTS FROM SOME OF THE MEMBERS OF THE SOCIETY DOE S NOT ALTER THE SITUATION AS THEE CAN BE MANY REASONS FOR NON PAYME NT OF THE CONTRIBUTIONS BY SOME MEMBERS OF THE SOCIETY. THEREFORE, WE ARE OF THE CONSIDERED OPINION, THAT THE ORDER OF THE CIT(A) MUST BE REVER SED. ACCORDINGLY, GROUND NO.1 OF THE ASSESSEES APPEAL IS ALLOWED. 8. GROUND NO.2 IS THUS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 29 TH JUNE, 2011 SD/- (V. DURGA RAO) JUDICIAL MEMBER SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER MUMBAI, DATED 29 TH JUNE, 2011 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),23, MUMBAI 4. COMMISSIONER OF INCOME TAX, XII , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH J, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI I.T.A NO.3292/ MUM/2010 M/S. SULSIANI CHAMBERS PREMISES CO.P.SC. LTD. 4