ITO 12(3)(2), MUMBAI V. RAHEJA CHAMBERS PREMISES CO.OP. SOCIETY LTD, MUMBAI

ITA 4077/MUM/2010

• Counselvise Citation: 407719914 RSA 2010
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 19-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C G K NAIR
• Assessee Lawyers: HARSH SHAH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI PRAMOD KUMAR, AM AND SMT.ASHA VIJAYARAGHAVAN, JM ITA NOS.4076 & 4077/MUM/2010 : AS ST.YEARS 2005-2006 & 2006-2007 THE INCOME TAX OFFICER WARD 12(3)(2) MUMBAI. VS. M/S.RAHEJA CHAMBERS PREMISES CO-OP. SOCIETY LIMITED RAHEJA CHAMBERS, 1 ST FLOOR 213, NARIMAN POINT, MUMBAI 400 020. PA NO.AAAAR1054L. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI C.G.K.NAIR RESPONDENT BY : SHRI HARSH SHAH O R D E R PER PRAMOD KUMAR, AM : THESE TWO APPEALS BY THE REVENUE ARIS E OUT OF THE ORDERS PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) RE LATE TO THE ASSESSMENT YEARS 2005-2006 2006-2007. SINCE TWO IDENTICAL GROUNDS AR E INVOLVED IN BOTH THESE APPEALS, WE DISPOSE OFF THE SAME BY THIS CONSOLIDATED ORDER, FOR THE SAKE OF CONVENIENCE. 2. THE FIRST GROUND IN ASSESSMENT YEAR 2005-2006 IS AGAINST THE DELETION OF ADDITION OF RS.8,35,000 ON ACCOUNT OF RE PLACEMENT AND DEVELOPMENT FUND, I.E., TRANSFER FEES BY HOLDING THAT THE RECEIPT IS COVERED BY CONCEPT OF MUTUALITY AND HENCE NOT TAXABLE. 3. THE FACTUAL MATRIX OF THE CASE IS THAT THE ASSESSE E IS A CO-OPERATIVE SOCIETY (AOP). THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS NOT OFFERED FOR TAXATION TRANSFER FEE COLLECTED FROM SIX PARTIES TOTALING RS.8,35,000. WHEN THE ASSESSING OFFICER ASKED THE ASSESSEE THE REASON WHY SAID AMOUNT WAS NOT OFFERED FOR TAXATION, IT WAS SUBMITTED THAT THE SA ME IS EXEMPT FROM TAX ON THE GROUND OF PRINCIPLE OF MUTUALITY. NOT CONVINCED WITH THE EXPLAN ATION OFFERED BY THE ASSESSEE, THE A.O. MADE ADDITION OF RS.8,35,000. IN FIRST AP PEAL, THE CIT(A) DELETED THE ADDITION BY ITA NOS.4076 & 4077/MUM/2010 M/S.RAHEJA CHAMBERS PREMISES CO-OP. SOCIETY LTD. 2 FOLLOWING THE ORDERS OF ITAT IN ASSESS EES OWN CASE FOR THE PRECEDING ASSESSMENT YEARS 1993-94, 1994-95, 1996-97 A ND 2001-2002 TO 2004-2005 IN ITA NOS.1533/MUM/2008, 1541/MUM/ 2008 AND 1534/MUM/2008. 4. AFTER HEARING BOTH THE SIDES AND PERUSI NG THE RELEVANT MATE RIAL ON RECORD, WE FIND THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL, IN ASSESSEES OWN CASE, FOR TH E PRECEDING YEARS I.E. ASSESSMENT YEARS 1993-94, 1994-95, 1996-97, 2001-2002 TO 2004-2005 IN IT A NOS.1533, 1541, 1534/MUM/2008 AND 5177 TO 5180/MUM/2008, C OPIES PLACED ON RECORD, WHEREIN IT HAS BEEN HELD THAT THE TRAN SFER FEE BY THE ASSESSEE FROM TRANSFEREE MEMBERS IS NOT LIABLE TO TAX. NO DISTINGUISHING FEATURES WERE BROUGHT ON RECORD BY THE LEARNED DEPARTMENTAL REPRESENTATIVE. THEREFORE, IN OUR CONSIDERED OPINI ON, THE CIT(A) HAS RIGHTLY DELETED THE ADDITION BY FOLLOWING TH E CONSISTENT VIEW TAKEN BY THE TRIBUNAL. RESPECTFULLY FOLLOWING THE PRECEDENT, WE UPHOLD THE ORDER OF THE CIT(A). THIS GROUND IS, THEREFORE, DISMISSED. 5. THE OTHER GROUND IN ASSESSMENT YEAR 2005-2006 IS AGAINS T THE DELETION OF ADDITION OF RS.4,20,769 ON ACCOUNT OF N ON-OCCUPANCY CHARGES, IGNORING THE FACT THAT THE ASSESSEE HAS COLL ECTED NON-OCCUPANCY CHARGES OVER AND ABOVE 10% OF THE MAINTENANCE CHARGES. THE ASSESSING OFFICE R NOTICED THAT THE ASSESSEE HAS CREDITED AN AMOUNT OF RS.6,27,517 BEING NON-OCC UPANCY CHARGES. THE ASSESSEE EXPLAINED BEFORE THE A.O. THAT THEY WERE CHARGING RS.1.60 PER SQ.FT. AREA PER MONTH AS NON- OCCUPANCY CHARGES TO THE MEMBERS WHO WE RE NOT OCCUPYING THEI R PREMISES AND HAD BEEN LET OUT. HOWEVER, THE A.O. WORK ED OUT THE NON-OCCUPANCY CHARGES AT RS.4,20,769 OUT OF TOTAL NON-OCCUPANCY CH ARGES OF RS.6,27,517 COLLECTED BY THE ASSESSEE, BY REDUCING MAINTENANCE CHARGES OF RS.2,06,748. THE CIT(A) DELETED THE ADDITION BY FOLLOWING THE TRIBUNAL ORDERS IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2001-2002 TO 2004-2005 IN ITA NOS.5177 TO 5180/MUM/2008. ITA NOS.4076 & 4077/MUM/2010 M/S.RAHEJA CHAMBERS PREMISES CO-OP. SOCIETY LTD. 3 6. AFTER HEARING BOTH THE SIDES AND PERUSI NG THE RELEVANT MATE RIAL ON RECORD, WE FIND THAT THE LEARNED CIT(A) HAS RIGHTLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER BY FOLLOWING THE CONSISTENT VIEW TAKEN BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE PRECEDING ASSESSMENT YEARS 2001-2002 TO 2004-2005 IN ITA NOS.5177 TO 5180/MUM/2008, COPY PLACE D ON RECORD. THE TRIBUNAL WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE RELIED UPON THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF MITTAL COURT CHS LTD. VS. CI T [(2010) 320 ITR 414 (BOM.)], WHEREIN THE COURT HELD THE AMOUNT AS NOT TA XABLE ON THE PRINCIPLE OF MUTUALITY. NO DISTINGUISHING FEATURES WER E BROUGHT ON RECORD BY THE LEARNED DEPARTMENTAL REPRESENTATIVE. WE, THEREFORE, UPHOLD TH E IMPUGNED ORDER AND DISMISS THIS GROUND ALSO. 7. BOTH THE PARTIES ARE AGREED THAT TH E FACTS AND CIRCUMSTANCES OF ASSESSMENT YEAR 2006-2007 ARE MUTATIS MUTANDIS SIMILAR TO THOSE OF ASSESSMENT YEAR 2005- 2006. RESPECTFULLY FOLLOWING THE VIEW TAKE N HEREINABOVE, WE DELE TE THE ADDITIONS OF RS.17,12,250 RAISED THROUGH GROUND NO.1 ON ACCOUNT OF REPLACEMENT AND DEVELOPMENT FUND AND RS.4,05,143 RAISED TH ROUGH GROUND NO.2 ON ACCOUNT OF NON- OCCUPANCY CHARGES OVER AND ABOVE 10% OF THE MAINTENANCE CHARGE, IN ASSESSMENT YEAR 2006-2007. 8. IN THE RESULT, BOTH THE APPEALS STAND DISMISSED. ORDER PRONOUNCED IN TH E OPEN COURT ON THIS 15 TH DAY OF JUNE, 2011. SD/- SD/- ( ASHA VIJAYARAGHAVAN ) ( PRAMOD KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 15 TH JUNE, 2011. DEVDAS* ITA NOS.4076 & 4077/MUM/2010 M/S.RAHEJA CHAMBERS PREMISES CO-OP. SOCIETY LTD. 4 COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - XXIII, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.