STERLING TOWER COOPERATIVE HOUSING SOCIETY LTD, MUMBAI V. ITO 20(3)(3), MUMBAI

ITA 5220/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1337 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2006-2007
• Appeal Filed On: 11-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH: MUMBAI BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO 5220/MUM/2009 (ASSESSMENT YEAR: 2006-07) STERLING TOWER CO-OPERATIVE SOCIETY LTD , STERLING TOWER CHS LTD, PLOT NO.36, 3RD CROSS LANE, LOKHANDWALA COMPLEX, ANDHERI (W), MUMBAI -400 053 PAN: AAATS 1814 Q VS ITO -20(3)(3), PIRAMAL CHAMBER, MUMBAI APPELLANT RESPONDENT APPELLANT BY: NONE RESPONDENT BY: SHRI S M KESHKAMAT ORDER PER PRAMOD KUMAR 1. IN THIS APPEAL, WHICH IS DIRECTED AGAINST THE CI T (A)S ORDER DATED 22ND JUNE 2009 FOR THE ASSESSMENT YEAR 2006-07, FOLLOWING GRI EVANCES HAS BEEN RAISED:- ON THE FACTS & CIRCUMSTANCES OF THE CASE, THE LEAR NED COMMISSIONER OF INCOME TAX APPEAL XXXII HAS ERRED IN FACT & IN LAW CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER OF RS 1,21,6 00/- RECEIVED BY THE APPELLANT FROM ITS MEMBERS ON ACCOUNT OF TRANSFER F EES. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE, BUT WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE, PERUSED THE MATERIAL O N RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS ALSO APPLICABLE LEGAL POSITION. 3. THE SHORT ISSUE REQUIRING OUR ADJUDICATION IS WH ETHER OR NOT THE AMOUNT OF RS 1,21,600/- RECEIVED BY THE ASSESSEE FROM INCOMING M EMBERS IS COVERED BY PRINCIPLE OF MUTUALITY AND ACCORDINGLY NOT LIABLE TO BE TAX I N THE HANDS OF THE ASSESSEE. THE AUTHORITIES BELOW HAVE HELD THAT SINCE INCOMING PUR CHASERS OF PROPERTY / SHARES OF ITA 5220/M/2009 STERLING TOWER CO-OPERATIVE SOCIETY LTD 2 SOCIETY ARE NOT EXISTING MEMBERS AS AT THE POINT OF TIME WHEN TRANSFER FEES HAS BEEN PAID BY THEM, THE TRANSFER FEES SO RECEIVED BY THE ASSESSEE WILL NOT BE ONE BY THE PRINCIPLE OF MUTUALITY. 4. HOWEVER, THIS ISSUE IS NOW SETTLED IN FAVOUR OF THE ASSESSEE BY HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SINDH CO-O PERATIVE HOUSING SOCIETY VS ITO 317 ITR 47 WHEREIN THEIR LORDSHIP HAVE HELD THAT TH E PRINCIPLES OF MUTUALITY IS APPLICABLE IN RESPECT OF TRANSFER FEES RECEIVED BY A CO-OPERATIVE HOUSING SOCIETY WHETHER FROM INCOMING MEMBERS OR FROM OUTGOING MEMB ERS. 5. LEARNED DEPARTMENTAL REPRESENTATIVE DOES NOT DIS PUTE THE FACT THAT THE ISSUE IS COVERED BY THE HONBLE JURISDICTIONAL HIGH COURT S DECISION IN THE CASE OF SINDH CO- OPERATIVE HOUSING SOCIETY (SUPRA), EVEN AS HE VEHEM ENTLY RELIES UPON THE STAND OF THE AUTHORITIES BELOW. 6. RESPECTFULLY FOLLOWING THE DECISION OF THE HONB LE JURISDICTIONAL HIGH COURT, WE UPHOLD THE GRIEVANCE OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO TREAT THE TRANSFER FEES RECEIVED FROM INCOMING MEMBERS ALSO A S COVERED BY THE PRINCIPLES OF MUTUALITY, AND, THEREFORE, NOT TO TAX THE SAME AS I NCOME OF THE ASSESSEE. THE ASSESSEE GETS RELIEF ACCORDINGLY. 7. IN THE RESULT, APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT TODAY ON THE 25 TH DAY OF JUNE 2010. SD/- (VIJAY PAL RAO) JUDICIAL MEMBER SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER MUMBAI, DATE: 25TH JUNE 2010 ITA 5220/M/2009 STERLING TOWER CO-OPERATIVE SOCIETY LTD 3 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A)-XXXII, MUMBAI. 4) THE CIT 20, MUMBAI. 5) THE D.R. E BENCH, ITAT, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR CHAVAN* I.T.A.T., MUMBAI ITA 5220/M/2009 STERLING TOWER CO-OPERATIVE SOCIETY LTD 4 SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 14.06.2010 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 14.06.2010 SR.PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS SR.PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS 7 FILE SENT TO THE BENCH CLERK SR.PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER