ITO 3(1)(4), MUMBAI V. FREE PRESS HOUSE LTD, MUMBAI

ITA 5249/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88415 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 29-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHHIDANAND DUBE
• Assessee Lawyers: P M JOHN

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F BE NCH, MUMBAI , !' #$% , !& ! ' BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./I .T.A. NO. 5249/MUM/2013 ( ( ( ( ( / ASSESSMENT YEAR : 2010-11 THE ITO 3(1)(4), AAYAKAR BHAVAN, MUMBAI-400 020 / VS. M/S. FREE PRESS HOUSE LTD., 215, FREE PRESS HOUSE, GROUND FLOOR, FREE PRESS JOURNAL MARG, NARIMAN POINT, MUMBAI-400 021 ) !& ./ * ./ PAN/GIR NO. : AAACF 0616Q ( )+ / APPELLANT ) .. ( ,-)+ / RESPONDENT ) )+ . ! / APPELLANT BY: SHRI SACHHIDANAND DUBE ,-)+ / . ! / RESPONDENT BY: SHRI P.M. JOHN / 01& / DATE OF HEARING :18.02.2015 23( / 01& / DATE OF PRONOUNCEMENT :18.02.2015 !4 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST TH E ORDER OF THE LD. CIT(A)-6, MUMBAI DT. 2.05.2013 PERTAINING TO AS SESSMENT YEAR 2010- 11. 2. THE SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD . CIT(A) ERRED IN DELETING THE ADDITION OF RS. 11,65,000/- BEING THE AMOUNT RECEIVED BY THE ASSESSEE FROM TRANSFEREE. ITA NO. 5249/M/2013 2 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE SOCIETY IS A COMPANY INCORPORATED UNDER THE COMPANIES ACT FOR MA NAGING THE AFFAIRS OF PROPERTY MAINTENANCE ON BEHALF OF THE SHARE HOLD ERS WHO ARE ALSO THE OCCUPANTS OF THE BUILDING CALLED FREE PRESS HOUSE AT NARIMAN POINT, MUMBAI. WHILE SCRUTINIZING THE RETURN OF INCOME A ND THE AUDIT REPORT, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS R ECEIVED CONTRIBUTION TOWARDS COMMON AMENITY FUND OF RS. 11,65,000/- FROM INCOMING MEMBERS. THE AO OBSERVED THAT THIS IS IN EFFECT A T RANSFER FEE CHARGED FROM THE INCOMING MEMBERS. THE ASSESSEE WAS ASKED T O EXPLAIN WHY PRINCIPLE OF MUTUALITY IS CLAIMED ON THIS AMOUNT WH EN THE SAME DOES NOT APPLY. THE ASSESSEE FILED A DETAILED REPLY. IT WA S BROUGHT TO THE NOTICE OF THE AO THAT IN ASSESSMENT YEAR 2008-09 THE FIRST AP PELLATE AUTHORITY HAS ALLOWED THE CLAIM OF TRANSFER FEE. THE AO AT PARA- 8 OF HIS ORDER OBSERVED THAT THE REVENUE IS IN APPEAL AGAINST THE ORDER OF THE LD. CIT(A), THEREFORE TRANSFER FEE OF RS. 11.65 LAKHS RECEIVED BY THE ASSESSEE FROM THE INCOMING MEMBERS IS AUDITED TO THE TOTAL INCOME OF THE ASSESSEE. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A). FOLLOWING THE ORDER OF THE FIRST APPELLATE AUTHORITY FOR A.Y. 2008-09, THE LD. CIT(A) ALLOWED THE APPEAL. 5. AGGRIEVED BY THIS, REVENUE IS BEFORE US. 6. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSE SSEE STATED THAT THE TRIBUNAL IN ITA NO. 3044/M/2012 FOR A.Y. 2008-09 HA S CONFIRMED THE ORDER OF THE LD. CIT(A) THEREFORE THIS APPEAL IS SQ UARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. ITA NO. 5249/M/2013 3 7. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT BRING ANY DISTINGUISHING FACTS/DECISION IN FAVOUR OF THE REVENUE. 8. WE HAVE CAREFULLY PERUSED THE ORDER OF THE AUTHO RITIES BELOW AND THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE . WE FIND THAT THE TRIBUNAL AFTER CONSIDERING THE FACTS AND THE SUBMIS SIONS HAS RELIED UPON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN TH E CASE OF SIND CO- OPERATIVE HOUSING SOCIETY VS ITO 317 ITR 47. THE F INDING OF THE TRIBUNAL READS AS UNDER: WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENTIO NS HAVE CAREFULLY BEEN CONSIDERED. THE SITUATION MENTIONED IN THE GRO UNDS OF APPEAL AND ARGUED BY LD. DR HAS BEEN TAKEN CARE IN THE DECISION OF TO HONBLE BOMBAY HIGH COURT IN THE CASE OF SIND CO-OPERATIVE HOUSING SOCI ETY LTD.(SUPRA). THE RELEVANT OBSERVATIONS HAVE ALREADY BEEN POINTED OUT BY LD. AR. KEEPING IN VIEW THE ENTIRETY OF FACTS AND CASE LAW RELIED UPON BY THELD. AR, WE ARE OF THE OPINION THAT LD. CIT(A) DID NOT COMMIT ANY ERROR IN DELETING THE DISALLOWANCE OF RS.11,40,000/-. ACCORDING TO THE FACTS OF THE CA SE WHICH HAVE BEEN DISCUSSED IN THE ABOVE PART OF THIS ORDER AND ABOVE DECISION OF HONBLE BOMBAY HIGH COURT, THE IMPUGNED AMOUNT WILL BE GOVE RNED BY THE PRINCIPLE OF MUTUALITY AND CANNOT BE BROUGHT TO TAX. WE DECL INE TO INTERFERE AND UPHOLD THE ORDER OF LD. CIT(A). RESPECTFULLY FOLLOWING THE DECISION OF THE CO ORDI NATE BENCH, WE DECLINE TO INTERFERE WITH THE FINDINGS OF THE LD. C IT(A). 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON 18 TH FEBRUARY, 2015. SD/- SD/- (VIJAY PAL RAO ) (N.K. BILLAIYA) /JUDICIAL MEMBER !& / ACCOUNTANT MEMBER MUMBAI; 5 DATED : 18 TH FEBRUARY, 2015 . . ./ RJ , SR. PS ITA NO. 5249/M/2013 4 !4 !4 !4 !4 / // / ,0 ,0 ,0 ,0 6!(0 6!(0 6!(0 6!(0 / COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,-)+ / THE RESPONDENT. 3. 7 ( ) / THE CIT(A)- 4. 7 / CIT 5. 89 ,0 , , / DR, ITAT, MUMBAI 6. 9: / GUARD FILE. !4 !4 !4 !4 / BY ORDER, -0 ,0 //TRUE COPY// ; ;; ; / < < < < (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI