ITO 16(2)(1), MUMBAI V. SEA FACE PARK CO-OPERATIVE HOUSING SOCIETY KTD, MUMBAI

ITA 5886/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100687 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 17-08-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 04-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMIT KUMAR
• Keywords: Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER ITA NO. 588 6 /MUM/20 13 (ASSESSMENT YEAR: 200 9 - 1 0 ) INCOME - TAX OFFICER 16(2)(1), MUMBAI. APPELLANT VS. M/S.SEA FACE PARK CO - OPERATIVE HOUSING SOCIETY LTD., 50, BHULABHAI DESAI ROAD, MUMBAI - 400 026. RESPONDENT PAN: AAAAS3577R APPELLANT BY : SHRI SUMIT KUMAR (DR) RESPONDENT BY: NONE. DATE OF HEARING: 17 /08/2015 DATE OF PRONOUNCEMENT : : 21 /08/2015 O R D E R PER VIJAY PAL RAO, JM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 23/07/2013 OF THE CIT(A) - 28, MUMBAI, FOR THE ASSESSMENT YEAR 2009 - 10. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN ALLOWING THE EXEMPTION TO TAX THE COMMON AMENITIES FUNDS AND NON - OCCUPANCY CHARGES RECEIVES BY ASSESSEE CO - OP . HOUSING SOCIETY UNDER THE PRINCIPLE OF MUTUALITY WITHOUT ITA NO. 588 6 / MUM/2013 M/S.SEA FACE PARK CO - OPERATIVE SOCIETY LTD. PAGE 2 OF 6 APPRECIATING THE FACT THAT THE RELIANCE PLACED ON DECISION OF HIGH COURT OF BOMBAY IN CASE OF M/S.MITTAL COURT PREMISES CO - OP,HSG.SOCIETY LTD. VS. ITO (320 ITR 414) HAS NOT BEEN ACCEP TED BY REVENUE AND SLP HAS BEEN FILED BEFORE HONBLE SUPREME COURT OF INDIA AGAINST THE SAME. 2. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY ROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY? 3. AT THE TIME OF HEARING, NOBODY APPEARED ON BEHALF OF THE ASSESSEE - RESPONDENT DESPITE NOTICE BY RPAD. HOWEVER, SINCE AN IDENTICAL ISSUE HAS BEEN CONSIDERED BY US IN ANOTHER APPEAL BEARING ITA NO.5888/MUM/2013 IN THE CASE OF M/S.SHYAM CHS LTD. WE PROPOSE TO DISPOSE OF THIS APPEAL OF THE REVENUE EX - PARTE. 4. WE HAVE HEARD THE LEARNED DR AND ALSO CONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED BY US IN THE CASE OF M/S.SHYAM CHS LTD. IN IT A NO.5888/MUM/2013 . THE RELEVANT PART OF THE EVEN DATED ORDER IS AS UNDER: 6. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND CAREFUL PERUSAL OF THE RECORD, AT THE OUTSET WE NOTE THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED AND DECIDED BY THIS TRIBUNAL IN A SSESSEES OWN CASE FOR ASSESSMENT YEAR 2007 - 08 AS WELL AS FOR ASSESSMENT YEAR 2008 - 09. FOR THE EARLIER ASSESSMENT YEAR I.E. 1999 - 2000 TO 2001 - 02, THE MATTER WAS CARRIED TO THE HON'BLE JURISDICTIONAL HIGH COURT AND THE HON'BLE JURISDICTIONAL HIGH COURT VID E ORDER DATED 17/7/2009 IN ITA NOS.92, 93 & 206 OF 2003 HAS DECIDED THE QUESTION AS UNDER: WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE ANY PART OF TRANSFER FEES RECEIVED BY THE ASSESSEE SOCIETIES WHETHER FROM OUTGOING OR ITA NO. 588 6 / MUM/2013 M/S.SEA FACE PARK CO - OPERATIVE SOCIETY LTD. PAGE 3 OF 6 INCOMING MEMBERS IS NOT LIABLE TO TAX ON THE GROUND OF MUTUALITY? THUS, IT IS CLEAR THAT THE ISSUE OF TRANSFER FEE RECEIVED FROM OUTGOING OR INCOMING PERSONS WAS CONSIDERED AND DECIDED IN FAVOUR OF THE ASSESSEE BY HOLDING THAT THE PRINCIPLE OF MUTUALITY IS APPLICABLE ON SUCH RECEIPT/CONTRIBUTION BY THE OUTGOING AND INCOMING PERSONS AND ACCORDINGLY THE SAME IS NOT TAXABLE. FOR THE ASSESSMENT YEAR 2003 - 04 AGAIN, THIS ISSUE WAS CONSIDERED BY THE HON'BLE JURISDICTIONAL HIGH COURT IN INCOME - TAX APPEAL NO.85 OF 2013 WHEREIN TH E QUESTION OF LAW IN REVENUES APPEAL WAS SAME AND DECIDED AS UNDER: WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE TRIBUNAL, WAS JUSTIFIED IN UPHOLDING THE CIT(A)S ORDER AND DISMISSING THE REVENUES APPEAL AND ACCEPTING THE AS SESSEES PLEA THAT THE CONTRIBUTION OF RS.42 LAKHS PAID TOWARDS THE TRANSFER FEES AND PRINCIPLE RS.23,250/ - BEING NON OCCUPANCY CHARGES ARE COVERED BY THE PRINCIPLE OF MUTUALITY AND IS NOT CHARGEABLE TO TAX? . 7. WE FIND THAT SO FAR AS NON OCCUPANCY CHARGES ARE CONCERNED THE SAME HAS NOT BEEN ADMITTED BY THIS COURT IN M/S PANCHRATNA CO HOUSING SOCIETY LTD. (SUPRA). NO ORDER HAS BEEN SHOWN TO THE ISSUE ON NON - OCCUPANCY CHARGES. HOWEVER THERE ARE TWO APPEALS ADMIT TED ON THE ISSUE OF TRANSFER FEES ON 14 TH JUNE 2012 AND 18 TH FEBRUARY 2013 AS RELIED BY THE REVENUE. THE VERY GRIEVANCE RAISED BY THE REVENUE IN THIS APPEAL IN RESPECT OF WAS RAISED BY THE REVENUE IN RESPECT OF TRANSFER FEES WAS RAISED BY THE REVENUE BEFO RE THIS COURT IN DARBHANGA MANSION CO - OP. HOUSING SOCIETY LTD. (SUPRA). THIS COURT BY ORDER DATED 18 TH DECEMBER 2013 DID NOT ACCEPT AN IDENTICAL GRIEVANCE BY OBSERVING THUS: 'WHILE IT MAY BE TRUE THAT IT IS OCCASIONED BY TRANSFER OF A FLAT AND GARAGE, YET, WE DO NOT SEE HOW MERELY BECAUSE THERE WAS CAP OR RESTRICTION PLACED ON THE TRANSFER FEES OR THE QUANTUM THEREOF, IN THIS ITA NO. 588 6 / MUM/2013 M/S.SEA FACE PARK CO - OPERATIVE SOCIETY LTD. PAGE 4 OF 6 CASE THE PRINCIPLE OF MUTUALITY CANNOT BE APPLIED. THE UNDERLYING PRINCIPLE AND OF A CO - OPERATIVE MOVEMENT HAS BEEN COMPLETELY OVERLOOKED BY THE COUNSEL FOR THE REVENUE. THE REVENUE SEEMS TO BE OF THE VIEW THAT A CO - OPERATIVE HOUSING SOCIETY MAKES PROFIT, IF IT RECEIVES SOMETHING BEYOND THIS AMOUNT OF RS.25,000/ - . THERE HAS TO BE MATERIAL BROUGHT AND WHICH WILL HAVE A DEFINITE BEARING ON THIS ISSUE. IF THE AMOUNT IS RECEIVED ON ACCOUNT OF TRANSFER OF A FLAT AND WHICH IS NOT RESTRICTED TO RS.25,000/ - BUT MUCH MORE, THEN DIFFERENT CONSIDERATION MAY APPLY. HOWEVER, IN THE PRESENT CASE, WHAT HAS BEEN ARGUED AND VEHEMENTLY IS THE AMOUNT WAS RECEIVED BY THE SOCIETY WHEN THE FLAT AND THE GARAGE WERE TRANSFERRED. THEREFORE, IT MUST BE PRESUMED TO BE NOTHING BUT TRANSFER FEES. IT MAY HAVE BEEN CREDITED TO THE FUND AND WITH A VIEW TO DEMONSTRAT E THAT IT IS NOTHING BUT A VOLUNTARILY CONTRIBUTION OR DONATION TO THE SOCIETY, BUT STILL IT CONSTITUTES ITS INCOME. HOWEVER, FOR RENDERING SUCH A CONCLUSIVE FINDING THERE HAS TO BE MATERIAL BROUGHT BY THE REVENUE ON RECORD. BEYOND URGING THAT IT HAS BEEN RECEIVED AT THE TIME OF A TRANSFER OF THE FLAT AND CREDITED TO SUCH FUND WILL NOT BE ENOUGH TO DISPLACE THE PRINCIPLE LAID DOWN IN THE DECISION OF SIND CO - OPERATIVE HOUSING SOC I ETY. THE ATTEMPT OF THE REV ENUE THEREFORE IS NOTHING BUT OVERCOMING THE BINDING JUDGMENT OF THIS COURT. IN THE PRESENT CASE, THE COMMISSIONER AND THE TRIBUNAL BOTH HAVE HELD THAT THE RECEIPT MAY HAVE BEEN OCCASIONED BY THE TRANSFER BUT THE PRINCIPLE OF MUTUALITY WILL STILL APPLY IN THE PRESENT CASE, THEREFORE, THE TRIBUNAL FOLLOWING ITS EARLIER VIEWS AND APPLYING THE RATIO OF THIS JUDGMENT, DISMISSED THE REVENUE'S APPEAL AND CONFIRMED THE COMMISSIONER'S FINDING. THE CONCURRENT FINDIN GS, ITA NO. 588 6 / MUM/2013 M/S.SEA FACE PARK CO - OPERATIVE SOCIETY LTD. PAGE 5 OF 6 THEREFORE, IN THIS CASE ARE IN CONSONANCE WITH THE FACTUAL MATERIALS BROUGHT ON RECORD. THERE IS SUBSTANCE IN THE ARGUMENT OF MR.IRANI THAT THE ASSESSING OFFICER BEFORE HIM THE MATERIAL IN THE FORM OF THE BYE - LAWS OF THE SOCIETY. THE BYE - LAWS ALSO ARE IN CONSONANCE WITH THE GOVERNMENT RESOLUTION AND STIPULATE A SUM OF RS.25,000/ - TOWARDS TRANSFER FEES. THE ASSESSEE IN THIS CASE IS PRESUMED TO HAVE RECEIVED NOTHING BUT TRANSFER FEES AND IT IS THAT UNDERLYING PRESUMPTION WHICH HAS PREVAI LED UPON THE ASSESSING OFFICER TO TAKE A PARTICULAR VIEW. 12. WE FIND THAT THE ASSESSING OFFICER HAS BEEN THEREFORE, RIGHTLY CORRECTED BY THE COMMISSIONER. WITHOUT ANY MATERIAL, COGENT AND SATISFACTORY, BEING PRODUCED, THE SUM AND IN ITS ENTIRETY AS CRE DITED COULD NOT BE ASSUMED TO BE TRANSFER FEES. THE RECEIPT THEREOF MAY HAVE BEEN OCCASIONED BY THE TRANSFER OF THE FLAT AND GARAGE.' 8. IN THIS CASE ALSO, NOTHING HAS BEEN BROUGHT ON RECORD TO INDICATE THAT THE RESPONDENT HAD RECEIVED MORE AMOUNTS THAN ALLOWED/PERMITTED IN THE STATE GOVERNMENT CIRCULAR DATED 9 TH AUGUST 2001. FURTHER IN THE RESPONDENT - ASSESSEES OWN CASE, THIS COURT HAS DECIDED THE ISSUE IN ITS FAVOUR AND IN THE ABSENCE OF ANY DISTINGUISHING FEATURE, THE TRIBUNAL WAS OBLIGED TO FOLLOW THE SAME. THIS IS PRECISELY WHAT THE IMPUGNED ORDER HAS DONE. THUS, AS THE ISSUE IS COVERED IN FAVOUR OF THE RESPONDENT - ASSESSEE BY ORDER OF THIS COURT DATED 17 TH JULY 2009 (INCOME TAX APPEAL NO.92,93 AND 208/2008) NO SUBSTANTIA1 QUESTION OF LAW A RISES IN THIS CASE. THUS IT IS CLEAR THAT THE ISSUE RAISED BY THE REVENUE IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE ASSESSEES OWN CASE. THOUGH THE REVENUE HAS CONTENDED THAT IT HAS NOT ACCEP TED THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT AND FILED A SLP BEFORE THE HON'BLE SUPREME COURT, HOWEVER, IN THE ABSENCE OF ANY STAY OR REVISION OF THE DECISION OF THE ITA NO. 588 6 / MUM/2013 M/S.SEA FACE PARK CO - OPERATIVE SOCIETY LTD. PAGE 6 OF 6 HON'BLE JURISDICTIONAL HIGH COURT, IT IS A BINDING PRECEDENT FOR THIS TRIBUNA L. RESPECTFULLY FOLLOWING THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE CIT(A). IN VIEW OF THE ABOVE, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF THE CIT(A) AND IS TH EREFORE UPHELD. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 21 ST AUGUST, 2015. SD/ - SD/ - (N.K.BILLAIYA) (VIJAY PAL RAO) ACCOUNANT MEMBER JUDICIAL MEMBER EKSRINIVASULU, SR.PS COPY TO: 1. A PPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, MUMBAI. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL MUMBAI