M/S. PUNAM CO-OP HSG. SOC. LTD, MUMBAI V. THE ITO WD 16(2)(1), MUMBAI

ITA 5919/MUM/2007

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1618 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 14-09-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMOL KAMAL
• Assessee Lawyers: DILIP K SHETH
• Keywords: Set aside
• Section: 205

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: MUMBAI BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACCOUNTANT MEMBER ITA NO 5919/MUM/2007 (ASSESSMENT YEAR: 2004-05) PUNAM CO-OP HSG SOC LTD, 67, NAPEAN SEA ROAD, MUMBAI -400 006 PAN: AAATP 1723 F VS ACIT -8(1), MUMBAI APPELLANT RESPONDENT APPELLANT BY: SHRI DILIP K SHETH RESPONDENT BY: SHRI AMOL KAMAL ORDER PER T.R. SOOD, ACCOUNTANT MEMBER IN THIS APPEAL THE ASSESSEE HAS RAISED FOLLOWING TH REE GROUNDS:- 1. THE CIT (APPEALS) ERRED IN DIRECTING THE ASSESS ING OFFICER (AO) TO TAX A PORTION OF RS 39,350 BEING THE NON-OCCUPANCY CHARGE S RECEIVED BY THE APPELLANT FROM ITS MEMBERS. 2. THE CIT (APPEALS) ERRED IN CONFIRMING THE ADDITI ON OF RS 93,000 BEING THE TRANSFER FEES RECEIVED BY THE APPELLANT ON TRANSFER OF FLATS AND OF A PARKING LOT. 3. THE CIT (APPEALS) ERRED IN CONFIRMING THE ADDITI ON OF RS 7,14,000 RECEIVED BY THE APPELLANT FROM ITS MEMBERS AS CONTRIBUTION T O MAJOR REPAIRS FUND. 2. GROUND: THE LEARNED COUNSEL FOR THE ASSESSEE SUB MITTED THAT RECENTLY THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY HONBLE BOMBAY HIGH COURT IN CASE OF MITTAL COURT PREMISES CHS LTD IN ITA 999, 1028 A ND 1029 OF 2004. HE READ INTO VARIOUS PARAGRAPHS TO EMPHASIS THAT ISSUE INVOLVED BEFORE US WAS IDENTICALLY THE SAME. HOWEVER, IT WAS NOTICED BY THE BENCH THAT SIGNATURE OF THE HONBLE JUDGES APPEARING ON PAGE 11 WHEREAS THE SOME PORTION OF THE JUDGMENT IS THEIR ON PAGE 12. THE BENCH ITA 5919/M/2007 PUNAM CO-OP HSG SOC LTD 2 SOUGHT CLARIFICATION BUT LEARNED COUNSEL COULD NOT CLARIFY THIS SITUATION. HOWEVER, HE AGREED HE WOULD OBTAIN A CERTIFIED COPY AND FILED T HE SAME BEFORE LOWER AUTHORITIES. THEREFORE, WE SET ASIDE THE ORDER OF LEARNED CIT (A ) TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE THIS ISSUE ON THE BASIS OF DECISION OF HONBLE BOMBAY HIGH COURT IN CASE OF MITTAL COURT PREMISES CO-OPERATIVE SOCIETY. 3. GROUND 2: AFTER HEARING BOTH THE PARTIES WE FIND THAT THIS ISSUE HAS BEEN RECENTLY DECIDED BY HONBLE BOMBAY HIGH COURT IN CA SE OF SIND CO-OPERATIVE HOUSING SOCIETY VS ITO (317 ITR 47) WHEREIN IT WAS HELD THA T TRANSFER FEE RECEIVED FROM MEMBERS WOULD BE COVERED BY THE MUTUALITY CONCEPT. RESPECT FULLY FOLLOWING THIS DECISION, WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE. 4. GROUND 3: AFTER HEARING BOTH THE PARTIES WE FIND THAT DURING ASSESSMENT PROCEEDINGS ASSESSING OFFICER NOTICED THAT ASSESSEE HAD RECEIVED A SUM OF RS 7,14,000/- UNDER THE HEAD MAJOR REPAIRS, RENOVATION, PLUMBING AND PAINTING ACCOUNT. THE CONTRIBUTION WAS RECEIVED FROM TWO MEMBERS NAMELY M RS C K POOJARA AND MRS RAJANI SARIN. IT WAS CLAIMED THAT THESE PAYMENTS WERE REC EIVED ON ACCOUNT OF EXTRA REPAIRS AND MAINTENANCE AND, THEREFORE, SAME WERE NOT TAXABLE O N THE GROUND OF MUTUALITY. ASSESSING OFFICER FURTHER NOTICED THAT THESE TWO LA DIES HAD SOLD THE FLATS AND, THEREFORE, A QUERY WAS RAISED WHY SUCH HUGE CONTRIBUTIONS WAS RE CEIVED ONLY FROM THESE TWO OUTGOING MEMBERS. HOWEVER, NO SATISFACTORY EXPLANA TION WAS GIVEN AND EVEN CORRESPONDENCE WAS ALSO NOT FURNISHED. NO PROOF WA S GIVEN IN RESPECT OF THE REPAIRS TO THE SAID FLATS ACCORDINGLY THIS SOME WAS TREATED AS TAXABLE. 5. ON APPEAL THE ADDITION WAS CONFIRMED BY CIT (A). BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO PAGE 54 OF THE PAPER B OOK AND SUBMITTED THAT THERE WAS OUTSTANDING BALANCE ON ACCOUNT OF CONTRIBUTION FROM EARLIER YEAR AMOUNTING TO RS 66,11,122/- AND IN THIS YEAR SPECIAL CONTRIBUTION W AS TAKEN FROM TWO MEMBERS BECAUSE SOME MAJOR REPAIRS WERE REQUIRED. THEN HE POINTED OUT THAT A SUM OF RS 53,72,895/- ITA 5919/M/2007 PUNAM CO-OP HSG SOC LTD 3 HAVE ALREADY BEEN SPENT ON ACCOUNT OF REPAIRS ETC A ND, THEREFORE, NO SEPARATE ADDITION COULD HAVE BEEN MADE ON THIS ACCOUNT. 6. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESEN TATIVE SUBMITTED THAT CONTRIBUTION WAS TAKEN FROM TWO LADY MEMBERS WHO HA VE ALREADY SOLD THE FLATS AND ASSESSEE HAD NOT EXPLAINED WHY THESE CONTRIBUTIONS HAVE BEEN TAKEN. EVEN PROOF OF EXPENDITURE WAS ALSO NOT GIVEN AND, THEREFORE, ADDI TION WAS JUSTIFIED. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSION CAREFULL Y. IT IS NOT CLEAR WHY THIS SPECIAL CONTRIBUTION WAS TAKEN FROM ONLY TWO MEMBERS AND TH AT TOO FROM THE MEMBERS WHO HAVE ALREADY SOLD THE FLATS. WE FURTHER FIND THAT EXPEN DITURE AMOUNTING TO RS 53,72,895/- SEEMS TO BE GENERAL REPAIR EXPENSES BUT IF ANY SPEC IFIC EXPENDITURE HAS BEEN INCURRED ON ACCOUNT OF THESE FLATS THEN SAME HAS TO BE REDUCED. THEREFORE, WE SET ASIDE THE ORDER OF CIT (A) AND REMIT THE MATTER BACK TO THE FILE OF TH E ASSESSING OFFICER FOR FRESH EXAMINATION OF THE ISSUE WITH A DIRECTION THAT IF A SSESSEE CAN PROVE ANY SPECIFIC EXPENDITURE ON ACCOUNT OF REPAIRS IN RESPECT OF THE SE TWO FLATS AND THEN SAME MAY BE REDUCED FROM THE CONTRIBUTION. AS FAR AS THE CONCE PT OF MUTUALITY IS CONCERNED SAME IS NOT APPLICABLE BECAUSE THIS CONTRIBUTION HAS BEEN T AKEN ONLY FROM THE TWO MEMBERS AND, THEREFORE, THERE IS COMPLETE IDENTITY BETWEEN THE C ONTRIBUTORS AND BENEFICIARIES. 8. IN THE RESULT, APPEAL IS PARTLY ALLOWED FOR STAT ISTICAL PURPOSES. ORDER PRONOUNCED ON 18TH DAY OF NOVEMBER 2009. SD/- (R.K. GUPTA) JUDICIAL MEMBER SD/- (T. R. SOOD) ACCOUNTANT MEMBER MUMBAI, DATE: 18TH NOVEMBER 2009 ITA 5919/M/2007 PUNAM CO-OP HSG SOC LTD 4 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) XVI, MUMBAI. 4) THE CIT- XVI, MUMBAI. 5) THE DR C BENCH, ITAT, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR CHAVAN* I.T.A.T., MUMBAI ITA 5919/M/2007 PUNAM CO-OP HSG SOC LTD 5 SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 12.11.09 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 16.11.09 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 ITA 5919/M/2007 PUNAM CO-OP HSG SOC LTD 6 1) CIT VS ASHOK LELAND LTD 86 ITR 549 (SC)1972 2) JOHN SMITH & SONS VS MOORE 12 TC 266 (HL)(1921 ) 3) ANGLO PERSIAN OIL CO VS DALE 16 TC 253 (1932) 4) BRITISH INSULATED & HELSBY CABLES LTD VS ATHERTON (1926) AC 205 (HL) 5) VALLAMBROSA RUBBER CO LTD VS FARMER 5 TC 529 (1910) 6) OUNSWARTH VS VICKERS LTD 3 KB 267 (1950) 7) BANARSIDAS JAGANNATH IN RE 15 ITR 185 (1947) 8) ASSAM BENGAL CEMENT CO LTD VS CIT 27 ITR 34(SC) (1955) 9) INDIAN MOLLASSES CO PVT LTD VS CIT 37 ITR 66 (S C) (1959) 10) HYLAM LTD VS CIT 87 ITR 310 (1973) 11) CIT VS COALSHIPMENTS PVT LTD 82 ITR 902 (1971)