THE GREATER BOMBAY CHS LTD, MUMBAI V. ITO 21(2)(4), MUMBAI

ITA 6250/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92533 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 19-05-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 25-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR BORA
• Assessee Lawyers: K R LAKSHMI NARAYANAN

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI N.K . BILLAIYA, A CCOUNTANT M EMBER / I .T.A. NO . 6250/MUM/2013 ( / ASSESSMENT YEAR : 2009 - 10 THE GREATER BOMBAY CHS LTD., NUPUR, GULMOHAR CROSS ROAD NO. 4, JVPD SCHEME, MUMBAI - 400 049 / VS. THE ITO 21(2)(4), PRATYAKSHA KAR BHAVAN, BANDRA KURLA COMPLEX, MUMBAI - 400 051 ./ ./ PAN/GIR NO. : AAAAT 7754R ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI K.R. LAKSHMINARAYANAN / RESPONDENT BY : SHRI VIJAY KUMAR BORA / DATE OF HEARING : 19 . 0 5 .2015 / DATE OF PRONOUNCEMENT : 22 .0 5 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS IS AN APPEAL BY THE ASSESSEE PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) - 32 , MUMBAI DT. 19 . 09 .201 3 PERTAINING TO ASSESSMENT YEAR 2009 - 10. 2. THE ASSESSEE HAS RAISED 11 GROUNDS OF APPEAL. HOWEVER, AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE ONLY ITA. NO. 6250/M/2013 2 SUBSTANTIVE GROUND OF APPEAL WHICH HE IS PRESSING IS GROUND NO. 2. ALL OTHER GROUNDS ARE TREATED AS DISMISSED AS NOT PRESSED. 3. GROUND NO. 2 READS AS UNDER: THE LD. CIT(A) ERRED IN NOT DELETING THE TWO ADDITIONS OF RS. 2,75,000/ - OUT OF RS.3,00,000/ - AND RS. 44,42,840/ - MADE BY THE AO ON THE ALLEGED GROUND THAT THE SAID AMOUNTS REPRESENT TRANSFER FEE AND TDR PREMIUM RECE IVED BY THE SOCIETY FROM SHRI RAJAN KUMAR MANCHANDA AND M/S. MAA PADMAVATI BUILD TECH LTD. RESPECTIVELY. 4. THE ASSESSEE IS A CO - OPERATIVE HOUSING SOCIETY. RETURN FOR THE YEAR WAS SELECTED FOR SCRUTINY UNDER CASS. WHILE SCRUTINIZING THE RETURN OF INC OME, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS RECEIVED RS. 3 LAKHS FROM ONE MR. RAJAN KUMAR MANCHAND AS CONTRIBUTION TO SOCIETY PLOTS DEVELOPMENT FUND. THE AO FURTHER FOUND THAT THE ASSESSEE HAS RECEIVED RS. 44,42,840/ - FROM MAA PADMAVATI BUILD T ECH PVT. LTD. THE ASSESSEE WAS ASKED TO EXPLAIN WHY THESE RECEIPTS SHOULD NOT BE TAXED AS INCOME FROM OTHER SOURCES AS THE CONCEPT MUTUALITY DOES NOT APPLY TO THESE RECEIPTS. THE ASSESSEE FILED A DETAILED REPLY EXPLAINING THE NATURE OF TRANSACTION. IN S UPPORT OF ITS SUBMISSION, THE ASSESSEE STRONGLY RELIED UPON THE DECISION OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF SIND CO - OP. HSG SOC. LTD. 317 ITR 47. 4.1. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, THE AO WAS OF THE OPINION THAT THER E IS LACK OF COMPLETE IDENTITY BETWEEN THE CONTRIBUTOR AND THE PARTICIPATOR AS IT IS THE MEMBERS WHO CONTRIBUTE TO THE FUNDS BUT THE BENEFITS ARE ENJOYED BY THE MEMBERS AS WELL AS NON MEMBERS ALSO WHO HAVE PURCHASED THE FLATS IN THE MULTISTORIED BUILDINGS CONSTRUCTED BY THE MEMBERS ON THE PLOT. ACCORDING TO THE AO, THE PRINCIPLE OF MUTUALITY DO NOT APPLY. THE AO CONCLUDED BY MAKING ADDITION OF RS. 2,75,000/ - ON ITA. NO. 6250/M/2013 3 ACCOUNT OF TRANSFER FEE AND RS. 44,42,840/ - ON ACCOUNT OF PREMIUM ON TDR. 5. THE ASSESSEE CAR RIED THE MATTER BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. 6. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN SUBMITTED BEFORE THE LOWER AUTHORITIES. IN SUPPORT, THE LD. COUNSEL FILED A PAPER BOOK CONTAINING JUDICIAL DECISIONS I N FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. IN SO FAR AS THE TAXABILITY OF TRANSFER FEE IS CONCERNED, WE FIND THAT AN IDENTICAL ISSUE AROSE IN THE CASE OF THE ASSESSEE IN A.Y. 2002 - 03, 2003 - 04 AND 2004 - 05 AND THE TRIBUNAL IN ITA NO S . 3844 TO 3846/M/ 2012 HAS DECIDED THAT THE TRANSFER FEE , EVEN IF IT IS IN EXCESS OF THE LIMITS PRESCRIBED BY THE STATE GOVERNMENT IS NOT TAXABLE ON ACCOUNT OF PRINCIPLE OF MUTUALITY. RESPECTFULLY FOLLOWING THE DECISION OF THE CO - ORDINATE BENCH IN ASSESSEES OWN CASE, ADD ITION MADE ON ACCOUNT OF TRANSFER FEE IS DELETED. 6.1. IN SO FAR AS THE TDR PREMIUM IS CONCERNED, WE FIND THAT SIMILAR ISSUE HAS BEEN DECIDED BY THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF JAI HIND CHS LTD 349 ITR 541 WHEREIN THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD AS UNDER: HELD DISMISSING THE APPEAL, THAT THE TRANSFERABLE DEVELOPMENT RIGHTS PREMIUM WAS A PAYMENT MADE BY A MEMBER OF THE ASSESSEE, AS A CONSIDERATION FOR BEING PERMITTED TO MAKE AN ADDITIONAL UTILIZATION OF THE FS I ON THE PLOT ALLOTTED BY THE ASSESSEE. THE ASSESSEE WHICH LOOKED AFTER THE INFRASTRUCTURE, REQUIRED THE PAYMENT OF THE PREMIUM IN ORDER TO DEFRAY THE ADDITIONAL BURDEN THAT MUST BE CAST AS A RESULT OF THE UTILIZATION OF THE FSI. THE POINT, HOWEVER, WAS THAT THERE WAS A COMPLETE MUTUALITY BETWEEN THE ASSESSEE AND ITS MEMBERS. THE AMOUNT WAS NOT TAXABLE. ITA. NO. 6250/M/2013 4 RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT, THE ADDITION MADE ON ACCOUNT OF PREMIUM ON TDR IS DIRECTED TO BE DELET ED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. OR DER PRONOUNCED IN THE OPEN COURT ON 22 ND MAY , 2015 SD/ - SD/ - ( JOGINDER SING ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 22 ND MAY , 2015 . . ./ RJ , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI