ITO 16(1)(1), MUMBAI V. STERLING CO. OP HSG SOC. LTD, MUMBAI

ITA 6527/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79291 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 15-07-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 29-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PITAMBAR DAS

Judgement Text

, ( ), IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI . . , , . . ! , '# $% BEFORE SHRI H L KARWA, PRESIDENT, & SHRI P M JAGTAP , AM ./ITA NO.6527/MUM/2012 ( & ' / ASSESSMENT YEAR : 2009-10) ITO 16(1)(1), MUMBAI VS. M/S. STERLING CO - OP HSG. SOC. LTD. 38, PEDDAR ROAD, MUMBAI - 400026 PAN : AAAJS1912M ( () /APPELLANT) ( *+() / RESPONDENT) APPELLANT BY : MR. PITAMBAR DAS RESPONDENT BY : MR. VISHWAS MEHENDALE DATE OF HEARING : 15.07.2014 DATE OF PRONOUNCEME NT : 15.07.2014 $', / O R D E R PER H L KARWA, PRESIDENT : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE CIT(A)- 27, MUMBAI, DATED 23.08.2012, RELATING TO A.Y. 2009 -10. 2. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOW ING GROUNDS: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING HE ADDITION ON ACCOUNT OF TRANSFER CHARGES OF RS.41,22,000/- (TRANSFER FEE/COMMON AMEN ITIES FUND, RENOVATION CHARGES). 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O N ACCOUNT OF NON- OCCUPANCY CHARGES OF RS.1,44,200/- 3. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES AT LENGTH AND HAVE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD . IT IS OBSERVED THAT BOTH THE ISSUES RAISED IN THIS APPEAL ARE SQUARELY COVERED I N FAVOUR OF THE ASSESSEE AND 2 ITA NO.6527/MUM/2012 AY:2009-10 AGAINST THE REVENUE BY THE ORDER OF THIS BENCH DATE D 23.11.2012 PASSED IN ASSESSEES CASE IN ITA NO. 8197/MUM/2011 RELATING T O A.Y. 2008-09. WHILE DECIDING SIMILAR ISSUES, THE TRIBUNAL IN ITS ORDER REFERRED TO ABOVE HAS OBSERVED AND HELD AS UNDER: 3. AT THE OUTSET, SHRI VISHWAS V. MEHENDALE, LD C OUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE JUDGMENTS OF JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. SHYAM CHS VIDE ITA NO.92, 93, 206 OF 2009, DATED 17.7.2009 AND SUPRABHAT CHS VIDE ITA NO. 1972 OF 2009, DATED 1.10.2009 AND MENTIONED THAT THE HONBLE HIGH COURT HAS HELD THAT THE TRANSFER FEE RECEIPTS ARE EXEMPT FROM THE TAX ON TH E PRINCIPLES OF MUTUALITY. THUS, THE ISSUE OF TAXABILITY OF TRANSFE R FEE STANDS COVERED IN FAVOUR OF THE ASSESSEES BY THE SAID DECISIONS. RE GARDING APPLICABILITY OF PRINCIPLE OF MUTUALITY TO NON-OCCUPANCY CHARGES, ASSESSEE BROUGHT OUR ATTENTION TO PARA 4.1 OF THE IMPUGNED ORDER AND MENTIONED THAT THIS ISSUE IS ALSO ENJOYS THE EXEMPTION IN VIEW OF THE PRINCIPLE OF MUTUALITY AS HELD BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF MITTAL COURT CO-OPERATIVE HSG. SOCIETY (2009) 184 TAXMAN 2 92 AND ALSO IN THE CASE OF SUPRABHAT CHS (SUPRA). 4. ON THE OTHER HAND, LD DR RELIED ON THE ORDERS OF THE AO. 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE OR DERS OF THE REVENUE PARA 3, 4 AND 4.1 OF THE IMPUGNED ORDER. CO NSIDERING THE REQUIREMENT OF THE SAID PARAGRAPHS THEY ARE REPRODU CED AS UNDER: 3. DURING THE PROCEEDINGS BEFORE ME, THE AR SUBMI TTED THAT IN VIEW OF THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASES OF SIND HOUSING SOCIETY AND MITT AL COURT COOPERATIVE HSG. SOCIETY WHERE THEIR LORDSHIP S HAD GIVEN A JUDGMENT THAT THE TRANSFER FEE AND NON OCCUPANCY CHARGES RECEIVED BY THE HOUSING SOCIETY A RE EXEMPT TO TAX UNDER PRINCIPLE OF MUTUALITY, THE ADD ITION MADE BY THE AO SHOULD BE DELETED. THE AR ALSO ARGUE D THAT MISCELLANEOUS RECEIPTS INCLUDE RENT OF RS. 6,0 00 COLLECTED FROM THE MEMBERS OF THE SOCIETY FOR USING THE GARDEN AND IT IS NOT FROM GIVING THE PROPERTY ON RE NT TO ANY OUTSIDERS. AS REGARDS THE BALANCE AMOUNT OF RS. 5000 REALIZED ON SALE OF SCRAP THE AR HAS NOT PRESS ED THE GROUNDS. 3 ITA NO.6527/MUM/2012 AY:2009-10 4. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE BY THE APPELLANT. AS REGARDS THE TRANSFER FEE RECEIVED , THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SIND COOPERATIVE HSG. SOCIETY STATED IN ONE OF THE PARAG RAPHS OF THE ORDER THAT TRANSFER FEE RECEIVED BY THE HOUS ING SOCIETY IS EXEMPT UNDER THE PRINCIPLE OF MUTUALITY, BUT, THEY HAD ALSO STATED IN THEIR ORDER THAT ANY AMOUNT TAKEN BY THE SOCIETY WHICH IS IN EXCESS OF GOVERNMENT RUL ES, AS LAID DOWN BY THE MAHARASHTRA COOPERATIVE SOCIETIES ACT WOULD EITHER HAVE TO BE REFUNDED TO THE MEMBER OF T HE SOCIETY OR THE AMOUNT WOULD BE HELD TO BE TAXABLE A S THERE WAS AN ELEMENT OF PROFITEERING IN IT. SUBSEQU ENTLY, HONBLE BOMBAY HIGH COURT IN THE CASE OF M/S. SHYAM CHS IN ITA NO. 92, 93, 206 OF 2009 VIDE THEIR ORDER S DATED 17 TH JULY, 2009 AND SUPRABHAT CHS IN ITA NO. 1972 OF 2009 VIDE THEIR ORDERS DATED 1.10.2009, HAS CLEA RLY STATED THAT ALL THE AMOUNTS RECEIVED BY THE CHS ON ACCOUNT OF TRANSFER FEE ARE EXEMPT TO TAX UNDER THE PRINCIPLE OF MUTUALITY. SINCE THE ISSUE IS NOW FULL Y CLARIFIED BY THE SUBSEQUENT JUDGMENTS OF THE HONBLE BOMBAY HIGH COURT, THE AMOUNT OF TRANSFER FEES CONSIDERED BY THE AO AS APPELLANTS INCOME AMOUNTING TO RS. 14,65,000/- STANDS DELETED AND THIS GROUND OF APPEA L IS ALLOWED. 4.1. SECONDLY, THE HONBLE BOMBAY HIGH COURT IN TH E CASES OF MUTTAL COURT COOPERATIVE HSG. SOCIETY (2009) 184 TAXMAN 29 2 AND SUPRABHAT CHS IN ITA NO. 12972 OF 2009 VIDE THEIR ORDERS DATE D 1.10.2009, HAS CLEARLY STATED THAT ALL THE AMOUNTS RECEIVED BY THE CHS ON ACCOUNT OF NON OCCUPANCY CHARGES ARE EXEMPT TO TAX UNDER THE P RINCIPLE OF MUTUALITY. SINCE THE ISSUE IS NOW FULLY SETTLED BY THE JUDGMENTS OF THE HONBLE BOMBAY HIGH COURT, THE NON OCCUPANCY CHARGE S CONSIDERED BY THE AO AS APPELLANTS INCOME AMOUNTING TO RS. 3,27, 640/- ALSO STANDS DELETED AND THIS GROUND OF APPEAL IS ALLOWED. 6. FROM THE ABOVE IT IS EVIDENT THAT THE ISSUES R ELATING TO TAXABILITY OF TRANSFER FEE RECEIPTS AND NON-OCCUPANCY CHARGES UNDER THE PRINCIPLE OF MUTUALITY ARE COVERED BY THE JUDGMENT OF JURISDI CTIONAL HIGH COURT IN THE CASES OF M/S. SHYAM CHS (SUPRA), SUPRABHAT CHS (SUPRA) AND MITTAL COURT CO-OPERATIVE HSG. SOCIETY (SUPRA) IN F AVOUR OF THE ASSESSEE. THEREFORE, CONSIDERING THE SPEAKING ORDER OF THE CIT (A) WHO DECIDED THE ISSUES AGAIN RELYING ON THE BINDING JURISDICTIONAL HIGH 4 ITA NO.6527/MUM/2012 AY:2009-10 COURT JUDGMENTS, WE ARE OF THE OPINION THAT ORDER O F THE CIT (A) DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMIS SED. 4. THERE IS NO CHANGE IN THE FACTS OF THE CASE AS C OMPARED TO THAT OF A.Y. 2008- 09. THE ISSUES INVOLVED IN THIS YEAR ARE SIMILAR TO THAT OF A.Y. 2008-09. RESPECTFULLY, FOLLOWING THE ORDER OF THE TRIBUNAL F OR A.Y. 2008-09 PASSED IN ASSESSEES OWN CASE, WE DO NOT SEE ANY MERIT IN THE APPEAL FILED BY THE REVENUE. CONSEQUENTLY, WE DISMISS THE APPEAL 5. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DAY OF JULY, 2014. SD/- SD/- (P M JAGTAP) (H L KARWA) ACCOUNTANT MEMBER PRESIDENT MUMBAI, DT :15 TH JULY, 2014 SA COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE C.I.T, CONCERNED 4. THE CIT (A)-CONCERNED 5. THE DR, MUMBAI E BENCH BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI