ITO 16(2)(1), MUMBAI V. SU BHAT CO. OP. HSG. SOCIETY LTD, MUMBAI

ITA 6550/MUM/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 6365 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 28-10-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 23-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R K BOTHRA

Judgement Text

1 ITA 6550/M/09, SU PRABHAT CO.OP. HSG. SOCIETY LTD . IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H BEFORE SHRI P.M. JAGTAP, A.M. AND SMT. ASHA VIJAYAR AGHAVAN, JM ITA NO. 6550/MUM/09 ASSESSMENT YEAR 2004-05 INCOME TAX OFFICER 16(2), MATRU MANDIR, TARDEO ROAD, MUMBAI 26. VS. SU PRABHAT CO. OP. HSG. SOCIETY LTD., 76-B, BHULABHAI DESAI ROAD, MUMBAI. 26 PAN AAAAS 5937 P APPELLANT RESPONDENT APPELLANT BY SHRI MANOJ MISHRA RESPONDENT BY SHRI R.K. BOTHRA ORDER PER P.M. JAGTAP, A.M. THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A)- 27, MUMBAI DATED 27.10.09 AND THE GROUNDS RAISED BY THE REVENUE THEREIN READ AS UNDER: 1. THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF ` 16,13,000/- MADE ON ACCOUNT OF TRANSFER FEES FOLLOWING THE DECISION OF HONBLE HIGH COURT OF BOMBAY IN THE ASSESSEES OWN CASE WHEREIN IT HAS BEEN HELD TH AT ALL AMOUNTS RECEIVED BY THE CHS ON THE GROUNDS OF TRANSFER CHARGES ARE EXEMPT U NDER THE PRINCIPLE OF MUTUALITY. THE DECISION IS NOT ACCEPTED BY THE DEPARTMENT AND A SLP HAS BEEN PROPOSED AGAINST THE SAID ORDER. 2. THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF ` 1,29,126/- MADE ON ACCOUNT OF LEAVE AND LICENCE CHARGES BY RELYING UPO N THE DECISION OF HONBLE HIGH COURT OF BOMBAY IN THE ASSESSEES OWN CASE FOR A.Y. 2003-04 , WHERE IT HAS BEEN HELD THAT THE PRINCIPLE OF MUTUALITY IS APPLICABL E, WHEREAS, THE FACT IS THAT ALL THE PARTICIPANTS TO THE NON OCCUPANCY COMMON FUND ARE NOT CONTRIBUTORS TO THE NON- OCCUPANCY COMMON FUND WHICH THUS DEFIES THE PRINCI PLE OF MUTUALITY. 3. THE LD. CIT(A) ERRED IN DELETING THE INTEREST IN COME OF ` 45,865/- FROM BANKS OTHER THAN CO. OP. BANKS ON THE GROUNDS OF TH E DECISION OF HONBLE MEMBERS OF THE ITAT AND HONBLE BOMBAY HIGH COURT WHERE IT HAS BEEN HELD THAT INTEREST ON SURPLUS FUNDS OF SOCIETY DEPOSITED IN BANK WAS COV ERED BY THE PRINCIPLE OF MUTUALITY. 2 ITA 6550/M/09, SU PRABHAT CO.OP. HSG. SOCIETY LTD . 2. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDE S AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. AS AGREED BY THE LEARNED REPRE SENTATIVES OF BOTH THE SIDES, THE ISSUE INVOLVED IN GROUND NO. 1 OF THE REVENUES APPEAL IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF HONBLE BOMBAY HIGH COURT IN ASSESSEES OWN CASE FOR THE EARLIER YEAR RENDERED V IDE ITS JUDGMENT DTD. 1.10.09 IN INCOME TAX APPEAL NO. 1972 OF 2009 WHEREIN IT HAS BEEN HEL D THAT TRANSFER FEES RECEIVED BY THE ASSESSEE IS EXEMPT FROM TAX ON THE BASIS OF PRINCIP LE OF MUTUALITY. RESPECTFULLY FOLLOWING THE SAID JUDGMENT OF THE HONBLE JURISDIC TIONAL HIGH COURT IN ASSESSEES OWN CASE, WE UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A ) DELETING THE ADDITION OF ` 16,13,000/- MADE BY THE A.O. ON ACCOUNT OF TRANSFER FEES AND DISMISS GROUND NO. 1 REVENUES APPEAL. 3. AS REGARDS GROUND NO. 2, THE LD. REPRESENTAT IVES OF BOTH THE SIDES HAVE AGREED THAT THE ISSUE INVOLVED THEREIN IS SQUARELY COVERED BY T HE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2003-04 PASSED IN ITA NO. 6105/MU M/06 ON 15.10.08 WHEREIN IT WAS HELD THAT NON-OCCUPANCY CHARGES RECEIVED BY THE ASS ESSEE SOCIETY FROM ITS MEMBERS FOR GIVING THEIR TENEMENTS ON LEAVE AND LICENCE BASIS A RE EXEMPT FROM TAX ON THE BASIS OF PRINCIPLE OF MUTUALITY. RESPECTFULLY FOLLOWING THE SAID ORDER OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL, WE UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A) GIVING RELIEF TO THE ASSESSEE ON THIS ISSUE AND DISMISS GROUND NO. 2 OF THE REVENUES APPEAL. 4. AS REGARDS GROUND NO. 3, IT IS OBSERVED THA T THE ISSUE INVOLVED THEREIN IS ALSO SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE J UDGMENT OF HONBLE BOMBAY HIGH COURT DATED 1.10.09 (SUPRA) DELIVERED IN ASSESSEES OWN CASE WHEREIN IT HAS BEEN HELD THAT INTEREST INCOME RECEIVED BY THE ASSESSEE SOCIETY FR OM BANK IS EXEMPT FROM TAX ON THE BASIS OF PRINCIPLE OF MUTUALITY. RESPECTFULLY FOLL OWING THE SAID JUDGMENT OF THE HONBLE 3 ITA 6550/M/09, SU PRABHAT CO.OP. HSG. SOCIETY LTD . JURISDICTIONAL HIGH COURT, WE UPHOLD THE IMPUGNED O RDER OF THE LD. CIT(A) AND DISMISS GROUND NO. 3 OF THE REVENUES APPEAL. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED ON 26 TH NOVEMBER, 2010. SD/- SD/- (ASHA VIJAYARAGHAVAN) ( P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 26 TH NOVEMBER , 2010. RK COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -27 - MUMBAI 4. THE CIT- CITY XVI MUMBAI 5. THE DR BENCH, H 6. MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI 4 ITA 6550/M/09, SU PRABHAT CO.OP. HSG. SOCIETY LTD . DATE INITIALS 1. DRAFT DICTATED 26.10.10 SR.P.S./P.S. 2. DRAFT PLACED BEFORE AUTHOR 2.11.10 SR.P.S./P.S. 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER. - J.M./A.M. 4.DRAFT DISCUSSED/ APPROVED BY SECOND MEMBER. J.M./A.M. 5. APPROVED DRAFT COMES TO THE SR.P.S./P.S. SR.P.S./P.S. 6. KEPT FOR PRONOUNCEMENT ON SR.P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S. 8. DATE OF WHICH FILE GOES TO THE HEAD CLERK. 9. DATE OF DISPATCH OF ORDER.