COLABA SANGITA CO. OP HSG SOC. LTD, MUMBAI V. ITO 12(2)(3), MUMBAI

ITA 6571/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92476 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 04-02-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 30-10-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PREMANAND J
• Assessee Lawyers: NIRAJ PUNMIYA

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI . . , . , BEFORE SHRI I.P. BANSAL, JM AND RAJENDRA, AM ./ I.T.A. NO.6571/MUM/2012 ( / ASSESSMENT YEAR : 2007-08 COLABA SANGITA CO - OP. HSG. SOC. LTD., SANGITA, 27/28, ARTHUR BUNDER ROAD, COLABA, MUMBAI 400 005 / VS. THE ITO 12(2)(3), MUMBAI. ./ ./ PAN/GIR NO. : AAAAC 1325P ( / APPELLANT ) .. ( / RESPONDENT ) A PPELLANT BY S/ SHRI VIMAL PUNMIYA & NIRAJ PUNMIYA RESPONDENT BY SHRI PREMANAND J. ' #$ / DATE OF HEARING : 11/05/2015 ' #$ / DATE OF PRONOUNCEMENT : 11/05/2015 / O R D E R PER I.P.BANSAL, J.M: THIS IS AN APPEAL FILED BY THE ASSESSEE AND IT I S DIRECTED AGAINST ORDER PASSED BY LD. CIT(A)-10 MUMBAI DATED 31/8/2012 FOR ASSESSMENT YEAR 2007-08. GROUNDS OF APPEAL READ AS UNDER: 1. THE LD. COMMISSIONER OF INCOME TAX HAS ERRED BY TREATING VOLUNTARY CONTRIBUTION AS TRANSFER FEES. 2. THE LD. COMMISSIONER OF INCOME TAX HAS ERRED IN ADDING THE VOLUNTARY PAYMENT OF RS.415000/- TO THE TOTAL INCOME OF THE A SSESSEE. 3. THE LD. COMMISSIONER OF INCOME TAX ERRED IN INVO KING THE PROVISIONS OF SECTION 271(1)(C) OF INCOME TAX ACT, 1961. 4. THE LD. COMMISSIONER OF INCOME TAX HAS ERRED IN CHARGING INTEREST U/S.234B AND 234C OF THE INCOME TAX ACT, 1961. ./ I.T.A. NO.6571/MUM/2012 ( / ASSESSMENT YEAR : 2007-08 2 2. THE ASSESSEE IS A CO-OPERATIVE HOUSING SOCIETY AND IS ENGAGED IN PROVIDING SERVICES TO ITS MEMBERS. THE ASSESSEE RE CEIVED VOLUNTARY CONTRIBUTION OF RS.5,40,000/- FROM THE FOLLOWING ME MBERS. S.NO. NAME AMOUNT (I) ASHA MIRCHANDANI RS. 120000/- (II) SAHIL R. KHAIANI RS. 150000/- (III) D J BAJINA RS. 150000/- (IV) HOSHANG S. KOHNA RS. 115000/- (V) NIMESH SUCHDE RS. 40000/- RS. 540000/- 2.1 ACCORDING TO AO AS PER BYE-LAWS AND GOVERNMENT REGULATIONS ASSESSEE CAN CLAIM MAXIMUM RS.25,000/-, WHICH IS SE PARATELY CLAIMED, THEREFORE, FURTHER AMOUNT OF RS.5,40,000/- WOULD NO T BE GOVERNED BY PRINCIPLE OF MUTUALITY. ACCORDINGLY, THE SAID AMOU NT WAS ADDED TO THE INCOME OF THE ASSESSEE. LD. CIT(A) UPHELD THE DISA LLOWANCE ON THE GROUND THAT AMOUNT IN EXCESS OF RS.25,000/- FROM EACH MEM BER WOULD NOT BE GOVERNED BY THE PRINCIPLE OF MUTUALITY AS THE ASSE SSEE IS INDULGED IN PROFIT MOTIVE ACTIVITIES. LD. CIT(A) OBSERVED THAT THE D ECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF MITTAL COURT PREMISES CO- OPERATIVE SOCIETY, 320 ITR 414(BOM) WOULD NOT BE APPLICABLE AS IN THE SAID CASE THE ISSUE REGARDING LIMIT OF RS.25,000/- WAS NOT CONSIDERED. LD. CIT(A)ALSO OBSERVED THAT EARLIER DECISION OF ITAT, WHERE SIMILAR ISSUE WAS INVOLVED IN RESPECT OF ASSESSMENT YEAR 2004-05 IS ALSO NOT APPLICABLE DUE TO THE STATUTORY LIMIT OF RS.25,000/-. IT IS IN THIS MANNER LD. CIT(A) HAS UPHELD THE DISALLOWANCE. 3. AT THE TIME OF HEARING, IT WAS SUBMITTED BY LD. AR THAT IN A.Y 2004-05 TRIBUNAL HAS DELETED SIMILAR DISALLOWANCE AND THE S AID DECISION HAS NOT BEEN FOLLOWED BY LD. CIT(A). IT WAS SUBMITTED THA T THIS ISSUE IS COVERED DIRECTLY BY TWO DECISIONS OF HONBLE BOMBAY HIGH CO URT VIZ .DECISION IN THE CASE OF MITTAL COURT PREMISES CO-OPERATIVE SOCIETY (SUPRA) AND DECISION IN THE CASE OF SIND CO-OPERATIVE HOUSING SOCIETY, 317 ITR 47(BOM). IT WAS SUBMITTED THAT FOLLOWING THESE DECISIONS, MUMBAI TR IBUNAL IN THE CASE OF ITO VS. CCI CHAMBERS CO-OP. HOUSING SOCIETY LTD. VI DE ORDER DATED ./ I.T.A. NO.6571/MUM/2012 ( / ASSESSMENT YEAR : 2007-08 3 29/08/2012 IN ITA NO.6509/MUM/2011 HAS DELETED THE ADDITION OF RS.46.00 LACS, COPY OF THE SAID DECISION WAS FILED AND WAS ALSO GIVEN TO LD. DR. 4. REFERENCE WAS ALSO MADE TO THE DECISION OF HONB LE BOMBAY HIGH COURT IN THE CASE OF CIT VS. DARBHANGA CHS LTD., OR DER DATED 18/12/2014 IN I.T APPEAL NO.1474 OF 2012, COPY OF THIS DECISIO N WAS ALSO PLACED ON RECORD AND WAS GIVEN TO LD. DR. IN THE SAID DECISI ON, IT WAS OBSERVED THAT AO DID NOT FOLLOW THE BINDING DECISION OF HONBLE B OMBAY HIGH COURT IN THE CASE OF SIND CO-OP. HOUSING SOCIETY VS. ITO (SUPRA) ON THE GROUND THAT THE CONTRIBUTION EXCEEDED OF RS.25,000/-PER MEMBER AND THEIR LORDSHIPS HAVE DISMISSED THE APPEAL FILED BY THE REVENUE BY HOLDIN G THAT EVEN CONSIDERATION RECEIVED IN EXCESS OF RS.25,000/- WOU LD BE COVERED BY PRINCIPLE OF MUTUALITY, IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT BY THE REVENUE TO BREAK THE PRINCIPLE OF MUTUALITY. THUS, IT WAS PLEADED BY LD. AR THAT LD. CIT(A) HAS COMMITTED AN ERROR IN UPHOLD ING THE DISALLOWANCE. 5. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. IN OUR OPINION THE ISSUE IS COVER ED BY AFOREMENTIONED DECISIONS OF HONBLE BOMBAY HIGH COURT IN THE CASE S OF MITTAL PREMISES CO- OPERATIVE SOCIETY AND SIND CO-OP. HOUSING SOCIET(SU PRA). EVEN THE ISSUE ON WHICH LD. CIT(A) HAS UPHELD THE ADDITION IS COVERED AGAINST REVENUE BY THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE O F CIT VS. DARBHANGA CO- OP. HOUSING SOCIETY(SUPRA), WHEREIN THEIR LORDSHIPS HAVE CONSIDERED THE SIMILAR ISSUE AND DECIDED AGAINST THE REVENUE. 6. IN VIEW OF ABOVE DISCUSSIONS, WE HOLD THAT THE A MOUNT RECEIVED BY THE ASSESSEE FROM ITS MEMBERS IS COVERED BY THE PRINCI PLE OF MUTUALITY AND LD. CIT(A) HAS COMMITTED AN ERROR IN UPHOLDING THE DISA LLOWANCE WHICH IS CONTRARY TO THE JUDICIAL DISCIPLINE. THE DISALLOWA NCE IS DELETED. 7. IN THE RESULT, GROUND NO.1 & 2 ARE ALLOWED. ./ I.T.A. NO.6571/MUM/2012 ( / ASSESSMENT YEAR : 2007-08 4 8. APROPOS GROUND NO.3, THE SAME IS PREMATURE AND I S DISMISSED. 9. APROPOS GROUND NO.4, THE LEVY OF INTEREST IS CON SEQUENTIAL. THE AO IS DIRECTED TO RE-COMPUTE THE INTEREST AFTER GIVING EF FECT TO ORDER IN RESPECT OF GROUND NO.1 & 2. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS CONSIDERED TO BE PARTLY ALLOWED IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 11/05/2015 ' * +, 11/05/2015 ' SD/- SD/- (RAJENDRA) . . (I.P.BANSAL) /ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; + DATED 11/05/2015 !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. /# ( ) / THE CIT(A)- 4. /# / CIT 5. 01 #23 , $ 23 , / DR, ITAT, MUMBAI 6. 4 / GUARD FILE. / BY ORDER, 0# # //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . . .VM , SR. PS