M/S. LANDS END CO-OP HSG SOCIETY LTD, MUMBAI V. THE ITO WD 16(1)(3), MUMBAI

ITA 6866/MUM/2007

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71283 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: K
• Next Hearing Date: 16-09-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 14-11-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AJEET KUMAR JAIN
• Keywords: Capital receipt

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL K KK K BENCH, BENCH, BENCH, BENCH, MUMBAI MUMBAI MUMBAI MUMBAI ! ! ! ! , ' ' ' ' #$ #$ #$ #$ % % % % & & & & , . BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI RAJENDRA SINGH RAJENDRA SINGH RAJENDRA SINGH RAJENDRA SINGH, AM , AM , AM , AM & && & SHRI SHRI SHRI SHRI VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM ./ I.T.A I.T.A I.T.A I.T.A. NO. 6866/MUM/2007 . NO. 6866/MUM/2007 . NO. 6866/MUM/2007 . NO. 6866/MUM/2007 ( '( '( '( '( ) ) ) ) / ASSESSMENT YEAR :2004-05) LANDS END CO-OP. HOUSING SOCIETY LTD., 29-D, DONGERSEY ROAD, MALABAR HILL, MUMBAI-400004 ( ( ( ( / VS. I.T.O WARD-16(1)(3), MATRU MANDIR, TARDEO ROAD, MUMBAI-400007 $* ' ./ + ./ PAN/GIR NO. :AAAAL0060C ( *, / APPELLANT APPELLANT APPELLANT APPELLANT) .. ( -.*, / RESPONDENT RESPONDENT RESPONDENT RESPONDENT) *, *, *, *, / / / / / APPELLANT BY : SHRI SATISH MODY -.*, -.*, -.*, -.*, 0 00 0 / / / / /RESPONDENT BY : SHRI AJEET KUMAR JAIN & NEERAJA PRADHAN ( ( ( ( 0 00 0 1' 1' 1' 1' / DATE OF HEARING : 16 TH SEPTEMBER 2013 23) 23) 23) 23) 0 00 01' 1' 1' 1' /DATE OF PRONOUNCEMENT: 27 TH SEPTEMBER 2013 #4 / O R D E R PER : & , . . / VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 31.8.2007 OF COMMISSIONER OF INCOME TAX(APPEALS) FO R THE ASSESSMENT YEAR 2004-05. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE IS AS UNDER: 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) ERRED IN CONFIRMING THE ADDITIONS BY A.O AND CONSEQUENTLY TR EATING ` 17,00,200/- RECEIVED TOWARDS COMMON AMENITIES FUND, SHARE PREMIUM AND ENTRANCE FEE AS TAXABLE INCOME. THE LEA RNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN NOT C ONSIDERING THE APPLICATION OF PRINCIPLES OF MUTUALITY AS ENVIS AGED IN THE MAHARASHTRA CO-OPERATIVE SOCIETIES ACT, 1960 BY CON SIDERING THE AMOUNT RECEIVED TOWARDS COMMON AMENITIES FUND, SHAR E PREMIUM AND ENTRANCE FEES FROM MEMBERS AS TAXABLE I NCOME OF THE SOCIETY. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ITA NO.6866/M/2007 LANDS END CO-OP. HOUSING SOCIETY LT. 2 ERRED IN NOT CONSIDERING RECEIPTS ON ACCOUNTS OF CO MMON AMENITIES FUND, SHARE PREMIUM AND ENTRANCE FEES AS CAPITAL RECEIPT. 3. WE HAVE HEARD THE LD. AR AS WELL AS LD. DR AND C ONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LD. AR HAS POINTED OUT THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED AND DECIDED BY THIS TRIBU NAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2003-04 VIDE ORDER DAT ED 10.1.2011 IN ITA NO. 6066/M/2006. THUS, THE LD. AR HAS SUBMITTED THA T THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. THE LD. DR HAS R ELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. THE AO MADE THE ADDITION WITH RESPECT TO THE AMOUNT RECEIVED BY THE ASSESSEE TOWARDS TRANSFER FE E OF ` 500/- FROM OUTGOING MEMBERS, ENTRANCE FEE FOR ` 100/- FROM INC OMING MEMBERS, SHARE PREMIUM AND CONTRIBUTION TO COMMON AMENITIES FUND. THE CIT(A) DELETED THE TRANSFER FEE OF ` 500/- EACH ON THE PRI NCIPLES OF MUTUALITY BUT CONFIRM THE ADDITION TOWARDS THE RECEIPT OF ENTRANC E FEE OF ` 100/- EACH AND THE RECEIPTS OF CONTRIBUTION TO COMMON AMENITIE S FUND TOTAL AMOUNTING TO ` 17,01,200/-. THIS TRIBUNAL IN ASSESS EES OWN CASE FOR THE ASSESSMENT YEAR 2003-04 HAS CONSIDERED AND ADJUDICA TED THE ISSUE OF CONTRIBUTION TO COMMON AMENITIES IN PARA 4 AS UNDER : 4. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE RECORD. CASE OF THE ASSESSEE IS THAT TH OUGH THE AMOUNT WAS RECEIVED IN THE FORM OF CONTRIBUTION TO COMMON AMENITIES FUND IT IS ESSENTIALLY UTILIZED FOR THE B ENEFIT OF COMMON MEMBERS AND THUS PRINCIPLES OF MUTUALITY ARE ATTRAC TED. FACTS NOT BEING IN DISPUTE, IN THE LIGHT OF THE DECISION OF ITAT (SUPRA), WE ACCEPT THE PLEA OF THE ASSESSEE AND HOLD THAT TH E IMPUGNED AMOUNT RECEIVED IN THE FORM OF CONTRIBUTION TO COMM ON AMENITIES FUND IS EXEMPT FROM TAX SINCE PRINCIPLES OF MUTUALITY APPLIED TO THE INSTANT RECEIPTS. UNDER THE CIRCUMST ANCES, APPEAL ITA NO.6866/M/2007 LANDS END CO-OP. HOUSING SOCIETY LT. 3 FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED ACCORD INGLY IN THE OPEN COURT ON THE DATE OF HEARING I.E. ON 10.1.2011 . 4. IN VIEW OF THE EARLIER ORDER OF THIS TRIBUNAL TH E AMOUNT OF ` 16,50,000/- TOWARDS COMMON AMENITIES FUND IS NOT TA XABLE ON THE PRINCIPLE OF MUTUALITY AS DECIDED BY THIS TRIBUNAL IS THE ASSESSEES OWN CASE. AS REGARDS THE RECEIPT TOWARDS SHARE PREMIUM AND ENTRANCE FEE FROM INCOMING MEMBERS IF THE SAID AMOUNT IS RECEIVE D FOR THE PURPOSE OF UTILISING FOR THE COMMON AMENITIES OF THE SOCIETY T HEN THE SAME FALLS UNDER THE CATEGORY OF THE CONTRIBUTION OF COMMON AM ENITIES FUND AND THE CONCEPT OF MUTUALITY WILL BE APPLICABLE. ACCORDINGL Y, THE AO TO VERIFY THE SAME AND THEN DECIDE AS PER OUR OBSERVATION. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF SEPTEMBER 2013 SD/- SD/- ( ! ) ' #$ ( RAJENDRA SINGH RAJENDRA SINGH RAJENDRA SINGH RAJENDRA SINGH ) ACCOUNTANT MEMBER ( & ) ' #$ (VIJAY PAL RAO) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 27 TH SEPTEMBER 2013 SUBODH COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI