TAHNEE HEIGHTS COOPERATIVE HOUSING SOCIETY LTD, MUMBAI V. ASST CIT 16(2), MUMBAI

ITA 7136/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2782 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 28-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J SARAVANAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI E BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER. ITA. NO. 7136/MUM/2014 (ASSESSMENT YEAR:2010-11) TAHNEE HEIGHTS COOPERATIVE HOUSING SOCIETY LIMITED, D BUILDING, PETIT HALL, NEPEAN SEA ROAD, MUMBAI APPELLANT VS. ASSTT. COMMISSIONER OF INCOME TAX, 16(2), MUMBAI RESPONDENT PAN: AAAAT6303N /BY APPELLANT : SHRI ANUJ KISNADWALA, A.R. /BY RESPONDENT : SHRI J. SARAVANAN, D.R. /DATE OF HEARING : 28.06.2016 /DATE OF PRONOUNCEMENT : 30.06.2016 ORDER ITA NO.7136/MUM/14 A.Y. 10-11 [TAHNEE HEIGHTS COOPERATIVE HOUSING SOCIETY LTD. VS. ACIT] PAGE 2 PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-27, MUMBAI, DATED 01.04.2014 FOR A.Y. 2010-11 ON FOLLOWING GROUNDS: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )- 27, MUMBAI ERRED IN (A) CONFIRMING THE ADDITION OF RS.22,00,000 (INCORR ECTLY STATED AS RS.22,25,000 IN THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN RESPECT OF VOLUNTARY CONTRIBUTIONS RECEIVED FROM MEMBERS. (B) NOT GRANTING CREDIT FOR THE TAXES PAID BY YOUR APPELLANT AND CREDIT WHEREOF HAS BEEN CLAIMED IN TH E RETURN OF INCOME THE APPELLANT PRAYS THAT (A) THE ADDITION OF RS.22,00,000/- MADE IN RESPECT OF VOLUNTARY CONTRIBUTIONS RECEIVED FROM MEMBERS BE DELETED. (B) CREDIT BE GRANTED FOR THE TAXES PAID BY YOUR APPELLANT AND CREDIT WHEREOF HAS BEEN CLAIMED IN THE RETURN OF INCOME. 2. LD. AUTHORIZED REPRESENTATIVE POINTED OUT THAT S IMILAR ISSUE AROSE IN ASSESSEES OWN CASE FOR A.Y.2006-07 IN ITA NO.5275/MUM/2009 WHICH HAS BEEN DISCUSSED AND DECID ED IN FAVOUR OF ASSESSEE BY OBSERVING AS UNDER: 6. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES A ND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT THE SOLITARY ISSUE RAISED IN THE ASSE SSEE'S APPEAL RELATING TO TAXABILITY OF TRANSFER CHARGES I S SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE VARIOUS DE CISIONS OF THE TRIBUNAL AS WELL AS THAT OF THE HON'BLE BOMB AY ITA NO.7136/MUM/14 A.Y. 10-11 [TAHNEE HEIGHTS COOPERATIVE HOUSING SOCIETY LTD. VS. ACIT] PAGE 3 HIGH COURT. IN ONE OF SUCH CASES, NAMELY, SIND CO- OPERATIVE HOUSING SOCIETY VS. ITO 317 ITR 47, THE H ON'BLE BOMBAY HIGH COURT HAS DECIDED A SIMILAR ISSUE IN FA VOUR OF THE ASSESSEE AND THE RELEVANT OBSERVATIONS RECOR DED BY THEIR LORDSHIPS IN THIS CONTEXT ARE EXTRACTED BELOW : 'WHETHER THE FEE WAS VOLUNTARY OR NOT WOULD MAKE NO DIFFERENCE TO THE PRINCIPLE OF MUTUALITY. PAYMEN TS WERE MADE UNDER THE BYE-LAWS OF THE ASSESSEE WHICH CONSTITUTED A CONTRACT BETWEEN THE ASSESSEE AND ITS MEMBERS WHICH WAS VOLUNTARILY ENTERED INTO AND VOLUNTARILY CONDUCTED AS A MATTER OF CONVENIENCE AND DISCIPLINE FOR RUNNING OF THE ASSESSEE-SOCIETY. IF ANY AMOUNT WAS RECEIVED MORE THAN WAS CHARGEABLE UNDER THE BYE-LAWS OR THE GOVERNMENT NOTIFICATION, THE ASSESSEE WAS BOUND TO REPAY THE AMOUNT AND IF IT RETAINED THE AMOUNT IT WOULD BE IN THE NATURE OF PROFIT MAKING THAT SPECIFIC AMOUNT EXIGIBLE TO TAX. UNDER THE BYE-LAWS, CHARGING OF TRANSFER FEES HAD N O ELEMENT OF TRADING OR COMMERCIALITY. SINCE THERE WA S NO TAINT OF COMMERCIALITY THE QUESTION OF EARNING PROFITS WOULD NOT ARISE WHEN THE ASSESSEE FROM THE FUNDS RECEIVED APPLIED THE MONEYS RECEIVED TOWARDS THE MAINTENANCE OF THE SOCIETY AND PROVIDING THE MEMBERS WITH USUAL PRIVILEGES, ADVANTAGES AND CONVENIENCES. THUS, THE PRINCIPLE OF MUTUALITY WAS APPLICABLE TO THE ASSESSEE WHICH HAD AS ITS PREDOMINANT ACTIVITY, THE MAINTENANCE OF THE PROPERTY OF THE SOCIETY WHICH INCLUDED ITS BUILDING (S) AND AS LONG AS THERE WAS NO TAINT OF COMMERCIALITY, TRADE OR BUSINESS, THE RECEIPT OF TRANSFER FEES WAS NOT LIABLE TO TAX.' RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF TH E HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SIND CO-OP . HOUSING SOCIETY (SUPRA), WE DELETE THE ADDITION MAD E BY THE AO AND SUSTAINED BY THE LEARNED CIT(APPEALS) ON ACCOUNT OF TRANSFER FEES AND ALLOW THE APPEAL OF TH E ASSESSEE. NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE ON BE HALF OF REVENUE. FACTS BEING SIMILAR, SO FOLLOWING SAME RE ASONING, ITA NO.7136/MUM/14 A.Y. 10-11 [TAHNEE HEIGHTS COOPERATIVE HOUSING SOCIETY LTD. VS. ACIT] PAGE 4 WE DELETE THE ADDITION MADE ON ACCOUNT OF VOLUNTARY CONTRIBUTIONS RECEIVED FROM MEMBERS BY ASSESSING OF FICER AND SUSTAINED BY CIT(A) 3. AS A RESULT, APPEAL FILED BY ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON THIS THE 30 TH DAY OF JUNE, 2016. SD/- SD/- ( RAJESH KUMAR ) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R MUMBAI: DATED 30/06/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. %&%'( ) / CONCERNED CIT 4. )- / CIT (A) 5.-./00'(, '( , %& / DR, ITAT, MUMBAI 6./4567 / GUARD FILE. BY ORDER / , / % , '( , %&