Appeal details
Counselvise Citation
[2015] 134 COUNSELVISE.COM (IT) 3148 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
10 month(s) 1 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
30-09-2015
Appeal Filed By
Department
Bench Allotted
SMC
Assessment Year
2010-2011
Appeal Filed On
28-11-2014
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER I.T.A. NO. 7144/M/2014 (AY:2010 - 2011 ) INCOME TAX OFFICER - 19(2)(5), MATRU MANDIR, MUMBAI - 400 007. / VS. M/S. PRITHVI APARTMENT COOP. HOUSING SOCIETY LTD, 21, ALTAMOUNT ROAD, MUMBAI - 400 026. ./ PAN : AAAAP2333A ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : MS. NEELIMA V. NADKARNI, DR / RESPONDENT BY : SHRI DHARMESH SHAH / DATE OF HEARING : 25.8 .2015 / DATE OF PRONOUNCEMENT : 30 .9 .2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 28.11.2014 IS AGAINST THE ORDER OF THE CIT (A) - 30, MUMBAI DATED 17.9.2014 FOR THE ASSESSMENT YEAR 2010 - 2011. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS. 9,66,716/ - HOLDING THAT IT IS COVERED UNDER THE PRINCIPLE OF MUTUALITY AND IGNORED THE FACT THAT THE SAID AMOUNT HAD RECEIVED AS N ON - OCCUPANCY CHARGES BY THE SOCIETY FROM MEMBERS AND NOT FROM THE OCCUPANTS? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) WAS JUSTIFIED IN DELETING THE ADDITION OF FD INTEREST OF RS. 3,87,126/ - HOLDING THAT IT IS COVERE D UNDER THE PRINCIPLE OF MUTUALITY AND NOT FOLLOWING THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF BANGALORE CLUB? 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME DECLARING THE TOTAL LOSS OF RS. 37,025 / - . THE CASE WAS SELECTED FOR SCRUTINY BY CASS AND THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT AND THE ASSESSED INCOME WAS DETERMINED AT RS. 13,16,820/ - WHICH INCLUDES THE DISALLOWANCES VIZ (I) RS. 9,66,716/ - ON ACCOUNT OF NON - OCCUPATION CHARGES AN D (II) RS. 3,87,126/ - WAS DISALLOWED ON ACCOUNT OF INTEREST ON FIXED DEPOSITS CLAIMED U/S 80P(2(D) OF THE ACT. AGGRIEVED WITH THE SAID ADDITIONS MADE BY THE AO, ASSESSEE IS IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 2 3. DURING THE PROCEEDINGS BEFORE T HE FIRST APPELLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE, CIT (A) DELETED THE ADDITIONS MADE BY THE AO AND PARTLY ALLOWED THE APPEAL. AGGRIEVED WITH THE SAID DECISION OF THE CIT (A), REVENUE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 4. GROUND NO.1 RELATES TO THE PRINCIPLE OF MUTUALITY TO THE NON - OCCUPANCY CHARGES RECEIVED BY THE COOPERATIVE HOUSING SOCIETY. SIMILAR ISSUE WAS ADJUDICATED BY THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE AY 2003 - 2004 VIDE ORDER OF THE TRIBUNAL IN ITA NO.5062/MUM/2006, DATED 16.12.2008, COPY OF WHICH IS PLACED ON RECORD. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE SAID ORDER OF THE TRIBUNAL (SUPRA), I FIND VIDE PARAS 17 AND 18, THE ASSESSEE WAS GIVEN RELI EF ON ACCOUNT OF NON - OCCUPANCY CHARGES OF RS.9,21,872/ - RECEIVED BY THE ASSESSEE IN THAT AY 2003 - 04. CONSIDERING THE COMMONALITY OF THE ISSUE AND BINDING NATURE OF THE COORDINATE BENCH DECISION, GROUND NO.1 RAISED BY THE REVENUE IS DISMISSED AND TO THAT E XTENT THE ORDER OF THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. 5. GROUND NO.2 RELATES TO THE APPLICATION OF THE PRINCIPLE OF MUTUALITY TO THE INTEREST AMOUNT OF RS. 3,87,126/ - RECEIVED FROM THE BANK ON THE FDS. IN THIS REGARD, CIT (A) GRANTED RELIEF TO THE ASSESSEE RELYING ON THE COORDINATE BENCH DECISION IN THE CASE OF BOMBAY GY MKHANA LTD VS. ITO, 115 TTJ 639 (MUMBAI) APART FROM OTHERS. AGGRIEVED WITH THE SAID RELIEF REVENUE IS IN APPEAL. 6. BEFORE THE TRIBUNAL , L D DR FOR THE REVENUE BROUGHT MY ATTENTION TO THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF HONBLE SUPRE ME COURT IN THE CASE OF BANGALORE CLUB VS COMMISSIONER OF INCOME - TAX (SC) 350 ITR 509 AND THE SAID RECEIPTS ARE OUTSIDE THE SCOPE OF PRINCIPLE OF MUTUALITY AND THEREFORE, THE DECISION TAKEN BY THE CIT (A) IS NOT CORRECT. 7. ON THE OTHER HAND, LD COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF THE CIT (A) AND REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. 8. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED JUDGMENT OF THE HONBLE SUPREME C OURT IN THE CASE OF BANGALORE CLUB (SUPRA). ON PERUSAL OF THE SAID JUDGMENT OF THE APEX COURT, I FIND 3 THAT THE SAID JUDGMENT IS RELEVANT IN THIS REGARD, WHEREIN IT WAS HELD THAT T HE PRINCIPLE OF MUTUALITY RELATES TO THE NOTION THAT A PERSON CANNOT MAKE A PROFIT FROM HIMSELF. THE CONCEPT OF MUTUALITY HAS BEEN EXTENDED TO DEFINED GROUPS OF PEOPLE WHO CONTRIBUTE TO A COMMON FUND , CONTROLLED BY THE GROUP, FOR A COMMON BENEFIT. ANY AMOU NT SURPLUS TO THAT NEEDED TO PURSUE THE COMMON PURPOSE IS SAID TO BE SIMPLY AN INCREASE OF THE COMMON FUND AND AS SUCH NEITHER CONSIDERED INCOME NOR TAXABL E. APPLYING THE ABOVE RATIO TO THE FACTUAL MATRIX OF THE PRESENT CASE, I AM OF THE OPINION THAT THE RE IS NO DISPUTE ON THE FACT OF RECEIVING INTEREST FROM THE BANK OF INDIA AND THE SAID BANK IS NOT A MEMBER OF THE CLUB , SO THAT THE PRINCIPLE OF MUTUALITY DOES NOT APPLY. THEREFORE, CONSIDERING THE SAME, THE DECISION TAKEN BY THE CIT (A) IN THIS R EGARD REQUIRES TO BE REVERSED. ACCORDINGLY I ORDER. THUS, GROUND NO.2 RAISED BY THE REVENUE IS ALLOWED. 9. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY ALLOWED. ORDER PRONOUNC ED IN THE OPEN COURT ON 3 0 T H SEPTEMBER, 2015. S D / - (D. KARUNAK ARA RAO) ACCOUNTANT MEMBER MUMBAI ; 3 0 . 9 .2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI
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