ITO 19(3)(3), MUMBAI V. SEA FACE PARK CO OPERATIVE HOUSING SOCIETY LTD, MUMBAI

ITA 7146/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9018 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 28-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BEENA SANTOSH
• Assessee Lawyers: R MURLIDHAR
• Keywords: Question of law

Judgement Text

, , , , INCOME-TAX APPELLATE TRIBUNAL EBENCH M UMBAI , , BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & PAWAN SINGH, JUDICIAL MEMBER ./I.T.A./7146/MUM/2014 , /ASSESSMENT YEAR: 2011-12 INCOME TAX OFFICER-19(3)(3) ROOM NO.202, 2 ND FLOOR, MATRU MANDIR, TARDEO RD. MUMBAI-400 007. VS. M/S. SEA FACE PARK CO-OP HSG. SOCIETY LTD., 50, BHULABHAI DESAI ROAD MUMBAI-400 026. PAN:AAAAS 3577 R ( /APPELLANT ) ( / RESPONDENT ) REVENUE BY: MS. BEENA SANTOSH -DR ASSESSEE BY: SHRI R. MURLIDHAR / DATE OF HEARING: 10.01.2017 / DATE OF PRONOUNCEMENT: 10.01.2017 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DATED 25/09/2014, OF THE CIT( A)-27, MUMBAI THE ASSESSING OFFICER (AO) HAS FILED THE PRESENT APPEAL.ASSESSEE IS A COO PERATIVE HOUSING SOCIETY (CHS). IT FILED ITS RETURN OF INCOME ON 29/09/2011,DECLARING NIL IN COME.THE AO COMPLETED THE ASSESSMENT, U/S.143 (3) OF THE ACT, ON 08/10/2013, DETERMINING ITS INCOME AT RS. 1.16 CRORES. 2. THE FIRST GROUND OF APPEAL DEALS WITH DELETING THE ADDITION OF RS. 99.50 LAKHS UNDER THE HEAD PREMIUM COLLECTED FROM OUTGOING MEMBERS ON TRA NSFER OF FLAT TO THE SOCIETY BUILDING REPAIR FUND. THE SECOND GROUND OF APPEAL IS ABOUT D ELETING THE ADDITION OF RS. 13.55 LAKHS RECEIVED BY THE ASSESSEE UNDER THE HEAD NON-OCCUPAN CY CHARGES FROM THE MEMBERS. 3. DURING THE COURSE OF HEARING BEFORE US,THE REPRESEN TATIVES OF BOTH THE SIDES AGREED THAT IDENTICAL ISSUES HAD ARISEN IN THE EARLIER YEAR IN ASSESSEES OWN CASE AND THAT THE TRIBUNAL HAD DECIDED THE ISSUE WHILE ADJUDICATING THE APPEAL FOR THE AY.2009-10 (ITA/5886/MUM/2013, DATED 21/08/2015). WE FIND THAT BOTH THE ISSUES, RA ISED BY THE AO, HAVE BEEN DELIBERATED UPON AND HAVE BEEN DECIDED BY THE TRIBUNAL IN ITS O RDER DATED 21/08/2015. WE WOULD LIKE TO REPRODUCE THE RELEVANT PORTION OF THE SAID ORDER AN D IT READS AS UNDER: 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN ALLOWING THE EXEMPTION TO TAX THE COMMON A MENITIES FUNDS AND NON-OCCUPANCY CHARGES RECEIVES BY ASSESSEE CO-OP. HOUSING SOCIETY UNDER T HE PRINCIPLE OF MUTUALITY WITHOUT APPRECIATING THE FACT THAT THE RELIANCE PLACED ON DECISION OF HI GH COURT OF BOMBAY IN CASE OF M/S.MITTAL COURT 7146/M/14-M/S. SEA FACE 2 PREMISES CO-OP,HSG.SOCIETY LTD. VS. ITO (320 ITR 41 4) HAS NOT BEEN ACCEPTED BY REVENUE AND SLP HAS BEEN FILED BEFORE HONBLE SUPREME COURT OF INDIA AGAINST THE SAME. 2. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY ROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY? 3. AT THE TIME OF HEARING, NOBODY APPEARED ON BEHAL F OF THE ASSESSEE-RESPONDENT DESPITE NOTICE BY RPAD. HOWEVER, SINCE AN IDENTICAL ISSUE H AS BEEN CONSIDERED BY US IN ANOTHER APPEAL BEARING ITA NO.5888/MUM/2013 IN THE CASE OF M/S.SHYAM CHS LTD. WE PROPOSE TO DISPOSE OF THIS APPEAL OF THE REVENUE EX-PARTE. 4. WE HAVE HEARD THE LEARNED DR AND ALSO CONSIDERE D THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT AN IDENTICAL ISSUE HAS BEEN CO NSIDERED BY US IN THE CASE OF M/S.SHYAM CHS LTD. IN ITA NO.5888/MUM/2013. THE RELEVANT PART OF THE EVEN DATED ORDER IS AS UNDER: 6. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND CARE FUL PERUSAL OF THE RECORD, AT THE OUTSET WE NOTE THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED AND DEC IDED BY THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2007-08 AS WELL AS FOR ASSESSMENT Y EAR 2008-09. FOR THE EARLIER ASSESSMENT YEAR I.E. 1999-2000 TO 2001-02, THE MATTER WAS CARRIED TO THE HON'BLE JURISDICTIONAL HIGH COURT AND THE HON'BLE JURISDICTIONAL HIGH COURT VIDE ORDER DATED 17/7/2009 IN ITA NOS.92, 93 & 206 OF 2003 HAS DECIDED THE QUESTION AS UNDER: WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE ANY PART OF TRANSFER FEES RECEIVED BY THE ASSESSEE SOCIETIES WHETHER FROM O UTGOING OR INCOMING MEMBERS IS NOT LIABLE TO TAX ON THE GROUND OF MUTUALITY? THUS, IT IS CLEAR THAT THE ISSUE OF TRANSFER FEE RE CEIVED FROM OUTGOING OR INCOMING PERSONS WAS CONSIDERED AND DECIDED IN FAVOUR OF THE ASSESSEE BY HOLDING THAT THE PRINCIPLE OF MUTUALITY IS APPLICABLE ON SUCH RECEIPT/CONTRIBUTION BY THE OUTG OING AND INCOMING PERSONS AND ACCORDINGLY THE SAME IS NOT TAXABLE. FOR THE ASSESS MENT YEAR 2003-04 AGAIN, THIS ISSUE WAS CONSIDERED BY THE HON'BLE JURISDICTIONAL HIGH COURT IN INCOME-TAX APPEAL NO.85 OF 2013 WHEREIN THE QUESTION OF LAW IN REVENUES APPEAL WAS SAME AND DECIDED AS UNDER: WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE TRIBUNAL, WAS JUSTIFIED IN UPHOLDING THE CIT(A)S ORDER AND DISMI SSING THE REVENUES APPEAL AND ACCEPTING THE ASSESSEES PLEA THAT THE CONTRIBUTION OF RS.42 LAKHS PAID TOWARDS THE TRANSFER FEES AND PRINCIPLERS.23,250/- BEING NON OCCUPANCY CHARGES AR E COVERED BY THE PRINCIPLE OF MUTUALITY AND IS NOT CHARGEABLE TO TAX? . 7. WE FIND THAT SO FAR AS NON OCCUPANCY CHARGES ARE CONCERNED THE SAME HAS NOT BEEN ADMITTED BY THIS COURT IN M/S PANCHRATNA CO HOUSING SOCIETY LTD. (SUPRA). NO ORDER HAS BEEN SHOWN TO THE ISSUE ON NON-OCCUPANCY CHARGES. HOWEVE R THERE ARE TWO APPEALS ADMITTED ON THE ISSUE OF TRANSFER FEES ON 14TH JUNE 2012 AND 18 TH FEBRUARY 2013 AS RELIED BY THE REVENUE. THE VERY GRIEVANCE RAISED BY THE R E V E N U E I N T H I S A P P E A L I N R E S P E C T O F W A S R A I S E D B Y T H E REVENUE IN RESPECT O F TR ANS FER FEES WAS RAISED BY THE REVENUE BE FORE THIS COURT IN DARBHANGA MANSION CO-OP . HOUSING SOC IE TY LTD. (SUPRA). THIS COURT BY ORDER DATED 18TH DECEMBER 2013 DID NOT ACCEPT AN IDENTICA L GRIEVANCE BY OBSERVING THUS: 'WHILE IT MAY BE TRUE THAT IT IS OCCASIONED BY TRA NSFER OF A FLAT AND GARAGE , YE T , WE DO NOT SEE HOW MERELY BECAUSE THERE WAS CAP OR RE S T RI C TION PLA CED ON THE T RAN S F E R F E E S OR THE QUANTUM THEREOF, IN THIS CASE THE PRINC IPLE OF MUTUALITY CANNOT BE APPLIED. THE UNDERLYING PRINCIPLE AND OF A CO-OPERATIVE MOVEMENT HAS BEEN COMPLETELY OVERLOOKED BY THE COUNSEL FOR THE REVENUE. THE REVENUE SEEMS TO B E OF THE VIEW THAT A C O - O P E R A T I 7146/M/14-M/S. SEA FACE 3 V E H O U S I N G S O C I E T Y M A K E S P R O F I T , I F I T R E C E I V E S S O M E T H I N G B E Y O N D T H I S A M O U N T O F RS.25,000/-. THERE HAS TO B E MATERIAL BROUGHT AND WHICH WILL HAVE A DEFINITE BEARING ON THIS ISSUE. IF THE AMOUNT IS RE CEIVED ON ACCOUNT OF TRANSFER OF A FLAT AND WHICH IS NOT RESTRICTED TO RS.25,000/- BUT MUCH MORE, THEN DIFFERENT C O N S I D E R A T I O N M A Y A P P L Y . H O W E V E R , I N T H E P R E S E N T C A S E , WHAT HAS BEEN ARGUED AND VEHEMENTLY IS THE AMOUNT WAS RECEIVED BY THE SOCIET Y WHEN THE FLAT AND THE GARAGE WERE TRANSFERRED. THEREFORE, IT MUST BE PRESUMED TO BE N OTHING BUT TRANSFER FEES. IT MAY HAVE BEEN CREDITED TO THE FUND AND WITH A VIEW TO D EM O N S T R A TE THAT IT IS NOTHING BUT A VOLUNTARILY CONTRIBUTION OR DONATION TO THE SOCIETY , BUT STILL IT CONSTITUTES ITS INCOME. HOWEVER, FOR RENDERING SUCH A CONCLUSIVE FINDING TH ERE HAS TO BE MATERIAL BROUGHT BY THE REVENUE ON RECORD. BEYOND URGING THAT IT HAS BEEN R ECEIVED AT THE TIME OF A TRANSFER OF THE FLAT AND CREDITED TO SUCH FUND WILL NOT BE ENOU GH TO DISPLACE THE PRINCIPLE LAID DOWN IN THE DECISION OF SIND CO-OPERATIVE HOUSING SOCIETY. THE ATTEMPT OF THE REVENUE THEREFORE IS NOTHING BUT OVERCOMING THE BINDING JUDGMENT OF T HIS COURT. IN THE PRESENT CASE, THE COMMISSIONER AND THE TRIBUNAL BOTH HAVE HELD THAT T HE RECEIPT MAY HAVE BEEN OCCASIONED BY THE TRANSFER BUT THE PRINCIPLE OF MUT UALITY WILL STILL APPLY IN THE PRESENT CASE, THERE FORE, THE TRIBUNAL FOLLOWING IT S EARLIER VIEWS AND APPLYING THE RATIO O F THIS JUDGMENT, DI SMISSED THE R E VENUE' S APPEAL A ND CONFIRMED THE COMMISSIONER'S FINDING. THE CONCURRENT FINDINGS, THEREFORE, IN THI S CASE ARE IN CONSONANCE WITH THE FACTUAL MATERIALS BROUGHT ON RECORD. THERE IS SUBSTANCE IN THE ARGUMENT OF MR.IRANI THAT THE ASSESSING OFFICER BE FORE HIM THE MATERIAL IN THE F ORM OF THE BYE-LAWS O F THE S O C I E T Y . T H E BYE-LAWS ALSO ARE IN CONSONANCE WITH THE GOVE RNMENT RESOLUTION AND STIPULATE A SUM OF RS.25,000/- TOWARDS TRANSFER FEES. THE ASSES SEE IN THIS CASE IS PRESUMED TO HAVE RECEIVED NOTHING BUT TRANSFER FEES AND IT IS THAT U NDERLYING PRESUMPTION WHICH HAS PREVAILED UPON THE ASSESSING OFFICER TO TAKE A PART ICULAR VIEW. 12. WE FIND THAT THE ASSESSING OFFICER HAS BEEN THE REFORE, RIGHTLY CORRECTED BY THE COMMISSIONER. WITHOUT ANY MATERIAL, COGENT AND SATI SFACTORY, BEING PRODUCED, THE SUM AND IN ITS ENTIRETY AS CREDITED COULD NOT BE ASSUME D TO BE T R AN S F E R F E E S . THE RECEIPT THEREOF MAY HAVE BE EN OCCASIONED BY THE TRANSFER O F THE FLAT AND GARAGE.' 8. IN THIS CASE ALSO, NOTHING HAS BEEN BROUGHT ON R ECORD TO INDICATE THAT THE RESPONDENT HAD RECEIVED MORE AMOUNTS THAN ALLOWED/PERMITTED IN THE STATE GOVERNMENT CIRCULAR DATED 9TH AUGUST 2001. FURTHER IN THE RESPONDENT-AS SESSEES OWN CASE, THIS COURT HAS DECIDED THE ISSUE IN ITS FAVOUR AND IN THE ABSENCE OF ANY DISTINGUISHING FEATURE, THE TRIBUNAL WAS OBLIGED TO FOLLOW THE SAME. THIS IS PR ECISELY WHAT THE IMPUGNED ORDER HAS DONE. THUS, AS THE ISSUE IS COVERED IN FAVOUR OF TH E RESPONDENT-ASSESSEE BY ORDER OF THIS COURT DATED 17TH JULY 2009(INCOME TAX APPEAL NO .92 ,93 AND 208/2008) NO SUBSTANTIA1 QUESTION O F LAW ARISES IN THIS CASE . THUS IT IS CLEAR THAT THE ISSUE RAISED BY THE REVEN UE IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE ASSESSEES OWN CASE. THOUGH THE REVENUE HAS CONTENDED THAT IT HAS NOT ACCEPTED THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT AND FILED A SLP BEFORE THE HON'BLE SUPRE ME COURT, HOWEVER, IN THE ABSENCE OF ANY STAY OR REVISION OF THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT, IT IS A BINDING PRECEDENT FOR THIS TRIBUNAL. RESPECTFULLY FOLLOWING THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE CIT(A). IN VIEW OF THE ABOVE, WE DO NOT FIND ANY ERROR OR I LLEGALITY IN THE ORDER OF THE CIT(A) AND IS THEREFORE UPHELD. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. 7146/M/14-M/S. SEA FACE 4 RESPECTFULLY FOLLOWING THE ABOVE ORDER OF THE TRIBU NAL FOR THE AY. 2009-10, WE DECIDE BOTH THE GROUNDS AGAINST THE AO AND CONFIRMED THE ORDER OF THE FIRST APPELLATE AUTHORITY (FAA). AS A RESULT, APPEAL FILED BY THE AO STANDS DISMISSE D. . ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JANUARY, 2017. 10 , 2017 SD/- SD/- ( ( ( ( /PAWAN SINGH) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 10.01.2017. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR G BENCH, ITAT, MUMBAI / , , . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.