The Uniworld Garden Apartment Owners Assocaition, Gurgaon V. ITO, Ward-4(4), Gurgaon

ITA 7246/DEL/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2414 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 05-12-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI AMIT SHUKLA , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 7246/DEL./2017 (ASSESSMENT YEAR: 2014 - 15 ) M/S. THE UNIWORLD GARDEN APARTMENT OWNERS ASSOCIATION, ESTATE OFFICE, SECTOR - 47, SOHNA ROAD, GURGAON, HARYANA - 122008 VS. ITO, WARD - 4(4), GURGAON (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJESH MAHNA, ADV REVENUE BY: SHRI N/K. BANSAL, SR. DR DATE OF HEARING 23/08 / 2018 DATE OF PRONOUNCEMENT 1 3 / 1 1 / 2018 O R D E R PER PRASHANT MAHARISHI , A. M. 1 . THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD CIT(A) - I, GURGAON DATED 23.08.2017 FOR THE ASSESSMENT YEAR 2014 - 15. 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1.) WHETHER A SUM OF RS.5,73,968/ - RECEIVED BY THE ASSESSEE AS INTEREST FROM DEPOSITS MADE BY THE ASSESSEEE IN BANK WHICH IS NOT A MEMBER IN THE ASSESSEE - SOCIETY AMOUNT TO ITS INCOME AND BE TAXED AS INCOME FROM OTHER SOURCES AS PER THE PROVISIONS OF THE INCOME TAX ACT, 1961? 2.) WHETHER THE PRINCIPLE OF MUTUALITY CAN BE MADE APPLICABLE TO FUND DEPOSITED IN THE BANK WHICH IS NOT A MEMBER OF THE ASSESSEE - SOCIETY, ESPECIALLY WHEN FUND IS RAISED FROM CONTRIBUTI ON OF SEVERAL MEMBERS EXCLUDING BANK AND THE INTEREST DERIVED FROM IT IS UTILIZED BY THE SEVERAL MEMBERS OF ASSESSEE - SOCIETY? 3.) WHETHER THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE ORDER OF A.O. THAT THE INTEREST OF RS.5,73,968/ - ON THE AMOUNT DEPOSITE D IN THE BANKS AND RS. 1,54,343/ - INCOME FROM ADVERTISEMENT ARE NOT COVERED BY THE PRINCIPLE OF MUTUALITY WHICH IS WITHOUT APPRECIATING THE CORRECT FACTS AND LAW OF THE INCOME TAX ACT, 1961? 4.) WHETHER THE LEARNED CIT(A) HAS FAILED TO APPRECIATE THE JUDG MENT OF THE HON BLE DELHI HIGH COURT IN THE CASE OF DIRECTOR OF INCOME TAX VS. ALL INDIA ORIENTAL BANK OF COMMERCE WELFARE SOCIETY, PAGE | 2 (2003) 130 TAXMAN 575, 577 (DELHI) APPLYING CHEMSFORD CLUB VS. CIT, (2000) 243 ITR 89(SC)? 5.) WHETHER THE LEARNED CIT(A) H AS FAILED TO APPRECIATE THAT THE MANDATE OF THE ASSESSEE WELFARE SOCIETY IS A QUESTION OF FACT AND WHICH CAN ONLY BE DETERMINED FROM THE MEMORANDUM OR ARTICLES OF ASSOCIATION, RULES OF MEMBERSHIP, RULES OF THE ORGANIZATION, ETC ? 6. ) WHETHER THE LEARNED C IT(A) AS WELL AS ID. A.O. HAS CONSTRUED THE MANDATE OF THE ASSESSEE WELFARE SOCIETY MYOPICALLY DEHORS THE FACTS AND INTENTIONS OF THE ASSESSEE - SOCIETY. 7. ) WHETHER THE ID. CIT(A) AS WELL AS ID. A.O. HAS MISCONSTRUED AND WRONGLY APPLIED THE RATIO OF THE APEX COURT JUDGMENT BANGLORE CLUB VS. CIT & ANR [2013] 350 ITR 509 (SC) IN THE FACTS AND CIRCUMSTANCES OF THE ASSESSEE - SOCIETY CASE? 3 . THE BRIEF FACTS OF THE CASE SHOWS THAT ASSESSEE IS A RESIDENT WELFARE SOCIETY SHOWING RECEIPTS FROM ITS RESIDENT AND EXP ENDITURE INCURRED FOR THE BENEFIT OF THE MEMBERS OF THE SOCIETY. THE ENTIRE RECEIPTS HAVE BEEN SHOWN AS INCOME FROM OTHER SOURCES AND EXPENDITURE IS BEEN DEBITED UNDER SECTION 57 OF THE INCOME TAX ACT 1961. THE ASSESSEE FURNISHED INCOME AND EXPENDITURE STA TEMENT ON CLAIM THAT THE INCOME IS EXEMPT ON THE CONCEPT OPPORTUNITY. THE ASSESSEE FILED ITS RETURN OF INCOME ON 30/9/2014 DECLARING NIL INCOME. 4 . DURING THE ASSESSMENT PROCEEDINGS THE LEARNED ASSESSING OFFICER NOTED THAT ASSESSEE HAS RECEIVED INTEREST UNFIX ED DEPOSIT RECEIPT OF RUPEES FOR 01000/ , INTEREST ON SAVINGS BANK ACCOUNT OF 1 72986/ AND ADVERTISEMENT INCOME OF 1 54343/ . THEREFORE ACCORDING TO THE LEARNED ASSESSING OFFICER TOTAL INCOME RECEIVED OF 728329/ IS NOT ELIGIBLE UNDER THE CONCEPT OF MUTUALITY AND NOT TAXABLE IN VIEW OF THE DECISION OF THE HONOURABLE SUPREME COURT IN CASE OF CIT VERSUS BANGALORE CLUB 350 ITR 509. THEREFORE THE ASSESSMENT ORDER UNDER SECTION 143 (3) OF THE INCOME TAX ACT 1961 WAS PASSED ON 24/10/2016 DETERMINING THE TO TAL INCOME OF THE ASSESSEE AT 7 20 8330/ . 5 . THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) 1 GURUGRAM, WOULD DISMISS THE APPEAL OF THE ASSESSEE. ASSESSEE AGGRIEVED WITH THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX APPEALS HAS PREFERRED APPEAL BEFORE US. 6 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. THE CLAIM OF THE ASSESSEE IS THAT THE ABOVE INCOME IS NOT PAGE | 3 CHARGEABLE TO TAX UNDER THE CONCEPT OF MUTUALITY. HOWEVER T HE ISSUE SQUARELY COVERED AGAINST THE ASSESSEE BY THE DECISION OF THE HONOURABLE SUPREME COURT IN BANGALORE CLUB VERSUS COMMISSIONER OF INCOME TAX 350 ITR 509 WHEREIN IT HAS BEEN HELD THAT INTEREST ON DEPOSITS NOT COVERED BY MUTUALITY PRINCIPAL AND LIABLE TO BE TAXED IN THE HANDS OF THE ASSESSEE CLUB. THEREFORE AS PER PRINCIPLES LAID DOWN BY THE HONOURABLE SUPREME COURT THE INCOME OF THE ASSESSEE OF INTEREST UNFIXED DEPOSIT AND SAVING BANK AND ADVERTISEMENT ARE NOT COVERED BY THE PRINCIPLES OF MUTUALITY AN D CORRECTLY TAXED BY THE LOWER AUTHORITIES. IN VIEW OF THE ABOVE DECISION OF THE HONOURABLE SUPREME COURT, WE FIND NO MERIT IN THE APPEAL OF THE ASSESSEE. 7 . IN VIEW OF THIS, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 3 / 1 1 / 2018 . S D / - S D / - ( AMIT SHUKLA ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 3 / 1 1 / 2018 A K KEOT COPY FORWARDED TO 1 . APPLICANT 2 . RESPONDENT 3 . CIT 4 . CIT (A) 5 . DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI PAGE | 4 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/ PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER