ITO 16(2)(1), MUMBAI V. SIND WORK CO OP HSG SOCIETY LTD, MUMBAI

ITA 7255/MUM/2012

• Counselvise Citation: 725519914 RSA 2012
• Duration Of Justice: 1 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2004-2005
• Appeal Filed On: 06-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHOK SURI
• Assessee Lawyers: M SUBRAMANIAN
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI . . , , , BEFORE SHRI B.R. B ASKARAN , ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIAL MEMBER . / ITA NO. 7255 / MUM./ 2012 ( / ASSESSMENT YEAR : 20 04 05 ) INCOME TAX OFFICER WARD 16(2)(1), MATRU MANDIR TARDEO ROAD, MUMBAI 400 007 .. / APPELLANT V/S SIND WORK CO. OP. HSG. SOCIETY LTD. SKY SCR APER BUILDING 467, BHULABHAI DESAI ROAD MUMBAI 400 026 .... / RESPONDENT . / PERMANENT ACCOUNT NUMBER AAAAS7077A / REVENUE BY : MR. ASHOK SURI / ASSESSEE BY : MR. M. SUBRAMANIAN / DATE OF HEARING 1 3 . 0 2 .201 4 / DATE OF ORDER 14.02.2014 / ORDER , / PER AMIT SHUKLA , J.M. THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENUE CHALLENGING THE IMPUGNED ORDER DATED 18 TH SEPTEMBER 2012 , PASSED BY THE COMMISSIONER (APPEALS) XX VII , MUMBAI, FOR THE QUANTUM OF M/S. SOVEREIGN SECURITIES PVT. LTD. 2 ASSESSMENT PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ) FOR THE ASSESSMENT YEAR 20 04 05 , VIDE WHICH, FOLLOWING GROUNDS HAVE BEEN RAISED: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT THE VARIOUS RECEIPTS ON ACCOUNT OF REPAIR & MAINTENANCE FUND AND LEAVE AND LICENCE FEES AND SALE O F SCRAP ARE NOT COVERED BY THE PRINCIPLE OF MUTUALITY AND THEREFORE, TAXABLE. 2 . AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ISSUE RAISED BY THE REVENUE IS SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OW N CASE FOR THE ASSESSMENT YEAR 1999 2000. HOWEVER, WITH REGARD TO RECEIPTS ON SALE OF SCRAPS, HE CONCEDED THAT THE SAME MAY BE CONFIRMED AS IT IS NOT COVERED BY THE DECISION OF THE TRIBUNAL. 3 . THE LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT RAISE ANY OBJECT ION TO THE SUBMISSIONS MADE BY THE LEARNED COUNSE . 4 . THE ASSESSEE IS A CO OPERATIVE HOUSING SOCIETY WHICH HAS FILED ITS RETURN OF INCOME DECLARING NIL INCOME AFTER CLAIMING DEDUCTION UNDER SECTION 80P(2) OF THE ACT. THE ASSESSING OFFICER HAS MADE AN ADDIT ION ON ACCOUNT OF TRANSFER FEE RECEIVED OF ` 12.25 LAKHS, LEAVE AND LICENCE FEE OF ` 2,17,750 AND MISC. INCOME ON SALE OF SCRAP OF ` 17,100. THE LEARNED COMMISSIONER (APPEALS) HAS DELETED THE ADDITION ON THE GROUND THAT THE SAME IS COVERED BY THE PRINCIPLE OF MUTUALITY AS WAS HELD BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1999 2000 IN ITA NO.1748/MUM./2006 DATED 17 TH JUNE 2011. AS REGARDS MISC. INCOME ON SALE OF SCRAP ALSO, THE LEARNED C IT(A) ACCEPTED THE ASSESSEES CONTENTION THAT THE SAME IS INCIDENTAL TO THE ASSESSEES ACTIVITY WHICH IS USED FOR ITS BENEFIT OF ITS MEMBERS. M/S. SOVEREIGN SECURITIES PVT. LTD. 3 5 . AFTER CAREFULLY CONSIDERING THE RIVAL SUBMISSIONS AND ALSO THE RELEVANT FINDINGS GIVEN BY THE ASSESSING OFFICER AND THE LEARNED COMMISSIONER (APPEALS), WE FIND THA T THE ISSUE RAISED BY THE REVENUE TO THE EXTENT OF TRANSFER FEE AND HENCE LICENCE FEE HAS BEEN DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN THE ASSESSMENT YEAR 1999 2000 WHEREIN THE TRIBUNAL, AFTER FOLLOWING THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN MITTAL COURT PREMISES CO - OPERATIVE SOCIETY LTD. V/S ITO , [ 2010 ] 320 ITR 414 (BOM.) HAS HELD THAT THERE IS NO ELEMENT OF PROFIT IN SUCH RECEIPTS AND PRINCIPLE OF MUTUALITY IS APPLICABLE. INSOFAR AS RECEIPT FROM SALE OF SCRAP IS CONCERNED, THE SAME IS TREATED AS INCOME OF THE ASSESSEE TO BE TAXED AS PRINCIPLE OF MUTUALITY IS NOT APPLICABLE. THUS, RESPECTFULLY FOLLOWING THE EARLIER YEAR DECISION, WE DO NOT FIND ANY MERIT IN THE GROUND RAISED BY THE REVENUE WITH REGARD TO THE TAXABILITY OF RECEIPT S OF TRANSFER FEE AND LEAVE & LICENCE FEE AND THE SAME STAND DISMISSED, WHEREAS THE ADDITION ON RECEIPT FROM SALE OF SCRAP IS CONFIRMED. 6 . 6. IN THE RESULT, REVENUES APPEAL IS PARTLY ALLOWED. 14 TH FEBRUARY 2014 ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH FEBRUARY 2014 SD / - . . B.R. B ASKARAN ACCOUNTANT MEMBER SD / - AMIT SHUKLA JUDICIAL MEMBER MUMBAI, DATED : 14 TH FEBRUARY 2014 M/S. SOVEREIGN SECURITIES PVT. LTD. 4 / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSEE ; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE CIT(A ) ; ( 4 ) / THE CIT, MUMBAI CITY CONCERNED ; ( 5 ) , , / THE DR, ITAT, MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI