ITO 16(2)(1), MUMBAI V. PUSHPA MILAN CHS LTD, MUMBAI

ITA 750/MUM/2011

• Counselvise Citation: 75019914 RSA 2011
• Duration Of Justice: 2 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 05-08-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 27-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARESH JOHRI
• Assessee Lawyers: B V JHAVERI; FORUM MEHTA
• Keywords: Earning of tax free income

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - C BENCH. . . , , BEFORE S/SH. B.R. MITTAL, JUDICIAL MEMBER & RA JENDRA, ACCOUNTANT MEMBER ./ ITA NO.750/MUM/2011, ! ! ! ! ' ' ' ' / ASSESSMENT YEAR-2004-05 ITO 16(2)(1) MATRU MANDIR, MUMBAI. VS. PUSHPA MILAN CHS LTD. NEAR SOPHIA COLLEGE, WARDEN ROAD, MUMBAI- 400026 PAN: AAFFP7508R ( #$ / APPELLANT ) ( %&#$ / RESPONDENT ) #$ #$ #$ #$ ' ' ' ' / APPELLANT BY : SHRI PARESH JOHRI (DR) %&#$ ( ' / RESPONDENT BY : SHRI B.V. JHAVERI & MS. FORUM MEHTA ! ! ! ! ( (( ( )* )* )* )* / DATE OF HEARING : 05-08-2013 +,' ( )* / DATE OF PRONOUNCEMENT : 14-08-2013 ! ! ! ! , 1961 ( (( ( 254(1) )-) )-) )-) )-) . . . . ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, A.M. CHALLENGING THE ORDER DT.02-11-2010 OF THE CIT(A)-2 7,MUMBAI, ASSESSING OFFICER (AO) HAS FILED FOLLOWING GROUNDS OF APPEAL: THE LD. C.TT(A) ERRED IN DELETING THE ADDITION OF R S. 9,50,000/- MADE ON ACCOUNT OF TRANSFER FEES AND RS. 40,800/- MADE ON ACCOUNT OF NON-OCCUPANCY CHARG ES FOLLOWING THE DECISION OF HON BLE HIGH COURT OF BOMBAY IN THE CASE OF M/S. MITTAL COURT PR EMISES COOPERATIVE HOUSING SOCIETY LTD., M/S. SHYAM CO-OPERATIVE HOUSING SOCIETY LTD. AND SUPRABH AT CO-OPERATIVE HOUSING SOCIETY LTD., WHEREIN IT HAS BEEN HELD THAT ALL AMOUNTS RECEIVED BY THE C OOPERATIVE HOUSING SOCIETY LTD. ON THE GROUNDS OF TRANSFER CHARGES ARE EXEMPT UNDER THE PRINCIPLE OF MUTUALITY. THE DECISION HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND THE ISSUE IS SUB-JUDICE. 2.THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD GROUND/S WHICH MAY BE NECESSARY. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT (A) O N THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. ASSESSEE, A CO-OPERATIVE HOUSING SOCIETY,FILED ITS RETURN OF INCOME ON 24.08.2004 DECLARING TAXABLE INCOME AT RS. NIL. IN THE COMPUTATION OF TO TAL INCOME FILED ALONG WITH THE RETURN, ASSESSEE HAD SHOWN GROSS INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES AT RS. 13,64,212/- AGAINST WHICH ASSESSEE REDUCED AN AMOUNT TO RS. 8.4 LACS BE ING RECEIPTS FROM MEMBERS CONTRIBUTION, CAR PARKING, CABLE TV COLLECTION, ENTRANCE FEES, TRANSF ER OF SHARES ETC. BALANCE OF RS. 5.23 LACS WAS CLAIMED BY THE ASSESSEE AS EXEMPT INCOME U/S 80P OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, AO FOUND THAT TH E ASSESSEE HAD CREDITED THE AMOUNT OF RS. 9.5 LACS UNDER THE HEAD AMENITY FUND. HE CALLED F OR THE DETAILS AND FOUND THAT SAID AMOUNT WAS RECEIVED TOWARDS TRANSFER FEE FROM THE TRANSFEREE A ND THE TRANSFEROR OF THE FLATS OF THE SOCIETY. HE FURTHER FOUND THAT ASSESSEE HAD ALSO COLLECTED RS. 40,800/- AS NON-OCCUPANCY CHARGES FROM THE MEMBERS OF THE SOCIETY. AO WAS OF THE OPINION THAT BOTH THE RECEIPTS WERE NOT COVERED BY THE 2 ITA NO.750/MUM/2011,(AY-2004-05) PUSHPA MILAN CHS L TD. PRINCIPLES OF MUTUALITY. HE, THEREFORE, ADDED RS. 9 ,90,800 (RS.9.5 LACS +RS.40,800) TO THE TOTAL INCOME OF THE ASSESSEE. 2.1. ASSESEE PREFERRED AN APPEAL BEFORE THE FIRST APPELL ATE AUTHORITY(FAA).AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE ASSESSMENT ORDE R, HE HELD THAT NON-OCCUPANCY CHARGES/TRANSFER FEES RECEIVED BY THE ASSESSEE WERE COVERED BY THE P RINCIPLES OF MUTUALITY, THAT THE SAID ITEMS DID NOT FORM PART OF THE TAXABLE INCOME. HE RELIED UPON THE ORDER OF THE HONBLE HIGH COURT OF MUMBAI DELIVERED IN THE CASES OF M/S MITTAL COURT P REMISES CO-OPERATIVE SOCIETY LTD. (184 TAXMAN 292), M/S SUPRABHAT CHS LTD. (ITA NO. 172 OF 2009-AY 2003-04 & M/S SHAYAM CHS LTD. ITA NO. 92, 93 AND 206 OF 2008-AYS 1999-2000 T O 2001-02). FINALLY, HE DELETED THE ADDITION MADE BY THE AO 2.2. BEFORE US, DEPARTMENTAL REPRESENTATIVE (DR) RELIED UPON THE ORDER OF THE AO. AUTHORISED REPRESENTATIVE (AR) SUPPORTED THE ORDER OF THE FIRS T APPELLATE AUTHORITY (FAA).HE FURTHER RELIED UPON THE ORDER OF THE MUMBAI TRIBUNAL DELIVERED IN THE CASE OF MAHALAXMI COMMERCIAL PREMISES CHS LTD. (ITA 5187/MUM/2011-AY 2007-08/12.10.10), D AMODAR BHUVAN CHS LTD. (1610/MUM/2010-AY 2005-06-16.09.2011-D BENCH MUMB AI AND AVEREST CHAMBERS CO- OPERATIVE HOUSING SOCIETY LTD. (ITA NO. 6451/MUM/20 07-AY 2004-05/06.06.2013/ J BENCH, MUMBAI.) 2.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY VARIOUS JUDGME NTS RELIED UPON BY THE FAA AS WELL AS THE AR. RESPECTFULLY, FOLLOWING THE ORDERS OF THE JURISDICT IONAL HIGH COURT AND THE COORDINATING BENCHES OF TRIBUNAL, WE DECIDE GROUND NO.1 AGAINST THE AO. AS A RESULT,APPEAL FILED BY THE AO STANDS DISM ISSED / )0 / )0 / )0 / )0 !/) !/) !/) !/) * * * * 2 2 2 2 3 3 3 3 ( (( ( - -- - / / / / ( (( ( ) ) ) ) 45 4545 45 . ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH AUGUST,2013 . . ( +,' 6 7! 14 -) , 2013 , ( - 8 SD/- SD/- ( . 9 9 9 9 . . B.R.MITTAL ) ( / RAJENDRA ) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, 7! /DATE: 14 TH AUGUST,2013 SK . . . . ( (( ( %): %): %): %): ;:') ;:') ;:') ;:') / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / #$ 2. RESPONDENT / %&#$ 3. THE CONCERNED CIT (A) / < = , 4. THE CONCERNED CIT / < = 5. DR C BENCH, ITAT, MUMBAI / :>- %)! , . . . 6. GUARD FILE/ - ? &:) &:) &:) &:) %) %)%) %) //TRUE COPY// 3 ITA NO.750/MUM/2011,(AY-2004-05) PUSHPA MILAN CHS L TD. .! / BY ORDER, @ / 4 DY./ASST. REGISTRAR , /ITAT, MUMBAI