ITO 16(2)(1), MUMBAI v. MATRU ASHISH CHS LTD, MUMBAI

ITA 2843/MUM/2010 | 2005-2006
Pronouncement Date: 11-03-2011 | Result: Dismissed

Appeal Details

RSA Number 284319914 RSA 2010
Assessee PAN AAAAM2348A
Bench Mumbai
Appeal Number ITA 2843/MUM/2010
Duration Of Justice 11 month(s) 1 day(s)
Appellant ITO 16(2)(1), MUMBAI
Respondent MATRU ASHISH CHS LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 11-03-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted F
Tribunal Order Date 11-03-2011
Assessment Year 2005-2006
Appeal Filed On 09-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F MUMBAI BEFORE SHRI D.K. AGARWAL (J.M.) AND SHRI J. SUDHAKA R REDDY (A.M.) ITA NO. 2843/MUM /2010 ASSESSMENT YEAR : 2005-06 THE INCOME TAX OFFICER 16(2)(1) ROOM NO. 221 2 ND FLOOR MATRU MANDIR TARDEO MUMBAI 400 007. VS. M/S MATRU ASHISH CHS LTD. 39 NEPEANSEA ROAD MUMBAI -400 036. PAN : AAAAM2348A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D. CHANDA RESPONDENT BY : SHRI SAMEER DALAL O R D E R PER D.K. AGARWAL J.M. THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AG AINST THE ORDER DATED 15.1.2010 PASSED BY THE LD. CIT (A) FOR THE A .Y. 2005-06. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE IS CO-OPERATIVE HOUSING SOCIETY. IN THE RETURN THE ASSESSEE HAS S HOWN AN AMOUNT OF ` 4 69 001/- AS INCOME FROM HOUSE PROPERTY BANK INTE REST AMOUNTING TO ` 8 108/- AND FDR INTEREST AMOUNTING TO ` 14 51 419/-. AS AGAINST THE GROSS TOTAL INCOME OF ` 19 28 528/- THE ASSESSEE HAS CLAIMED DEDUCTIONS U/S 80P(2)(C) OF ` 50 000/- AND U/S 80P(2)(D) OF ` 12 34 055/- TO ARRIVE AT THE TOTAL TAXABLE INCOME OF ` 6 44 470/-. HOWEVER ASSESSMENT WAS COMPLETED AT AN INCOME OF ` 17 63 890/- VIDE ORDER DATED 30.11.2007 PASSED U/S 143(3) OF THE INCOME TAX ACT 1961 (THE ACT). ON APPEAL THE LD. CIT(A) WHILE GIVING SUBSTANTIAL RELIEF PARTLY ALLOWED THE APPEAL. ITA NO. 28 43/MUM/2010 M/S MATRU ASHISH CHS LTD. 2 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 4. GROUND NO. 1 READS AS UNDER:- 1. THE LD. CIT(A) ERRED IN DELETING THE ADDITION ON ACCOUNT OF TRANSFER CHARGES OF ` 4 36 800/- FOLLOWING THE DECISION OF HONBLE HIGH COURT OF BOMBAY IN THE CASE OF M/S SHYAM CHS AND SUPRABHAT C HS WHEREIN IT HAS BEEN HELD THAT ALL AMOUNTS RECEIVED BY THE CHS ON THE GROUNDS OF TRANSFER CHARGES ARE EXEMPT UNDER THE PRINCIPLE OF MUTUALITY. THE DECISION HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AN D THE ISSUE IS SUB- JUDICE. 5. DURING THE COURSE OF ASSESSMENT PROCEEDING IT W AS INTER ALIA OBSERVED BY THE A.O. THAT THE ASSESSEE SOCIETY COLL ECTED ` 4 36 800/- FROM ITS TWO OUTGOING MEMBERS FOR ALLOWING THEM FOR TRANSFER OF FLATS AND THE SAME WAS CLAIMED AS EXEMPT ON THE GROUND OF MUT UALITY. HOWEVER THE A.O. FOR THE REASONS DISCUSSED IN DETAIL IN THE ASSESSMENT ORDER FOR THE A.Y. 2003-04 IN THE CASE OF THE ASSESSEE TREATE D THE RECEIPT OF ` 4 36 800/- BY WAY OF TRANSFER PREMIUM AS INCOME FRO M BUSINESS AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 6. ON APPEAL THE LD. CIT(A) FOLLOWING DECISIONS OF HONBLE BOMBAY HIGH COURT IN THE CASES OF M/S SHYAM CHS AND SUPRAB HAT CHS DECISION GIVEN ON 1.10.2009 WHEREIN IT HAS BEEN CLE ARLY STATED THAT ALL AMOUNTS RECEIVED BY THE CHS ON THE GROUNDS OF TRANS FER CHARGES ARE EXEMPT UNDER THE PRINCIPLE OF MUTUALITY DELETED TH E ADDITION OF TRANSFER FEES OF ` 4 36 800/- MADE BY THE A.O. 7. AT THE TIME OF HEARING THE LD. D.R. SUPPORTS TH E ORDER OF THE A.O. ITA NO. 28 43/MUM/2010 M/S MATRU ASHISH CHS LTD. 3 8. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSES SEE SUBMITS THAT THE ISSUE STANDS COVERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 687/MUM/2010 FOR A.Y. 2004-05 ORDER DATED 24.11.201 0 THEREFORE THE ISSUE MAY BE DECIDED ACCORDINGLY. HE ALSO PLACED O N RECORD A COPY OF THE TRIBUNAL ORDER. 9. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD WE FIND THAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS IT IS ALSO NOT IN DISPUTE TH AT THE A.O. WHILE MAKING THE ADDITION HAS FOLLOWED THE REASONING GIVE N IN THE ASSESSMENT ORDER FOR THE A.Y. 2003-04. WE FURTHER FIND THAT TH E LD. CIT(A) AFTER CONSIDERING THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN SINDH CO OPERATIVE HOUSING SOC. VS. ITO (2009) 317 ITR 4 7 (BOM.) HAS FOLLOWED THE SUBSEQUENT DECISIONS OF THE HON'BLE JU RISDICTIONAL HIGH COURT IN M/S. SHYAM CHS AND SUPRABHAT CHS AND DELET ED THE ADDITION MADE BY THE ASSESSING OFFICER. 10. IN SHYAM CO OPERATIVE HOUSING SOC. VS. CIT IN INCOME TAX APPEAL NOS.92 93 AND 206 OF 2008 DATED 17.7.2009 ON THE QU ESTION WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A NY PART OF TRANSFER FEE RECEIVED BY THE ASSESSEE SOCIETIES WHETHER FROM O UTGOING OR INCOMING MEMBERS- IS NOT LIABLE TO TAX ON THE GROUND OF MUTU ALITY? IT HAS BEEN HELD AS UNDER:- IN INCOME TAX APPEAL NO.92 93 2006 OF 2008 IN ADDITION IT IS SUBMITTED THAT THE DEMANDS ARE IN RE SPECT OF THE ASSESSMENT YEARS 1999-2000 2000-2001 2001-200 2. THE TRANSFER PREMIUM WAS CHARGED BASED ON THE GOVERNMENT CIRCULAR DATED 27.11.1989 AND 20.12.1989 . IT IS SUBMITTED THAT CLAUSE 40(D)(7) OF THE MODEL BYE LAWS DRAFTED ON 2.7.2001 AND THE CIRCULAR DATED 9.8.2001 WERE THEREFORE NOT APPLICABLE TO THE CASE OF THE APPELL ANT. ITA NO. 28 43/MUM/2010 M/S MATRU ASHISH CHS LTD. 4 BY OUR JUDGMENT DATED 17 TH JULY 2009 IN INCOME TAX APPEAL NO.931 OF 2004 IN THE CASE OF SIND COOP. HSG. SOC. VERSUS THE INCOME TAX OFFICER WE HAVE HELD TH AT BOTH CONTRIBUTIONS BY THE OUTGOING AND INCOMING MEMBERS ARE SUBJECT TO PRINCIPLE OF MUTUALITY. WE HAVE ALSO DI SCUSSED THE EFFECT OF THE GOVERNMENT CIRCULAR DATED 27.11.1 989 AND 20.12.1989. IN THE LIGHT OF THAT THE QUESTION HAS TO BE ANSWERED IN THE AFFIRMATIVE IN FAVOUR OF THE ASSESS EE AND AGAINST THE REVENUE. 11. SIMILAR VIEW WAS TAKEN BY THEIR LORDSHIPS IN SU PRABHAT CO- OPERATIVE HOUSING SOCIETY LTD. VS. ITO IN INCOME TA X APPEAL NO.1972 OF 2009 WHEREIN ON THE QUESTIONS OF LAW : 1) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE APPELLATE TRIBUNAL WAS RIGHT IN COMING TO THE CONCLUSION THAT THE PRINCIPLE OF MUTUALITY DOES NOT APPLY TO VARIOUS AMOUNTS RECEIVE D BY THE APPELLANT? 2) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE SUM OF RS. 7 44 000/- RECEIVED FROM ITS MEMBERS IS LIABLE TO BE TAXED AS INCOME OF THE APPELLANT ? 3) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE SUM OF RS. 20 695/- RECEIVED AS INTEREST IS LIABLE TO BE T AXED AS INCOME OF THE APPELLANT? IT HAS BEEN HELD : 5. BOTH PARTIES AGREE THAT THE AFORESAID THREE QUESTIONS ARE COVERED BY THE JUDGMENT OF THE OF DIV ISION BENCH OF THIS COURT DATED 17 TH JULY 2009 IN INCOME TAX APPEAL NO. 931/2004 (SIND CO-OP. HSG. SOCIETY V. IN COME TAX OFFICER) REPORTED IN [2009] 26 DTR (BOM.) 149. ACCORDINGLY ALL THE THREE QUESTIONS ARE ANSWERED I N FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. APPEAL IS DISPOSED OF IN TERMS OF THIS ORDER WITH NO ORDER AS TO COSTS . ITA NO. 28 43/MUM/2010 M/S MATRU ASHISH CHS LTD. 5 12. IN THE ABSENCE OF ANY DISTINGUISHABLE FEATURE B ROUGHT ON RECORD BY THE REVENUE WE RESPECTFULLY FOLLOWING THE ABOVE DE CISIONS OF THE HONBLE JURISDICTIONAL HIGH COURT HOLD THE AMOUNT RECEIVED BY THE ASSESSEE IS SUBJECT TO PRINCIPLE OF MUTUALITY AND ACCORDINGLY W E ARE INCLINED TO UPHOLD THE FINDING OF LD. CIT(A) IN DELETING THE AD DITION MADE BY THE A.O. THE GROUND TAKEN BY THE REVENUE IS THEREFORE REJECT ED. 13. GROUND NO. 2 READS AS UNDER:- THE LD. CIT(A) ERRED IN DELETING THE ADDITION ON AC COUNT OF NON- OCCUPANCY CHARGES OF ` 4 13 442/- FOLLOWING THE DECISIONS OF HONBLE MUMBAI ITAT WHEREIN IT HAS BEEN HELD THAT NON-OCCUP ANCY CHARGES TAKEN FROM MEMBERS WHO HAVE LET OUT THEIR FLATS IS EXEMPT UNDER PRINCIPLE OF MUTUALITY. 14. BRIEF FACTS OF THE ISSUE ARE THAT THE A.O. NOTE D THAT THE ASSESSEE IN THE INCOME AND EXPENDITURE ACCOUNT HAS CREDITED AN AMOUNT OF ` 4 13 442/- AS NON-OCCUPANCY CHARGES. ON BEING ASK ED IT WAS SUBMITTED BY THE ASSESSEE THAT THIS AMOUNT WAS COLL ECTED FROM THE MEMBERS AND WAS USED FOR PROVIDING COMMON FACILITIE S LIKE SECURITY LIFT CLEANING ETC. TO THE MEMBERS AND AS PER THE PRINCIP LE OF MUTUALITY THE AMOUNT RECEIVED AS NON-OCCUPANCY CHARGES CANNOT BE CONSIDERED AS INCOME OF THE SOCIETY. HOWEVER THE A.O. FOR THE R EASONS AS DISCUSSED IN THE ASSESSMENT ORDERS FOR THE A.Y. 2003-04 AND 2004 -05 AND KEEPING IN VIEW THAT THE ADDITION ON THIS ACCOUNT HAS BEEN UPH ELD BY THE LD. CIT(A) FOR A.Y. 2003-04 AND THE FACTS ARE BEING IDENTICAL TREATED THE RECEIPT OF ` 4 13 442/- BEING NON-OCCUPANCY CHARGES AS INCOME FR OM BUSINESS AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 15. ON APPEAL BEFORE THE LD. CIT(A) THE LD. CIT(A ) FOLLOWING THE CONSISTENT VIEW OF THE TRIBUNAL HELD THAT THE SAME IS EXEMPT UNDER THE PRINCIPLE OF MUTUALITY DELETED THE ADDITION MADE B Y THE A.O. ITA NO. 28 43/MUM/2010 M/S MATRU ASHISH CHS LTD. 6 16. AT THE TIME OF HEARING THE LD. D.R. SUPPORTS T HE ORDER OF THE A.O. 17. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THIS ISSUE IS ALSO COVERED IN FAVOUR OF THE ASSESSE E BY THE SAME ORDER OF THE TRIBUNAL THEREFORE THE ISSUE MAY BE DECIDED A CCORDINGLY. 18. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE LD. D R AND PERUSING THE MATERIAL AVAILABLE ON RECORD WE FIND THAT THERE IS NO DISPUTE THAT THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THE FACTS OF THE ASSESSEE'S CASE FOR THE ASSESSMENT YEAR 2004-05 WHEREIN THE TRIBUNAL HA S DELETED THE ADDITION MADE BY THE ASSESSING OFFICER ON THE GROUN D OF PRINCIPLE OF MUTUALITY. THE LD. CIT(A) AFTER FOLLOWING THE CONSI STENT VIEW OF THE TRIBUNAL DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUGHT ON RE CORD BY THE LD. DR WE RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL SUPRA AND THE RULE OF CONSISTENCY DECLINE TO INTERFERE WITH THE ORDER PAS SED BY THE LD. CIT(A) IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER . THE GROUND TAKEN BY THE REVENUE IS THEREFORE REJECTED. 19. IN THE RESULT THE REVENUES APPEAL STANDS DISM ISSED. ORDER PRONOUNCED ON THIS 11 TH OF MARCH 2011. SD/- (J. SUDHAKAR REDDY) ACCOUNTANT MEMBER SD/- (D.K. AGARWAL) JUDICIAL MEMBER MUMBAI DATED 11 TH MARCH 2011. RK ITA NO. 28 43/MUM/2010 M/S MATRU ASHISH CHS LTD. 7 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- 27 MUMBA I 4. COMMISSIONER OF INCOME TAX CITY -XVI MUMBAI 5. DEPARTMENTAL REPRESENTATIVE BENCH F MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR ITAT MUMBAI ITA NO. 28 43/MUM/2010 M/S MATRU ASHISH CHS LTD. 8 1 DRAFT DICTATED ON 8 .3.11 SR PS 2 DRAFT PLACED BEFORE AUTHOR ON 9 . 3 .11 SR PS 3 DRAFT PROPOSED & PLACE BEFORE THE 2 ND MEMBER JM/AM 4 DRAFT DIS CUSSED/APPROVED BY 2 ND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR PS SR.PS 6 KEPT FOR PRONOUNCEMENT ON SR PS 7 FILE SENT TO THE BENCH CLERK SR PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE ON WHICH FILE GOES TO THE AR 10 DATE OF DESPATCH SR PS