COMMON EFFLUENT TREATMENT PLANT ( THANE BELAPUR) ASSOCIATION, MUMBAI v. ITO 10(3)(1), MUMBAI

ITA 524/MUM/2012 | 2009-2010
Pronouncement Date: 26-11-2014 | Result: Dismissed

Appeal Details

RSA Number 52419914 RSA 2012
Assessee PAN AABCC4712H
Bench Mumbai
Appeal Number ITA 524/MUM/2012
Duration Of Justice 2 year(s) 10 month(s)
Appellant COMMON EFFLUENT TREATMENT PLANT ( THANE BELAPUR) ASSOCIATION, MUMBAI
Respondent ITO 10(3)(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 26-11-2014
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 26-11-2014
Date Of Final Hearing 18-11-2014
Next Hearing Date 18-11-2014
Assessment Year 2009-2010
Appeal Filed On 25-01-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C MUMBAI BEFORE SHRI SANJAY ARORA ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA JUDICIAL MEMBER ITA NO. 524/MUM/2012 ASSESSMENT YEAR: 2009-10 M/S. COMMON EFFLUENT TREATMENT PLANT (THANE BELAPUR) ASSOCIATION C/O R.K. KHANNA & ASSOCIATES 402 REGENT CHAMBERS NARIMAN POINT MUMBAI- 400 021 PAN: AABCC 4712 H VS. ITO 10(3)(1) MUMBAI (APPELLANT) (RESPON DENT) ASSESSEE BY : NONE REVENUE BY : SHRI PREMANAND J. DATE OF HEARING : 18 . 11 . 2014 DATE OF ORDER : 26 . 1 1 .2014 O R D E R PER AMIT SHUKLA JM: THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGA INST ORDER DATED 30.12.2011 PASSED BY LD.CIT(A)-22 MUMBAI FOR THE QUANTUM OF ASSESSMENT PASSED U/S 143(3) FOR THE A.Y. 2009-10. THE ONLY ISSUE RAISED IN THE GROUNDS OF APPEAL IS THAT LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN TAXING THE INTEREST INCOME OF RS.1 50 9 32/- RECEIVED ON COMMERCIAL DEPOSITS WITH MAHARASHTRA STATE ELECTRIC ITY BOARD (MSEB) WHICH WAS CLAIMED TO BE NON TAXABLE IN VIEW OF THE PRINCIPLE OF MUTUALITY. ITA NO. 524/MUM/2012 M/S. COMMON EFFLUENT TREATMENT PLANT ASSESSMENT YEAR: 2009-10 2 2. DESPITE SERVICE OF NOTICE TO THE APPELLANT ASSES SEE NONE APPEARED ITS BEHALF THEREFORE WE ARE DECIDING THE APPEAL O N MERITS AFTER HEARING THE DEPARTMENTAL REPRESENTATIVE. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ON ASSOCIATION INCORPORATED AS A COMPANY U/S 25 OF THE COMPANIES A CT 1956 WITH THE OBJECT OF SETTING UP EFFLUENT TREATMENT PLANT FOR T HE MEMBERS OF THE ASSOCIATION WHO RUN INDUSTRIAL UNITS IN TRANS THAN E AREA. THE OBJECTS ARE MET BY THE CONTRIBUTION MADE BY THE MEMBERS FOR THE PURPOSE OF SETTING UP EFFLUENT TREATMENT FACILITY. THE ASSESS ING OFFICER HAS TREATED ALL THE INTEREST INCOME AS TAXABLE ON THE GROUND TH AT IT AS DOES NOT FALL WITHIN THE AMBIT OF PRINCIPLE OF MUTUALITY. THE L D.CIT(A) FOLLOWING THE EARLIER YEAR ORDER OF THE LD.CIT(A) UPHELD THE ORDE R OF THE AO. IN THE EARLIER ORDER THE LD.CIT(A) HAS REFERRED TO THE DE CISION OF HONBLE BOMBAY HIGH COURT IN ASSESSEES OWN CASE FOR THE A. Y. 2001-02 WHEREIN THE HONBLE HIGH COURT VIDE JUDGMENT AND OR DER DATED 17.06.201 AFTER CONSIDERING THE ENTIRE LAW AND VAR IOUS JUDGEMENTS HELD THAT INTEREST INCOME IS OUTSIDE THE PURVIEW OF PRI NCIPLE OF MUTUALITY. THIS BOMBAY HIGH COURT DECISION HAS BEEN FOLLOWED B Y THE ITAT IN THEIR SUBSEQUENT DECISIONS. 4. BEFORE US THE LD. DR SUBMITTED THAT IN THIS CASE THE ISSUE OF TAXABILITY OF INTEREST HAS BEEN DECIDED AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE BY THE HONBLE BOMBAY HIGH CO URT IN THE CASE OF THE ASSESSEE ITSELF. THEREFORE THE ORDER OF THE LD .CIT(A) SHOULD BE CONFIRMED. 5. AFTER CONSIDERING THE RELEVANT FINDING OF THE LD .CIT(A) AND ALSO THE MATERIAL PLACED ON RECORD WE FIND THAT THE ISSUE O F TAXABILITY OF INTEREST ON FIXED DEPOSIT WITH BANK AND OTHER DEPOSITS IN P RINCIPLE HAS BEEN ITA NO. 524/MUM/2012 M/S. COMMON EFFLUENT TREATMENT PLANT ASSESSMENT YEAR: 2009-10 3 DECIDED AGAINST THE ASSESSEE AND IN FAVOUR OF THE R EVENUE BY HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF THE ASSESS EE ITSELF VIDE JUDGMENT AND ORDER DATED 17.06.2010 THE COPY OF WHICH IS AV AILABLE IN THE FILE. IT HAS BEEN INFORMED BY THE LD. DR THAT THE TRIBUNAL IN THE A.Y. 2006-07 EARLIER YEARS HAS DECIDED THIS ISSUE IN FAVOUR OF T HE REVENUE. FROM THE PERUSAL OF THE ASSESSMENT ORDER IT IS SEEN THAT THE ASSESSEE HAS ITSELF OFFERED INTEREST ON BANK DEPOSIT AS TAXABLE INCOME HOWEVER THE AMOUNT OF INTEREST OF RS.1 15 932/- WHICH WAS RECEIVED ON DEPOSIT WITH THE MSEB HAS BEEN CLAIMED AS EXEMPT PRINCIPLE OF MUTUA LITY. IN OUR OPINION EVEN THIS INTEREST INCOME WILL NOT COME WIT HIN THE PRINCIPLE OF MUTUALITY AS THE INTEREST HAS BEEN RECEIVED FROM AN OUTSIDER THAT IS NONE MEMBER AND NOT DURING THE COURSE OF TRANSACTIO N BETWEEN THE MEMBERS OUR MEMBERS. THUS THE CHARACTER OF SUCH INT EREST INCOME WILL PARTAKE THE SAME CHARACTER OF THE INTEREST WHICH AR E RECEIVABLE ON THE DEPOSITS MADE WITH THE BANK. IN ANY CASE THIS MATTE R HAS BEEN NOW SETTLED BY THE HONBLE SUPREME COURT IN THE CASE OF BANGALORE CLUB VS. CIT REPORTED AT (2013) 350 ITR 509 (SC). THUS APPEAL FILED BY THE ASSESSEE IS DISMISSED. 6. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF NOVEMBER 2014. SD/ - SD/- (SANJAY ARORA) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED:26.11.2014 *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT(A) CONCERNED MUMBAI THE DR C BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI.