ACIT 21(1), MUMBAI v. NEW INDIA CO-OP HSG. SOC. LTD, MUMBAI

ITA 5846/MUM/2009 | 2001-2002
Pronouncement Date: 31-01-2011 | Result: Dismissed

Appeal Details

RSA Number 584619914 RSA 2009
Bench Mumbai
Appeal Number ITA 5846/MUM/2009
Duration Of Justice 1 year(s) 2 month(s) 26 day(s)
Appellant ACIT 21(1), MUMBAI
Respondent NEW INDIA CO-OP HSG. SOC. LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 31-01-2011
Date Of Final Hearing 14-12-2010
Next Hearing Date 14-12-2010
Assessment Year 2001-2002
Appeal Filed On 04-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI J. SUDHAKKAR REDDY (AM) AND SMT ASHA VIJAYARAGHAVAN (JM) ITA NOS. 5846 5847 & 5848/MUM/2009 (ASSESSMENT YEARS-2001-02 2002-03 & 2005-06) THE ACIT CIR. 21(1) PRATYAKSHAKAR BHAVAN BANDRA KURLA COMPLEX BANDRA (E) MUMBAI-400 051 VS. M/S. NEW INDIA CO.OP. HSG. SOC. LTD. SANJEEV N.S. ROAD JVPD SCHEME MUMBAI-400 049 PAN-AAABN 0003 E (APPELLANT) (RESPONDENT) C.O. NOS. 123 124 & 125/MUM/2010 (ARISING OUT OF ITA NOS. 5846 5847 & 5848/MUM/2009 (ASSESSMENT YEARS-2001-02 2002-03 & 2005-06) M/S. NEW INDIA CO.OP. HSG. SOC. LTD. SANJEEV N.S. ROAD JVPD SCHEME MUMBAI-400 049 PAN-AAABN 0003 E VS. THE ACIT CIR. 21(1) PRATYAKSHAKAR BHAVAN BANDRA KURLA COMPLEX BANDRA (E) MUMBAI-400 051 (CROSS OBJECTOR ) (RESPONDENT) ASSESSEE BY: SHRI PRAKASH JHUNJUNWALA MRS. ASHIMA GUPTA DEPARTMENT BY: SHRI RAJKUMAR JAHU O R D E R PER SMT. ASHA VIJAYARAGHAVAN (JM) THE APPEALS ARE FILED BY THE REVENUE AND THE CROSS OBJECTIONS ARE FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDE RS OF THE LD.CIT(A) MUMBAI FOR THE A.YRS 2001-02 2002-03 AND 2005-06. AS THESE APPEALS AND CROSS OBJECTIONS WERE HEARD TOGETHER AND RELATE TO CONNECTED ISSUES NE W INDIA CO. OP. HSG. SOC. 2 FOR THE SAKE OF CONVENIENCE ALL THESE APPEALS AND THE CROSS OBJECTIONS ARE BEING DISPOSED OFF BY THIS COMMON ORDER. 2. BEFORE THE LD. CIT(A) THE ASSESSEE HAD OBJECTED TO THE FOLLOWING ADDITIONS ON ACCOUNT OF TRANSFER FEES MADE BY THE A O. IN GROUND NO. 2 & 3 THE APPELLANT HAS OBJECTED TO THE FOLLOWING ADDITIONS ON A/C OF TRANSFER FEES. A.Y. 2001-02 - RS.90 00 000/- A.Y. 2002-03 - RS.1 50 00 000/- A.Y. 2005-06 - RS.2 50 00 000/- VIDE BOTH THE GROUNDS THE APPELLANT HAS AGITATED TH E ISSUE OF SOCIETY RECEIVING TRANSFER FEES BEING TAXABLE INCOME. THE A PPELLANT HAS CLAIMED THAT THE A.O. HAS IGNORED THE PRINCIPLE OF MUTUALITY IN DOING SO. . THE A.O. HAS STATED THAT THE TRANSFER FEE IS NOTH ING BUT THE PREMIUM COLLECTED ON TRANSFER OF SHARES AND INTEREST IN THE CAPITAL PROPERTY OF THE SOCIETY. THE CLAIM OF THE APPELLANT THAT SUCH C ONSIDERATION IS COVERED BY THE PRINCIPLE OF MUTUALITY WAS NOT AGREE D UPON BY THE A.O. FOR THE FOLLOWING REASONS: I. THE CONTRIBUTORS AS A CLASS OF MEMBERS ARE NOT P ARTICIPATORS IN THE SURPLUS. II. THE PREMUM IS COLLECTED FROM TRANSFERERS WHO AR E NOT MEMBERS AT THE TIME OF MAKING PAYMENT OF PREMIUM. III. THE MOTIVE OF PROFITEERING IS PARAMOUNT AS IS EVIDENT FROM THE FACT THAT THE ASSESSEE COLLECTED TRANSFER PREMIUM A T MUCH HIGHER RATE (BY MORE THAN 4 TIMES) THAN THE MAXIMUM PERMIS SIBLE LIMIT OF RS.25 000/- UNDER ITS BYE-LAWS. IV. THE PREMIUM COLLECTED IS A PART OF THE PROFIT A CCRUED ON THE SALE OF FLATS BY THE TRANSFEROR MEMBERS. THE PAYMENT OF PREMIUM IS NOT VOLUNTARY IT IS A REC URRING REVENUE RECEIPT LIABLE TO TAX IN THE HANDS OF THE ASSESSEE SOCIETY. NE W INDIA CO. OP. HSG. SOC. 3 FOR THE SAME REASON THE A.O. ALSO HELD THAT INCOME FROM OTHER SOURCES IS ALSO NOT COVERED BY MUTUALITY AND IS TA XABLE INCOME OF THE APPELLANT. 3. BEFORE THE LD. CIT(A) THE AR RELIED ON THE DECIS ION IN THE CASE OF SIND CO-OP HSG. SOCIETY VS. ITO PUNE AND OTHERS IN WHICH THE HONBLE COURT HAVE HELD THAT THE TRANSFER FEE CHARGED BOTH FROM THE TRANSFEROR AND TRANSFEREE ARE COVERED BY THE PRINCIPLE OF MUTU ALITY. 4. THE LD. CIT(A) HELD AS FOLLOWS: I HAVE CAREFULLY CONSIDERED THE ISSUE. THE HONBLE HIGH COURT MUMBAI IN ITA NO.931 OF 2004 IN THE CASE OF SIND CO -OP HSG. SOCIETY VS. ITO WARD 1(7) PUNE HAVE HELD THAT HE B ASIC TEST FOR APPLYING THE PRINCIPLE OF MUTUALITY IS WHETHER ANY COMMERCIALITY IS INVOLVED IN THE TRANSACTION AND WHETHER FROM THE MO NIES RECIVED THE SERVICES ARE BEING OFFERED IN THE NATURE OF PROFIT SHARING OR PRIVILEGES ADVANTAGES AND CONVENIENCES. FURTHER TE STS ARE WHETHER THE PARTICIPANTS AND THE CONTRIBUTORS ARE IDENTIFIA BLE AND BELONG TO THE SAME CLASS AND WHETHER THE MEMBERS HAVE THE RI GHT TO SHARE IN THE SURPLUS AND A RIGHT TO DEAL WITH ITS SURPLUS ES. ONCE THESE TESTS ARE SATISFIED THE COURT HAVE HELD THAT THE PR INCIPLE OF MUTUALITY APPLIES TO A CO-OPERATIVE HOUSING SOCIETY WHICH HAS ITS PREDOMINANT ACTIVITY THE MAINTENANCE OF PROPERTY O F THE SOCIETY INCLUDING ITS BUILDING AS LONG AS THERE IS NO TAINT OF COMMERCIALITY TRADE OR BUSINESS. THUS IT IS SEEN THAT IN THE LAT EST JUDGEMENT BY THE JURISDICTIONAL HIGH COURT THEY HAVE DEALT WITH THE ISSUES DECIDED BY ALL PREVIOUS JUDGEMENTS ON THE SUBJECT AND THE MATTER HAS BEEN SETTLED IN FAVOUR OF THE HOUSING SOCIETIES WITH REGARD TO PRINCIPLE OF MUTUALITY. THERE IS NOTHING IN THE CAS E TO SUGGEST THAT THE RECEIPT OF TRANSFER FEE BY THE APPELLANT SOCIET Y HAD ANY TRACE OF COMMERCIALITY TRADE OR BUSINESS. THEREFORE RESPEC TFULLY FOLLOWING THE RATIO OF THE JUDGEMET IN THE CASE CITED SUPRA THE A.O. IS DIRECTED TO DELETE THE ADDITION OF RS.90 00 000 RS.1 50 00 000/- AND RS.2 50 00 000/- FOR A.YS. 2001-02 2002-03 AND 200 5-06 RESPECTIVELY MADE IN RESPECT OF TRANSFER FEES. THIS GROUND OF APPEAL IS ACCORDINGLY ALLOWED. 5. FOR THE A.Y. 2001-02 THE APPELLANT HAS OBJECTE D TO THE DISALLOWANCE OF VARIOUS EXPENSES CLAIMED IN AUDITED P & L A/C. OF RS.3 64 524/-. 6. FOR A.Y. 2002-03 THE APPELLANT HAS OBJECTED TO THE DISALLOWANCE OF EXPENSES CLAIMED IN AUDITED P & L A/C. OF RS.9 0 6 976/- EXPENSES OF NE W INDIA CO. OP. HSG. SOC. 4 RS.8 48 364/- DURING DIWALI CELEBRATION AND REPAIRS AND MAINTENANCE EXPENSES OF RS.28 00 000/-. 7. FOR A.Y. 2005-06 THE APPELLANT HAS OBJECTED TO THE DISALLOWANCE OF EXPENSES CLAIMED IN AUDITED P & L A/C. OF RS.24 59 440/- EXPENSES OF RS.21 26 250/- DURING DIWALI CELEBRATION AND DON ATION PAID OF RS.20 05 000/-. 8. THE ASSESSING OFFICER HELD THAT THE EXPENSES CLA IMED BY THE ASSESSEE ARE NOT ALLOWABLE. THE ORDER OF THE AO HA S BEEN REPRODUCED AT PARA -14 OF THE CIT(A)S ORDER. 9. THE LD. CIT(A) HELD AS FOLLOWS: THE QUESTION OF ALLOWABILITY OR OTHERWISE OF EXPEN SES WOULD ARISE ONLY IF THE APPELLANT HAS A TAXABLE INCOME. ONCE TH E ENTIRE TRANSFER FEE HAS BEEN HELD TO BE NON-TAXABLE BEING GOVERNED UNDER THE PRINCIPLE OF MUTUALITY THE APPELLANT HAS NO OTHER INCOME IN RESPECT OF WHICH EXPENDITURE IS REQUIRED TO BE SET OFF. THE REFORE THE ISSUE OF ALLOWABILITY OF EXPENDITURE IS IRRELEVANT. ACCORDIN GLY THESE GROUNDS ARE CONSIDERED AS ALLOWED FOR STATISTICAL PURPOSE. 10. AGGRIEVED REVENUE IS IN APPEAL BEFORE US. 11. THE LD. DEPARTMENTAL REPRESENTATIVE FILED WRITT EN SUBMISSION DATED 28.10.2001. THE REVENUE CONTENTED THAT ASSESS EE HAD COLLECTED TRANSFER FEES IN EXCESS OF RS.25 000/-; WHEREAS NOT IFICATION DATED 09/08/2001 ISSUED UNDER MAHARASHTRA CO-OPERATIVE SO CIETY ACT PRESCRIBED THE MAXIMUM CEILING OF TRANSFER FEES OF RS.25 000/-. 12. THE ASSESSEE REPLIED AS FOLLOWS: FIRSTLY THE NOTIFICATION DATED 09/08/2001 ISSUED UNDER MAHARASHTRA CO-OPERATIVE SOCIETY ACT DOES NOT APPLY IN IMPUGNED CASE AS ASSESSEE IS A PLOT HOLDER SOCIETY WHEREAS T HE NOTIFICATION IS APPLICABLE ONLY IN RESPECT OF FLAT OWNER SOCIETY. A COPY OF NOTIFICATION IS FILED ON RECORD; SECONDLY THE ASSESSEE SOCIETY COLLECTED THE TRANSFER FEES I N ACCORDANCE WITH RULE6A OF FORM B OF ITS ADOPTED BYE -LAWS (PLEASE NE W INDIA CO. OP. HSG. SOC. 5 REFER PG.64 OF THE PAPER BOOK). THE REGISTRAR OF CO -OPERATIVE HSG. SOCEITY HAD APPROVED SUCH BYE-LAWS. THE REGISTRAR H AD EVEN APPROVED THE AMENDMENT IN TRANSFER FEES PROPOSED BY THE SOCIETY ON 09/06/2004. (PLEASE REFER PAGE 5 OF THE PAPER BO OK)/ THE AMENDED CLAUSE IS INCORPORATED IN AMENDED BYE-LAWS (PLEASE REFER PAGE 38 OF THE PAPER BOOK). THE APPROVAL ORDER DATE D 26/06/2004 ISSUED BY THE REGISTRAR OF CO-OPERATIVE SOCIETY IS REPRODUCED AS UNDER. ON EVERY PERMITTED DISPOSITION OF OR DEALIN G WITH ANY PLOT WITH OR WITHOUT ANY CONSTRUCTION ENCUMBRANCES THERE ON BY VIRTUE OF THESE REGULATIONS THE MEMBER SHALL PAY TO THE SOCIE TY AN AMOUNT EQUIVALENT TO 10% OF THE MARKET VALUE OF THE PLOT A S IF IT WAS VACANT. NOTWITHSTANDING ANYTHING STATED HEREINABOVE NO AMO UNT IS PAYABLE TO THE SOCIETY SHOULD THE PLOT AND/OR BUILD ING OR ANY PART THEREOF DEVOLVE ON A DIRECT DESCENDANT OR LEGAL HEI R OF THE MEMBER. 13. THE REPRESENTATIVE OF REVENUE HAS FURTHER CONTE NDED BY WRITTEN SUBMISSIONS THAT THE TRANSFER FEES RECEIVED BY THE ASSESSEE SOCIETY IS NOT A VOLUNTARY CONTRIBUTION. 14. THE ASSESSEE COUNTERED OBJECTION BY SUBMITTING THAT VOLUNTARY CONTRIBUTION HAD BEEN DECIDED IN THE CASE OF M/S. S IND CO-OP. HSG. SOCIETY VS. ITO (317 ITR 47 (BOM)) WHEREIN HONBLE HIGH COURT HELD THAT WHETHER THE FEE WAS VOLUNTARY OR NOT WOULD MAKE NO DIFFERENCE TO THE PRINCIPLE OF MUTUALITY. PAYMENTS WERE MADE UNDER TH E BYE-LAWS OF THE ASSESSEE WHICH CONSTITUTED A CONTRACT BETWEEN THE A SSESSEE AND ITS MEMBERS WHICH WAS VOLUNTARILY ENTERED INTO AND VOLU NTARILY CONDUCTED AS A MATTER OF CONVENIENCE AND DISCIPLINE FOR RUNNING OF THE ASSESSEE- SOCIETY. SIMILAR VIEW IS TAKEN IN THE CASE OF MITTAL COURT P REMISES CO-OP. LTD. VS. ITO (184 TAXMAN 292 (BOM). 15. THE REPRESENTATIVE OF REVENUE FURTHER CONTENDE D THAT THE TRANSFER FEES HAD BEEN RECEIVED FROM THE INCOMING M EMBER THEREFORE THE PRINCIPLE OF MUTUALITY WILL NOT APPLY. 16. THE ASSESSEE REPLIED TO THE ARGUMENT AS FOLLOWS : THE FEES RECEIVED BY THE SOCIETY FROM THE TRANSFER OR OR FROM THE TRANSFEREE WILL NOT MAKE A DIFFERENCE AS HAD BEEN D ECIDED IN THE CASE OF M/S. SIND CO-OP. HSG. SOCIETY WHEREIN IT IS HELD THAT BOTH NE W INDIA CO. OP. HSG. SOC. 6 THE INCOMING OR THE OUTGOING MEMBER HAD TO CONTRIBU TE TO THE COMMON FUND OF THE ASSESSEE. THE AMOUNT PAID WAS TO BE EXCLUSIVELY USED FOR THE BENEFIT OF THE MEMBERS AS A CLASS. THE AMOUNT COULD ONLY BE APPROPRIATED ON THE TRANSFEREE BEING ADMITTED AS A MEMBER. IF THE TRANSFEREE WAS NOT ADM ITTED AS A MEMBER THE AMOUNT RECEIVED WOULD HAVE TO BE REFUND ED AS THE AMOUNT WAS PAYABLE ONLY ON A TRANSFER OF RIGHTS OF THE TRANSFEROR IN THE TRANSFEREE. 17. FINALLY THE REPRESENTATIVE OF REVENUE OBJECTED THAT THE AMOUNT COLLECTED IS NOT SPENT ENTIRELY TOWARDS MUTUAL BENE FIT OF ALL MEMBERS. THE ASSESSEE IN REPLY STATED AS FOLLOWS: THE FACTS ARE THAT THE ASSESSEE DISTRIBUTED RS.10 LACS TO CERTAIN MEMBERS TOWARDS COMPENSATION OF LOSS INCURRED DUE T O DEVASTATING FLOOD WHICH OCCURRED ON 26/07/2005. THE SOCIETY COM PENSATED LOSS TO RESIDENT MEMBERS WHOSE PREMISES WERE DAMAGE D TO CARRY ESSENTIAL EXTERNAL REPAIRS OF THE PREMISES. THE SOC IETY DID NOT PAY ANY AMOUNT TO VACANT PLOT OWNERS AS NOT LOSS WAS IN CURRED BY THEM ON ACCOUNT OF THE FLOOD. FURTHER SUCH SUM WAS DIST RIBUTED AFTER PASSING A VALIDE RESOLUTION AT THE GENERAL BODY MEE TING OF THE SOCIETY. THE DISTRIBUTION OF CERTAIN GIFTS BEING GO LD COINS GOLD BARS BONDS ARE THE GRATUITOUS GIFTS DISTRIBUTED EVERY AN NUALLY DURING ANNUAL FUNCTION TO VARIOUS MEMBERS WHO MAINTAINED D ISCIPLINE AND ABIDED LAWS OF THE SOCIETY. THE DISTRIBUTION OF SMA LL GIFTS TO ENCOURAGE MEMBERS TO MAINTAIN DISCIPLINE WILL NOT A DVERSELY AFFECT THE MUTUALITY. THE ALLEGATIONS MADE BY 1-2 MEMBERS OF THE SOCIETY WERE DISPUTED BY SOCEITYS OFFICE BEARERS AND HONBLE DIVISIONAL REGISTRAR OF CO- OPERATIVE SOCIETY VIDE ORDER DATED 02/01/2008 (COP OF ORDER FILED ON RECORD) DISCHARGED THE OFFICE BEARERS AND SOCIET Y AGAINST ALL ALLEGED CHARGES. THEREFORE IT WAS PRAYED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE AUTHORITIES GOVERNING CO-OPERATIVE SOCIETY LAWS FOUND THAT THERE IS NO IRREGULARITIES COMMITTED BY THE SOCIETY AND I TS OFFICE BEARERS THUS THE BENEFIT OF MUTUALITY MAY KINDLY BE ALLOWED TO THE ASSESSEE SOCIETY. 18. WE HEARD BOTH THE PARTIES. THE GROUNDS OF APPE AL RAISED BY REVENUE FOR 2001-02 ARE AS FOLLOWS: NE W INDIA CO. OP. HSG. SOC. 7 1. (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD.CIT(A) HAS ERRED IN DELETING AN ADDITION OF RS.90 LACS ON ACCOUNT OF TRANSFER FEES RECEIVED FROM MRS. HEENA P ATEL. (II) THE LD. CIT(A) FAILED TO CONSIDER THE FACT THA T CONTRIBUTION RECEIVED BY ASSESSEEE SOCIETY FROM ITS MEMBER SMT. HEENA PATEL IS TAXABLE SINCE PRINCIPLE OF MUTUALITY SHOULD NOT BE APPLICABLE ON THE FOLLOWING GROUNDS. (A) IT IS NOT A VOLUNTARY CONTRIBUTION FROM THE MEMBER BUT FROM A PERSON WHO WANTS TO BECOME A MEMBER (I.E. TRANSFERE E). (B) THE AMOUNT SO COLLECTED HAS BEEN DISTRIBUTED ONLY A MONG SELECTED FEW MEMBERS BY WAY OF DISTRIBUTION OF GOLD COIN GOLD BARS & ICICI BANK BONDS OF RS.50 000/- EACH AN D HAS NOT BEEN SHARED BY ALL MEMBERS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE VARIOUS EX PENSES CLAIMED IN P & L ACCOUNT OF RS.3 64 524/-. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFI CER RESTORED. 4. THE APPELLANT CRAVES LEAVE TO AMEND OR TO ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 19. WE FIND THAT THE MATTER IS NO MORE RES INTEGRA BY THE DECISION IN THE CASE OF SIND CO. OP. HSG. SOC. VS ITO 317 ITR 4 7 AND IN THE CASE OF MITTAL COURT PREMISES CO. OP. SOC. LTD. VS ITO 320 ITR 414 (MUM) WE CONFIRM THE VIEW TAKEN BY THE LD. CIT(A) AND THEREF ORE THE REVENUES APPEAL IN GROUND NO. (I) & (II) (A) IS DISMISSED. 20. IN GROUND NO. (I)(B) THE REVENUE HAS OBJECTED ON THE GROUND THAT THE AMOUNT COLLECTED FROM THE TRANSFEREES HAVE BEEN DISTRIBUTED ONLY AMONG SELECTED NEW MEMBERS BY WAY OF DISTRIBUTION O F GOLD COIN GOLD BARS & ICICI BANK BONDS OF RS. 50 000/- AND NOT SH ARED BY ALL MEMBERS. 21. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE PROD UCED THE COPY OF THE ORDER DT. 2.1.2008 BY THE DIVISIONAL REGISTRAR OF THE CO. OP. SOC BYT WHICH THE OFFICE BEARERS AND THE SOCIETY WERE DISCH ARGED AGAINST ALL ALLEGED CHARGES BEING THAT ASSESSEE DISTRIBUTED RS. 10 00 000/- TO CERTAIN MEMBERS AND NOT ALL MEMBERS TOWARDS COMPEN SATION OF LOSS INCURRED DUE TO DEVASTATING FLOOD OCCURRED ON 26.7. 2005. NE W INDIA CO. OP. HSG. SOC. 8 22. SINCE THE AUTHORITIES GOVERNING CO. OP. SOC. LA WS FOUND THAT THERE ARE NO IRREGULARITIES EITHER BY THE SOCIETY O R THE OFFICE BEARERS. WE ARE OF THE OPINION THAT THE BENEFIT OF MUTUALITY IS ALLOWED TO THE SOCIETY. THIS GROUND OF THE REVENUE IS DISMISSED. 23. FOR THE A.Y. 2002-03 GROUND NO. 2 & 3 READS AS FOLLOWS: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WITHOUT ANY JUSTIFICATION ERRED IN DISAL LOWING VARIOUS EXPENSES CLAIMED IN P&L ACCOUNT OF RS. 9 06 976/-. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) WITHOUT ANY JUSTIFICATION ERRED IN DISAL LOWING OF REPAIRS & MAINTENANCE EXPENSES OF RS. 28 00 000/-. 24. FOR THE A.Y. 2005-06 THE GROUND NOS. 2(I) 2(I I) AND 2(III) RAISED BY THE REVENUE READ AS FOLLOWS: 2(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW THE LD.CIT(A) WITHOUT ANY JUSTIFICATION ERRED IN DISALL OWING VARIOUS EXPENSES CLAIMED IN P & L ACCOUNT OF RS.24 59 440/- (II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD(CIT) WITHOUT ANY JUSTIFICATION ERRED IN DIS ALLOWING EXPENSES INCURRED OF RS.21 26 250/- DURING DIWALI CELEBRATIO NS. (III) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD(CIT) WITHOUT ANY JUSTIFICATION ERRED IN DIS ALLOWING OF DONATION PAID OF RS.20 05 000/- 25. AS RIGHTLY HELD BY THE LD. CIT(A) IN ALL THE AS SESSMENT YEARS BEFORE US THE REVENUE HAS RAISED THE GROUNDS REGARDING ALL OWABILITY OF EXPENSES CLAIMED IN THE P & L ACCOUNT ONCE THE ENTI RE TRANSFER FEES HAS BEEN HELD TO BE NON TAXABLE UNDER THE PRINCIPLE OF MUTUALITY THE ASSESSEE HAS NO OTHER INCOME IN RESPECT OF WHICH EX PENDITURE IS REQUIRED TO BE SET OFF. HENCE THE ISSUE OF ALLOW ABILITY OF EXPENSE IS NOT RELEVANT AND THEREFORE THE GROUNDS RAISED BY THE RE VENUE ARE DISMISSED. WE FAIL TO UNDERSTAND HOW THE REVENUE IS AGGRIEVED WITH THE DECISION OF THE LD. CIT(A) NOT TO ALLOW THE CLAIM OF THE ASSESS EE FOR EXPENDITURE. NE W INDIA CO. OP. HSG. SOC. 9 26. THE CROSS OBJECTION NO. 123 124 & 125/M/2010 H AS NOT PRESSED BY THE ASSESSEE THEREFORE IT IS DISMISSED AS NOT P RESSED. ORDER PRONOUNCED ON THIS 31 ST DAY OF JANUARY 2011. SD/- SD/- (J.SUDHAKAR REDDY) ( ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIA L MEMBER MUMBAI DATED 31 ST JANUARY 2011 RJ COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CENTRAL - I CONCERNED 5. THE DR G BENCH TRUE COPY BY ORDER ASST. REGISTRAR I.T.A.T MUMBAI NE W INDIA CO. OP. HSG. SOC. 10 DATE INITIALS 1 DRAFT DICTATED ON: 1.9..2010 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 1.9.2010 ______ SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: _________ ______ JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: _________ ______ JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: _________ ______ SR. PS/PS 6. KEPT FOR PRONOUNCEMENT ON: _________ ______ SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: _________ ______ S R. PS/PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK: _________ ______ 9. DATE ON WHICH FILE GOES TO AR _________ ______ 10. DATE OF DISPATCH OF ORDER: