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2015 (11) TMI 1301 - ITAT MUMBAIAmount received towards the development fund - Held that:- From the record found that amount so received by the assessee was within the framework of law of the society, thus, there was no profit motive attributed to the society. In order to bring the contribution within the net of tax, there should exist a pervading profit motive. The transferrable development rights premium was a payment made by a member of the assessee, as a consideration for being permitted to make an additional utilization of the FSI on the plot allotted by the assessee. The assessee which looked after the infrastructure, required the payment of the premium in order to defray the additional burden that must be cast as a result of the utilization of the FSI. The point, however, was that there was a complete mutuality between the assessee and its members. See Jai Hind CHS Ltd.[2012 (10) TMI 527 - BOMBAY HIGH COURT ]. Thus merit in the order of lower authorities taxing the contribution towards special development funds (for giving NOC) as liable to tax - Decided in favour of assessee. Taxing land premium on transfer in excess - Held that:- This issue is also covered by the decision of Hon’ble Bombay High Court in the case of Sind Cooperative Housing Society, [2009 (7) TMI 15 - BOMBAY HIGH COURT] as held Payments were made under the bye-laws of the assessee which constituted a contract between the assessee and its members which was voluntarily entered into and voluntarily conducted as a matter of convenience and discipline for running of the assessee-society. If any amount was received more than was chargeable under the bye-laws or the Government notification, the assessee was bound to repay the amount and if it retained the amount it would be in the nature of profit making that specific amount exigible to tax. Under the bye-laws, charging of transfer fees had no element of trading or commerciality. Since there was no taint of commerciality the question of earning profits would not arise when the assessee from the funds received applied the moneys received towards maintenance of the society and providing the members with usual privileges, advantages and conveniences. Thus, the principle of mutuality was applicable to the assessee which had as its predominant activity, the maintenance of the property of the society which included its buildings) and as long as there was no taint of commerciality, trade or business, the receipt of transfer fees was not liable to tax - Decided in favour of assessee.
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