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2011 (9) TMI 803 - HC - Income TaxPrinciple of mutuality - income derived from deposits from the shareholders towards the value of the floor area allotted to them proportionately and other deposits - assessee contesting it to be exempt from tax on ground of principle of mutuality - Held that:- In order to constitute mutuality what is required to be proved is identity between contributor and the beneficiary, absence of private motive and principle that when a property is held by the members, they cannot be said to earn profit on their own property and whatever the income that is received by the Society or the Company would be shared by the members of the shareholders, and that there is no other beneficiary other than the contributors. In present case, occupants are given specific commercial apartment together with a perpetual, uninterrupted, absolute and exclusive right which makes clear that the profit motive is involved in the scheme prepared by the assessee for conferring title under the agreement as referred to above and the income that is derived by the company is not shared among the shareholders. Therefore, ITAT, first Appellate Authority and the AO were justified in holding that principle of mutuality cannot be invoked. Amount received towards transfer of units at terrace with lawn rights - business income or capital gain - Revenue contended that said units at terrace were not in the construction approved under the original scheme and which was also without the permission of the competent authority and in view of the above said facts constituted short term capital income - Held that:- Material on record would clearly show that rights of T1 and T2 and lawn area do not stand on the same footing as other shareholders in whose favour premises were allotted as construction T1 and T2 and lawn area, was not included in the original scheme and it was in favour of the Directors initially as a lease deed and thereafter it has been treated as perpetual lease deed. Therefore, same has to be treated as capital gains - Decided in favor of Revenue. Maintenance deposit - Held that:- AO and the appellate authority have referred to the submission made by the assesses before them to the effect that the surplus income from the said deposit shall also be shown as income from business and accordingly on the basis of the said submission order passed by Tribunal was not at all justified in deleting the income shown as income from business in respect of maintenance deposit - Decided in favor of Revenue.
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