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2014 (6) TMI 321 - AT - Income TaxTaxability of transfer fee receipts – Principles of mutuality – Held that:- Mittal Court Premises Co-operative Society Ltd. Versus Income-tax Officer [2009 (7) TMI 689 - BOMBAY HIGH COURT] - the principle of mutuality would not cease on account of charging of excess amount - the clarification issued by Govt. of Maharashtra now also states that for Cooperative societies it was mandatory to adopt the new model bye laws w.e.f 13/3/2009 only - it was not mandatory for appellant to adopt model bye laws nor was any ceiling placed in the original bye laws of the appellant society - Payments were made under the bye laws of the society which constituted a contract between society and its members and if any amount was received more than what was chargeable under the bye laws, then only the principle of mutuality would be lost - it cannot be said that the appellant society violated the model bye laws in the previous year relevant to AY 2004-05 by not adopting the new model bye laws and not amending the bye laws restricting the amount of transfer fee which could be charged by the society. The limit of Rs.25,000/ - as per notification dated 9/8/2001 is applicable to all kinds of cooperative societies including the plot owner society also - the new model bye laws became mandatory w,e.f 13/3/2009 only till 13/3/2009 it will not lead to any violation of principles of mutuality or any law of govt. until the society has amended its bye laws and placed restriction clauses in its bye laws limiting the transfer fee prior to 13/3/2009 - a member is not prohibited from gifting any amount to the society for the objects of the society - the principle of mutuality would not cease on account of those aspects - authorities under the Co-operative Societies Act and Rules, if any action is taken, may direct an additional amount to be refunded. The principle of mutuality shall apply to Society on facts and circumstances of the case even if the notification was held to be applicable for plot owner's society and accordingly the addition of transfer fees as income from other sources is not sustainable - the FAA has considered the issue in detail – thus, there is no reason to interfere in the order – Decided against Revenue.
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