TMI Blog2012 (9) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... the case depends upon the comparison of bye-laws of both the societies. As this aspect has not been looked into, we want to remit back the matter to the file of the A.O. Taxability of income from sale of scrap, garage rent and car parking - assessee contended non-taxability on ground of Principles of mutuality - Held that:- Amount in question is covered by principles of mutuality. If amount is used for the benefit of the members of the Society, it is entitled to have benefit of principle of ‘mutuality’ - Decided in favor of assessee - ITA No. 4370/Mum/2011 - - - Dated:- 13-6-2012 - SHRI D. MANMOHAN, AND SHRI RAJENDRA, JJ. Assessee by : Shri D.C. Jain Revenue by : Shri P.C. Maurya ORDER PER RAJENDRA, A.M. Challenging the order dt. 28-01-2011 of the CIT(A)-27, Mumbai, appellant filed the following Grounds of Appeal: i) Under the facts and circumstances and in Law the learned Commissioner of Income Tax (Appeals) erred in confirming the order of the learned Assessing Officer, treating the income from rent letting out the portion of the building to outsider amounting to Rs. 12,28,237/- as income from other sources instead of Income from House Property and ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Year. 3. Authorised Representative (AR) of the appellant society submitted that the income received from the BPL Mobile and Tata Tele Service Ltd., was income from the House Property, that appellant was entitled to 24(a) deductions, that in earlier year, matter was decided in favour of the appellant society. He relied upon the order of the ITAT dt. 21-12-2011 (ITA/6102/Mum/2009) besides relying upon the order of the Bajaj Bhawan s Owners Premises Co-Op Society Ltd., delivered by the Hon ble Bombay High Court. The first matter is related to appellant society itself and pertains to A.Y. 2003-04. G Bench of the ITAT, Mumbai in the said order has decided the issue in favour of the appellant in the following words: Ground Nos 1 2 regarding Income from leasing out the terrace as income from other sources instead of admitted by the assessee as income from house property. The assessee entered into an agreement of lease and license with BPL Mobile Communications Ltd, permitting the latter to use and occupy 200 sq.ft of its terrace for the purpose of installation of antenna, microwave tower etc. The assessee was to receive license fee of Rs.10,000/- per month in advance and also t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct the tower on their terrace in consideration of an amount of Rs.5,93,700/- and claimed as income from house property subject to deduction under section 24 of the Act. However, the Assessing Officer while observing that the assessee s society has not provided any house property to the company and it is only the open terrace which has been let out, treated the same as assessable under the head income from other sources without allowing any expenditure in this regard. On appeal, the learned CIT(A) while confirming the Assessing Officer s action treating the income from other sources directed the Assessing Officer to allow 20% of the gross receipts as expenses to earn such income. The Tribunal, after considering rival submissions, at Pages-17 18, Para-39, held as follows:- 39. After carefully hearing the submissions of the rival parties and perusing the material available on record, we find that the facts are not in dispute. We further find that in the case of Sharda Chamber Premises v/s ITO, in ITA No.1234/Mum./2008, dated 1.9.2009, forA.Y. 2003-04, in which JM was one of the party, on the similar facts, the Tribunal after considering the decision in ITO v/s Cuffe Parade Sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been filed by the Revenue in view of the smallness of the tax effect. However, the counsel for the revenue is not in a position to point out any error in the orders passed by the ITAT. In this view of the matter, we see no reason to entertain the appeal on question (c). In the result, the appeal is dismissed with no order as to costs. Keeping in view of the aforesaid binding judgment of the Hon ble Jurisdictional High Court, we set aside the impugned order passed by the Commissioner (Appeals) and allow this ground raised by the assessee directing the Assessing Officer to assess the income in question under the head income from house property. Respectfully following the decision of the coordinate Bench of the Tribunal, we decide this issue in favour of the assessee and against the revenue . In Bhawan s owners premises matter one of the questions was Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in directing the assessing officer to assess the rental income of Rs. 11,41,783/- for letting out the terrace under the head income from house property subject to deduction u/s. 24 . Dismissing the appeal filed by the Revenue, Hon bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n excess of the amount fixed by the Bye-laws. Further, receipts are from the transferees. Thus, all receipts are on account of charges levied by the assessee society in violation of the provisions of the Bye-laws of the co-operative societies. The assessee society had laid down a condition for allowing transfer of premises in its building that the outgoing member and / or the incoming member should contribute to the corpus created by the society for repair fund. Thus, it is clear that the payments were not voluntary. Payments which are made voluntarily will not be covered by the principles of mutuality. The facts show that the assessee society had charged the transfer premium with the objective of earning profit. It was for this reason that the premium was charged at a rate, which is far in excess of the amount permitted by the Bye-laws. The assessee has no explanation as to why it is charging the transfer premium at a such high rate, if it is not done with the profit motive. The Hon ble ITAT, Mumbai, in the case of Walkeshwar Triveni Co-operative Housing Society Ltd., has held that if amounts exceeding the limit prescribed under the Rules are charged- be it donation or payment und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansferee being admitted. Merely because the amount may be appropriated earlier, it would not lose the character of the amount being paid by a member. In these circumstances, the identity of the contributor and beneficiary being satisfied and considering the provisions of the Maharashtra Co-operative Societies Act and the Rules framed there under, surplus could be disposed of only in favour of the members or for the objects which they might specify. The contribution to common amenity fund/repairs and welfare fund being the first contribution made by the existing/new member was not taxable. 5.5 From the said judgment, it is clear that by-laws of the Mittal Court Premises CHS. Ltd., had allowed collection charges @ Rs. 100/- per Sq. Ft., or at a rate to be fixed by the general body meeting which ever was higher. The appellant has not filed copy of bye-laws before us. It is also not known whether same was filed before the lower authorities or not? Principle enumerated in the judgment of Mittal Court Premises CHS. Ltd., are applicable to the facts of the case or not depends upon the comparison of bye-laws of both the societies. As this aspect has not been looked into, we want to remi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
