TMI Blog2012 (9) TMI 997X X X X Extracts X X X X X X X X Extracts X X X X ..... towards common amenities, whereas the appellant has claimed the3 same as exempt on the principle of mutuality. 2.1 The Assessing Officer has noticed that the assessee received a sum of ₹ 30,75,000/- on account of transfer fees from the outgoing members. The transfer fees includes ₹ 29 lacs received as voluntary contribution ranging from ₹ 1 lac to ₹ 3 lacs from 7 members and ₹ 1,75,000/- received as transfer fee @ ₹ 25,000/- each from these members. The Assessing Officer accordingly disallowed ₹ 29 lacs received as voluntary contribution and held to be not exempt from tax. 2.2 On appeal, the Commissioner of Income Tax(Appeals) has confirmed the disallowance made by the Assessing Officer. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... With regard to the transfer fee and voluntary contribution we find merit in the plea of the Id. Counsel for the assessee that the issue stands covered in favour of the assessee by the decision of the Hon ble Jurisdictional High Court in Sind Co-operative Housing Society vs. ITO (2009) 317 ITR 47 (Born.) wherein it has been held (at placitum 44 to 46 at page 62,63 of the ITR) as under: Let us now apply the various tests which are to be considered for applying the principle of mutuality to a case of a co-operative housing society based on our earlier discussion. (1) Is there any commerciality involved. This has to be found from the bye-laws of the cooperative housing cooperative society. In the case of the co-operative housing soci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s only the members who have a right to share in the surplus. Under the Maharashtra Cooperative Societies Act, no part of the funds, as provided in section 64 can be paid by way of bonus or dividend or otherwise distributed among its members except as provided therein. Under section 67, there is a limit on the dividend to be paid on liquidation. Under section 110 of the Maharashtra Cooperative Societies Act, the surplus can only be dealt with in the manner provided therein which includes any member or devoted to objects provided by the bye-laws or be transferred to another society with similar object. Rule 90 of the Rules provide how the surplus is to be divided. The surplus thus can be distributed in terms of the bye-laws to members and/or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t dated 17th July, 2009 In Income Tax Appeal No.93 1 of 2004 in the case of Sind Coop. Hsg. Soc. Versus The Income Tax Officer, we have held that both contributions by the outgoing and incoming members are subject to principle of mutuality. We have also discussed the effect of the Government Circular dated 27.11.1989 and 20.12.1989. In the light of that, the question has to be answered in the affirmative in favour of the assessee and against the revenue. 11. Similar view was taken by Their Lordships in Su Prabhat Cooperative Housing Society Ltd. vs. ITO in Income tax appeal No.1972 of 2009 wherein on the questions of law 1) Whether on the facts and circumstances of the case the appellate Tribunal was right in coming to the conclusion ..... X X X X Extracts X X X X X X X X Extracts X X X X
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