TMI Blog2016 (3) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... as transfer fees but amounts to sharing of the actual expenditure incurred for renovation work and hence it cannot be said to be in violation of the conditions prescribed in the bye-laws. In effect the Assessing Officer as well as the Commissioner of Income-tax (Appeals) admitted that the assessee-society is governed by the principle of mutuality and it is not carrying on any business. Such being the case it cannot be said, for the limited purpose of the claim of carry forward depreciation, that it was engaged in any business. Under these circumstances, of the view that the learned Commissioner of Income-tax (Appeals) was not justified in setting aside the matter for fresh consideration - Decided in favour of revenue - I. T. A. No. 736 /Mum/ 2015 (assessment year 2005-06). - - - Dated:- 23-9-2015 - D. MANMOHAN (Vice-President) Vishwas Jadhav for the appellant. Jalpesh Vora for the respondent. ORDER 1. D. Manmohan (Vice-President).-This appeal by the Revenue is directed against the order passed by the Commissioner of Income-tax (Appeals)-30, Mumbai and it pertains to the assessment year 2005-06. 2. The following grounds were urged before the Tribunal : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional amount shall be recovered from the transferor or transferee. He also observed that the transfer premium may be termed as contribution towards building funds, repair funds, etc., but the nomenclature of the receipt cannot hide the substance of the transaction since the society collected more than ₹ 25,000 towards transfer premium in violation of the by-laws of the co-operative society, which is covered under the principle of mutuality and therefore brought to tax a sum of ₹ 13,00,000. He also observed that the assessee had given a note below the computation of income that current year depreciation of ₹ 11,40,199 to be carried forward to subsequent year whereas by virtue of the provision of section 32(1) of the Act depreciation is admissible only where the assets are owned and used for the purpose of business or profession. In the present case charges collected by the society from its members and expenses incurred are covered under the principle of mutuality and the assessee-society is not doing any business activity. Therefore the assessee is not entitled to carry forward and set off of unabsorbed depreciation. 4. The Assessing Officer also noticed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of mutuality in the light of the decision of the hon'ble Bombay High Court in the case of Sind Co-operative Housing Society v. ITO [2009] 317 ITR 47 (Bom) as well as the decision of the Income-tax Appellate Tribunal, Mumbai Benches in the case of Somerset Place Co-operative Housing Society (I. T. A. No. 5986/Mum/2011 dated January 11, 2013). He also observed that the facts of the assessee's case are in pari materia with the facts in the above two decisions and therefore by following the aforecited decisions the issue was decided in favour of the assessee. In other words, the learned Commissioner of Income-tax (Appeals) held that the amount of ₹ 13,00,000 received by the society from the outgoing members is covered by the principle of mutuality and it is not in violation of the conditions set out in the bye-laws. As regards disallowance of 10 per cent. expenditure on ad hoc basis the learned Commissioner of Income-tax (Appeals) observed that the Assessing Officer was justified in making the disallowance since the burden is upon the assessee to prove that the expenditure was actually incurred. It may be noticed that the assessee has not preferred any cross appeal in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that it has nothing to do with the transfer fees but it is the actual expenditure connected with maintenance of the building. 12. I have carefully considered the rival submissions. This is an appeal by the Revenue and it is for the Revenue to prove that the case law relied upon by the Commissioner of Income-tax (Appeals) is not applicable to the facts of the instant case. The learned Departmental representative has neither filed any paper book nor relied upon any case law to contradict the findings of the learned Commissioner of Income-tax (Appeals). In fact, he has not even placed before the Bench a copy of the order of the Income-tax Appellate Tribunal, Mumbai Bench on which reliance was placed by the learned Commissioner of Income-tax (Appeals). Under these circumstances, I am of the view that the order passed by the learned Commissioner of Income-tax (Appeals) does not call for any interference and therefore ground No. 1 of the Revenue is hereby dismissed. 13. As regards ground No. 2, the case of the Revenue is that the assessee, being a mutual benefit society, is not engaged in any business in which event it cannot claim depreciation. Learned counsel for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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