TMI Blog2011 (6) TMI 822X X X X Extracts X X X X X X X X Extracts X X X X ..... se and in law, the ld. CIT(A) has erred in deleting premium on transfer fees of ₹ 13,46,660/- TDR premium received of ₹ 10,80,000/- relying on the decision of the Mumbai High Court in the case of sind Co-op Hsg. Soc. (2009) 26 DTR (Bom) 149. 2.(i) In doing so, the ld. CIT(A) has erred in ignoring certain paras of the above cited judgement wherein it is categorically stated that this case law would pertain to the assessment years prior to Notification dated 09-08-2001 of Govt. of Maharashtra for Co-op. Hsg. Societies. (ii) In the instant case, the assessment year in question pertains to period after the Notification dated 09.08.2001 of Govt. of Maharashtra for C.H.S.. By ignoring this point, the ld. CIT(A) has faile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Society vs. ITO 317 ITR 47(Bom). 4. In the case of Sind Co-operative Housing Sciety Vs. Income-tax Officer 317 ITR 47 (Bom), the facts were that the assessee, a co-operative housing society, was registered with the object principally of looking after the property including building(s) thereon. The bye-laws of the assessee permitted it to charge a transfer fee in terms of the notification issued by the Government of Maharashtra. Bye-law 38(3)(ix) provided that the assessee can charge transfer fee and the members by adopting the bye-laws agreed, amongst themselves, that a fee for transfer of flat/-tenement when it was sold would be paid to the assessee. Both the incoming or the outgoing member had to contribute to the common fund of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee was bound to repay the amount and if it retained the amount it would be in the nature of profit making that specific amount exigible to tax. Under the bye-laws, charging of transfer fees had no element of trading or commerciality. Since there was no taint of commerciality the question of earning profits would not arise when the assessee from the funds received applied the moneys received towards maintenance of the society and providing the members with usual privileges, advantages and conveniences. Thus, the principle of mutuality was applicable to the assessee which had as its predominant activity, the maintenance of the property of the society which included its building(s) and as long as there was no taint of commerciality, trad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utuality would not cease on account of these aspect. At the highest, authorities under the Co-operative Societies Act and Rules if any action is taken may direct an additional amount to be refunded. In our opinion, therefore, contribution by way of non occupancy charges, principle of mutuality would apply and consequently, In view of the above decisions, we do not find any merits in these appeals regarding the grievance of the revenue that transfer fees are chargeable to tax. 6. As far as TDR premium received by the assessee is concerned, it is seen that whenever a member of the society wants to develop his plot, the member is required to submit the construction plan to the assessee society. He has also to pay premium to the societ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the same members. Therefore, there can be no question of force or compulsion involved in observing these rules. It has been held in the case laws cited by the appellant that the main test of mutuality is that there is complete identity of the contributors with the recipients. If a mutual concern receives any income, the surplus of which goes back to the contributors, the income remains in reality the income of the contributors. In so far as the TDR payments are concerned, there is no change in the membership of the Cooperative Society as a result of this purchase of additional FSI and hence there is complete identity with the contributor and the recipient. Therefore, the amount received by the appellant on account of the TDR premium ..... X X X X Extracts X X X X X X X X Extracts X X X X
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