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11. ITO v. Grand Paradi CHS
Ltd.
ITAT ‘G’ Bench, Mumbai
Before D. K. Agarwal (JM)
and
A. L. Gehlot (AM)
ITA No. 521/Mum./ 2010
A.Y. : 2005-06. Decided on :
27-8-2010
Counsel for revenue/assessee
: A. K. Nayak/Dharmesh Shah
S. 2(24) of the Income-tax
Act, 1961 — Income — Whether the receipts of non-occupancy charges, transfer
fees and voluntary contribution from its members by the cooperative housing
society is taxable — Held, No.
Per D. K. Agarwal :
Facts :
The assessee was a
co-operative housing society. During the year under appeal, it had shown
following receipts in its accounts which is the subject matter of dispute :
(i) Non-occupancy
charges (sub letting charges) — Rs.13.24 lakh;
(ii) Transfer fees of
Rs.1.95 lakh;
(iii) Voluntary
contribution (Donation) from outgoing members and incoming members Rs. 54.52
lakh;
The assessee contended that
all the above three receipts were exempt from tax on the principle of mutuality.
However, the AO, following the decisions of the Bombay High Court in the case of
Presidency Co-op. Housing Society Ltd. (216 ITR 321) taxed the above receipts.
On appeal, the CIT(A) relying on the decisions of the Bombay High Court in the
cases of Shyam Co-op. Housing Society Ltd. (ITA Nos. 92, 93 and 206, dated
17-7-2009) and Su Prabhat
Co-op. Housing Society Ltd. v. ITO, (ITA No. 1972 of 2009, dated 1-10-2009),
allowed the appeal of the assessee.
The Revenue challenged the
order of the CIT(A) before the Tribunal on the ground that the two decisions
relied on by the CIT(A) have not been accepted by the Department and the same is
challenged before the higher authority. Thus, according to it, the matter was
sub-judice.
Held :
As regards non-occupancy
charges — the Tribunal relying on the decision of the Bombay High Court in the
cases of Su Prabhat Co-op. Housing Society Ltd. upheld the order of the CIT(A).
With regard to transfer fee and voluntary contribution — it agreed with the
assessee and held that its case was covered in favour of the assessee by the
decision of the Bombay High Court in the case of Sind Co-op. Housing Society
Ltd. v. ITO, (317 ITR 47).
According to the Tribunal, the decision of
the Bombay High Court in the case of Presidency Co-op. Housing Society Ltd.
relied on by the Revenue, had been distinguished by the Bombay High Court in the
case of Sind Co-op. Housing Society Ltd. Further, it observed that the Revenue
was not able to show any other contrary decisions. As regards the Revenue’s
contention about the non-acceptance of the Bombay High Court decisions, since
the same have been challenged, the Tribunal based on the Bombay High Court
decision in the case of Bank of Baroda v. H. C. Srivastava and another, (256 ITR
385) held that the ground taken by the Revenue was devoid of any merit and
accordingly, the same was rejected.
