VILE PARLE PRARTHANA CO-OP.HSG. SOC.LIMITED,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX -25(3), MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL
‘F’ BENCH, MUMBAI
BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER
&
SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER
Vile Parle Prarthana CHS Ltd.,
19, TPS, Prarthana Samaj Road
Vile Parle (E), Mumbai – 400057
Maharashtra
Vs. ACIT – 25(3)
Mumbai, Maharashtra
PAN/GIR No.AAAAV0984F
(Appellant)
..
(Respondent)
Assessee Represented by Shri Vimal Punmiya
Revenue Represented by Smt. Kavita P. Kaushik, Sr.AR
Date of Conclusion of Hearing 30.04.2025
Date of Pronouncement
20.05.2025
आदेश / O R D E R
PER AMIT SHUKLA (JM):
These aforesaid appeals are filed by the assessee against separate orders dated 10.01.2018, passed by Ld. Commissioner of Income Tax-37, Mumbai (hereinafter in short “ld. CIT(A)”) for the quantum assessment passed u/s.143(3) of the Income Tax
Act, 1961 (in short “Act”) for the A.Y. 2012-13 & A.Y. 2014-15. ITA Nos.1409 & 1411/Mum/2018
Vile Parle Prarthana CHS Ltd.,
2
2. Earlier in this case, the Tribunal has passed the order on 24.09.2019. However, on one ground the order has been recalled vide order dated 01.06.2021 in MA. Nos. 91 & 92/MUM/2020. Accordingly the only ground needs to be adjudicated in A.Y.
2012-13 and A.Y. 2014-15, which is with regard to Mesne Profits of Rs. 2,00,00,000/- which has been treated as capital receipt by the assessee in A.Y.2012-13; and Rs.39,23,278/- in A.Y.
2014-15 which ld. AO has held to be revenue receipts chargeable to tax.
3. Brief facts qua the issue involved are that assessee is a cooperative housing society located in Vile Parle, Mumbai and has been deriving rental income from commercial premises on the ground floor and partly in the basement. The background and the various events leading to determination of Mesne Profit are discussed as under: - i.
The Society building was constructed between 1982 and 1984
and it was occupied from 1.1.1985. The Central Bank of India
(Bank, for short), had advanced a loan to the Society and also taken on rent commercial premises consisting of ground floor and basement, admeasuring 4100 sq.ft and 2000 sq.ft, respectively. The lease rent initially for ten years was Rs.6 per sq.ft per month. As per the finance agreement with the Bank, as long as the loan was outstanding, the lease could not be terminated. The loan, along with the interest was fully paid in 2001. ii.
Although the going market rate of rent in the area was close to Rs. 100 per sq.ft per month in 2002, the Bank continued to pay
ITA Nos.1409 & 1411/Mum/2018
Vile Parle Prarthana CHS Ltd.,
3
only the old rent at the rate of Rs.6 per sq.ft per month till 2005, in spite of continuous efforts by the Society to revise the rent.
iii.
In December 2006, the Society issued a legal notice to the Bank for vacating the premises. The statutory period of one month from such notice expired on 8.1.2007. However, the Bank continued to occupy the premises paying only the old rent till
30.11.2008. iv.
In February, 2007, the Society initiated legal proceedings against the Bank for getting the premises vacated and recovery of mesne profits for the period of illegal occupation by the Bank after 8.1.2007. These legal proceedings involved Small Causes
Court at Bandra, Appeal Court at Bandra, Bombay High Court and even the Supreme Court. Finally in September, 2008, the Bank signed consent terms with the Society before the High
Court of Bombay, agreeing to vacate the premises on 30.11.2008. On 30.11.2008, the Bank finally vacated the premises.
v.
In 2008, the society filed application before the Bandra Small
Causes Court for determination and recovery of mesne profits for the period from 9.1.2007 to 30.11.2008. In October, 2010,
Bandra Small Causes Court issued a decree against the Bank to pay mesne profits to the Society at the rate of Rs.200 per sq.ft per month, together with interest at the rate of 6% per annum from 9.1.2007 till 30.11.2008. This decree was not appealed against by the Bank during 90 days period allowed for appeal.
On 31.3.2011, the Bandra Court