DEPUTY COMMISSIONER OFINCOME TAX -23(1), MUMBAI vs. LAXMI FINANCE AND LEASING COMPANY CO-OP. SOCIETY LTD, MUMBAI

ITA 4232/MUM/2023Status: DisposedITAT Mumbai29 August 2024AY 2014-1515 pages
AI SummaryN/A

What did the Tribunal hold?

The Tribunal dismissed the Revenue's appeal regarding transfer fees, upholding the CIT(A)'s decision that such fees are exempt based on the principle of mutuality and Supreme Court precedents. For the ALV on vacant properties, the Tribunal upheld the CIT(A)'s directive to compute ALV based on municipal rateable value, rejecting the Revenue's argument for fair rental value and confirming that Section 23(1)(c) does not apply where property was not let out at all. Both the Revenue's appeals and the assessee's cross-objections were dismissed.

What were the facts?

The assessee, a co-operative society, filed returns declaring income from house property (renting surplus office premises) and interest. The case primarily involved two disputes: the computation of Annual Letting Value (ALV) for let-out and vacant properties, where the AO adopted a higher ALV based on fair rent while the CIT(A) directed municipal rateable value for vacant properties; and the taxability of transfer fees received, which the AO added to income but the CIT(A) deleted based on the principle of mutuality.

What were the issues?

1. Proper determination of Annual Letting Value (ALV) for let-out and vacant properties under Section 23 of the Income Tax Act, 1961. 2. Taxability of transfer fees received by a co-operative society under the principle of mutuality.

Which sections of the Income-tax Act were involved?

Section 23(1)(a),Section 23(1)(b),Section 23(1)(c),Section 23(2)(a),Section 23(2)(b),Section 23(3)(a),Section 23(3)(c)

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Cases cited in this judgment(1)Show list

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  • 216 ITR 321
    216 ITR 321 · 1995 · HC
    5 citing

Heard together (2 matters)

ITA No.4232/Mum/2023
CO No.126/Mum/2024

Read from the judgment's own cause title. This page is filed under one of them.

Cause title — parties, addresses and appearances
2 ITA No.4232/Mum/2023 & others M/s. Laxmi Finance and Leasing Company Co-operative Society Ltd., Maharashtra-400 012 BKC, Bandra East Maharashtra-400 051 PAN/GIR No.AAAJL0006F (Appellant) (Respondent) CO No.126/Mum/2024 (Arising out of ITA No.4233/Mum/2023) (Assessment Year :2015-16) M/s. Laxmi Finance Vs. Deputy Commissioner of And Leasing Company Co-op Society Ltd. Laxmi Towres, Plot C-25 BKC, Bandra East Maharashtra-400 051 Income Tax-23(1) Room No.511, Fifth Floor, Piramal Chambers, Lalbaug Maharashtra-400 012 PAN/GIR No.AAAJL0006F (Appellant) (Respondent) Assessee by Shri Madhur Agrawal Revenue by Shri Manoj Kumar Sinha Date of Hearing 29/08/2024 Date of Pronouncement 29/08/2024

आदेश / O R DER PER BENCH: The aforesaid appeals have been filed by the Revenue and Cross Objections by the assessee against order dated 27/09/2023 passed by the learned CIT(A), National Faceless Appeal Centre, Delhi for A.Y.2014-15 & 2015-16. M/s. Laxmi Finance and Leasing Company Co-operative Society Ltd.,

2.

The appeal for the A.Y.2014-15 was taken as the lead case and the decision rendered thereon shall apply with equal force for A.Y.2015-16 also except with variance

The order continues below.

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