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Income Tax Appellate Tribunal, “SMC” Bench, Mumbai
Before: Shri B.R. Baskaran (AM)
The appeal filed by the Revenue is directed against the order dated 24.1.2017 passed by the learned CIT(A)-29, Mumbai and it relates to A.Y. 2013-14. The solitary issue urged in this appeal is whether the learned CIT(A) was justified in holding that non-occupancy charges and transfer premium received by assessee is exempt under the principle of mutuality.
I heard the parties and perused the record. Learned counsel appearing for the assessee submitted that identical issues came before the Tribunal in assessee’s own case in various assessment years and Hon'ble Tribunal has held that principle of mutuality should be applied to the impugned receipts. Learned AR further submitted that the learned CIT(A) has followed the decision rendered by the Division Bench of the Tribunal in relating to A.Y. 2009-10, wherein the Tribunal had followed the decision rendered by it in assessee’s own case in ITA No. 6866/Mum/2007 relating to A.Y. 2004-5. Accordingly, he submitted that the order passed by the learned CIT(A) should be upheld.
2 Lands End CHS Ltd.
I heard learned Departmental Representative and perused the record. I noticed that the learned CIT(A) has followed the decision rendered by the Division Bench of Mumbai in assessee’s own case for A.Y. 2009-10. For the sake of convenience, I extract below the operative portion of the order passed by the learned CIT(A) :-
4.3 The submissions of learned counsel have been considered carefully. This issue has come up in the appelant’s own case for the A.Ys. 2003-04, 2004-05 and 2009-10 wherein the Hon'ble ITAT has decided the issue in favour of the assessee. While deciding the issue for A.Y. 2009-10, the Hon'ble ITAT has held as under :-
2.2. We have considered the rival submissions and perused the material on record. We note that identical issue has been decided in favour of assessee in it its own case in Assessment year 2004-05 vide order dated 27/09/2013.The relevant paragraphs 3 & 4 of the said order are reproduced as under:-
“We have heard the Ld. AR as well as Ld. DR and considered the relevant material on record. The ld. AR has pointed out that an identical issue has been considered and decided by this Tribunal in assessee’s own case for the assessment year 2003-04 vide order dated 10.01.2011 in ITA No.6066/M/2006. Thus, the ld. AR has submitted that this issue is covered in favour of the assessee. The ld. DR has relied upon the orders of the authorities below. The AO made the addition with respect to the amount received by the assessee towards transfer fee of Rs.500/- from outgoing members, entrance fee for Rs.100/- from incoming members, share premium and contribution to common amenities fund. The CIT(A) deleted the transfer fee of Rs.500/- each on the principles of mutuality but confirm the addition towards the receipt of entrance fee of Rs.100/- each and the reipts of contribution to coomon amenities fund total amounting to Rs.17,01,200/- . This tribunal in assesseee’s own 5 Lands End Co-operative Housing Society Ltd Vs. I.T.O. case for the assessment year 2003-04 has considered and adjudicated the issue of contribution to common amenities in para 4 as under:
“We have carefully considered the rival submissions and perused the record. Case of the asessee is that though the amount was received in the form of contribution to common amenities fund it is essentially utilized for the benefit of common members and thus principles of mutuality are attracted. Facts not being in dispute, in the light of the 3 Lands End CHS Ltd. decision of the ITAT (supra), we accept the plea of the assessee and hold that the impugned amount received in the form of contribution to common amenities fund is exempt from tax since principles of mutuality applied to the instant receipts. Under the circumstances, appeal filed by the assessee is allowed. Pronounced accordingly in the open court on the date of hearing i.e. on 10.1.2011.”
In view of the earlier order of this Tribunal the amount of Rs.16,50,000/- towards common amenities fund is not taxable on the principle of mutuality as decided by this Tribunal is the assessee’s own case. As regards the receipt towards share premium and entrance fee from incoming members if the said amount is received for the prupose of utilizing for the common amenities of the society then the same falls under the category of the contribution of common amenities fund and the concept of mutuality will be applicable. Accordingly, the AO to verify the same and then decide as per our observation.”
We also find that Jurisdictional High Court in the case of CIT v/s Darbhanga Mansion CHS Ltd in vide order dated 18-12-2014 has decided a similar issue on identical facts in favour of the society. We, therefore, respectfully following the above decision, delete the addition of Rs. 11,00,000/- by allowing the appeal of the assessee on this point. The AO is directed accordingly.”
4.3.1 This issue has came up in the appellant’s own case for A.Y. 2012- 13 as well which had been decided by my predecessor CIT(A) in favour of the appellant.
4.3.2 Respectfully following the orders of the jurisdictional High Court and ITAT and my predecessor’s order for A.Y. 2012-13, this issue is decided in favour of the appellant. This ground of the appeal is allowed.”
Since the learned CIT(A) has followed the decision rendered by the Division Bench of ITAT in assessee’s own case, I do not find any infirmity in the order passed by the learned CIT(A). Accordingly, I uphold the same.
4 Lands End CHS Ltd.
In the result, the appeal filed by the Revenue is dismissed.
Order has been pronounced in the Court on 8.6.2017.