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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI MAHAVIR SINGH, JM & SHRI RAJESH KUMAR, AM
O R D E R PER RAJESH KUMAR, A. M: This appeal by the Assessee is directed against the order dated 28.7.2006 of Commissioner of Income Tax (Appeals)- 25, Mumbai (Hereinafter called as the CIT(A) for assessment year 2003-04. 2. The brief facts of the case are that the various grounds raised
in this appeal were decided vide order dated 16.09.2008 passed by the Mumbai Bench of the Tribunal in ITA No.5527/Mum/2006. Thereafter vide miscellaneous application No.586/M/2012 dated 11.09.2012 decision rendered on the ground no. 2 of the present appeal i.e was sought to be 2 rectified and amended as it contained an apparent mistake which had arisen because of decision of the Jurisdictional High Court rendered in the case of Sind Co-operative housing Society reversing the decision of the Mumbai Special Bench in the case of Walkeshwar Triveni Co-op.Housing Soceity Ltd by which the issue of taxability of transfer fee received on transfer of flat from the transferor was decided and held to be non taxable receipt on the principle of mutuality.
3. The relevant finding of the Tribunal in the order passed in the miscellaneous application no 586/M/2012 is reproduced below:
“2. We have heard the Ld. A.R as well as Ld. D.R and considered the relevant material on record. The Ld. A.R of the assessee has submitted that while deciding the ground no. 6 regarding transfer fee received by the assessee from transferees, the Tribunal has followed the decision of Special Bench in case of Walkeshwar Triveni Co-operative Housing Society Ltd. Vs ITO 88 ITD 159 (Mum) (SB). The said decision of the Special Bench has been reversed by the Hon'ble Jurisdictional High Court in the case of Sind Co-operative Housing Society Ltd. Vs ITO 317 ITR 47 there is a mistake apparent in the order of this Tribunal with respect to the finding of ground no. 6 in para 14 to 16 of the impugned order which has to be rectified u/s 254(2). He has further pointed out that for the assessment year 2001-02 the Tribunal has already recall the order on view of the decision of Hon'ble Jurisdictional High Court in case of Sind Co- operative Housing Society Ltd. Vs ITO (supra). On the other hand, the Ld. D.R has relied upon the impugned order of the Tribunal.
Having considered the rival submissions and carefully perused the relevant record we note that for the assessment year 2001-02 the assessee filed a Miscellaneous Application no. 123/2011 which has been allowed by the Tribunal vide order dated 27.7.2011 as under: "2. After hearing the rival contentions, we find that the Tribunal, in the impugned order, vide ground no.2, Paras-6 & 7, which relates to addition in respect of income from transfer fees received from the transferors, prior 3 to their admission as members of the society, has followed the decision of Mumbai Special Bench reported as Walkeshwar Triveni Co. Operative Housing Society Ltd. v/s ITO, (2004) 88 lTD (SB) 159 (Mum.), and decided the issue of taxability of transfer fee received by the society, against the assessee. The Hon'ble Jurisdictional High Court in Sind Co. Operative Housing Society v/s ITO, (2009) 317 ITR 47 (Bom.), reversed the decision of Mumbai Special Bench in Walkeshwar Triveni Co. Operative Housing Society Ltd. (supra) and decided the issue in favour of the assessee. Consequently, we hold that there is a mistake apparent on record in the impugned order dated 27th September 2007 and, hence, we proceed to rectify the same by following the judgment of Hon'ble Jurisdictional High Court in Sind Co. Operative Housing Society (supra) and allow ground no.2 raised by the assessee, as it is well settled that a subsequent judgment rendered by a Jurisdictional High Court on the issue, can constitute an error apparent on record. We rely on the judgment of the Hon'ble Supreme Court in ACIT v/s Saurashtra Kutch Stock Exchange Ltd., (2008) 305 ITR 227 (SC)."
Thus, it is clear that an identical issue has been considered in the Miscellaneous Application by the Tribunal and the order of the Tribunal dated 27.9.2007 was recalled. Following the earlier order as reproduced above we recall the order dated 16.9.2008 of this Tribunal for the assessment year 2003-04 to the extent of ground no. 6 for considering the same afresh in the light of the decision of Hon'ble Jurisdictional High Court in case of Sind Co-operative Housing Society Ltd. Vs ITO (supra) as well as other relevant decision on the point. The registry is directed to fix the appeal of the assessee for fresh hearing on the ground no. 6 regarding taxability of transfer fee received from the transferees. Notice be issue to the party.”
4. Even the in the earlier year in the assessee’s own case the issue stood decided in favour of the assessee in AY 2000-01 vide order dated 24th January, 2011. The para no 3 of the said order is extracted as under:- “3. The second ground is against the addition of Rs.10,10,000/- as income from transfer fees. It is stated that these are voluntary contributions received from the members at the time of transfer of the flat. It is stated that the contributions have been made towards common amenities and contingency found to be used wholly and exclusively for the benefit of the 4 members. The transfer fees have been received from the transferors of two flats during the relevant previous year. The question whether such transfer fees can be assessed in the hands of the housing society or should be allowed exemption on the principle of mutuality has been decided in favour of the assessee by the judgement of the Hon'ble Bombay High Court in the case of Sind Co-operative Housing Society Vs. ITO (2009) 317 ITR 47. There are several orders of the Mumbai Benches of the Tribunal which have followed the aforesaid judgement and decided the issue in favour of the concerned assessees. A list of such orders has been given by the assessee in the form of a chart and the copies of such orders have also been filed. Respectfully following the judgement of the Hon'ble jurisdictional High Court and consistent with the view taken by the Mumbai Benches of the Tribunal, we direct the Assessing Officer to exclude the amount of Rs.10,10,000/- from the assessment. The ground is allowed.”
Therefore respectfully following the decision of the jurisdictional High Court and also the consistent view taken by the Mumbai Benches of the Tribunal, We direct the AO to delete the addition of transfer fee from the assessment.
In result, the ground no 2 of the assessee is allowed.
In the result, assessee’s appeal is allowed.
Order pronounced in the open court on 17th May,2016 sd (MAHAVIR SINGH) (RAJESH KUMAR) न्मायमक सदस्म / Judicial Member रेखा सदस्म / Accountant Member भुंफई Mumbai; ददनांक Dated : 17.5.2016 SRL:
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