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of <h1>Tribunal exempts common amenities fund, directs review of society expenses reimbursement</h1> <h3>The Income Tax Officer Ward 16 (2) (2), Mumbai Versus Malabar CHS Ltd</h3> The Tribunal upheld the CIT(A)'s decision to exempt the contribution towards common amenities fund and non-occupancy charges under the mutuality ... - Issues involved: Appeal against order of CIT(A) regarding addition on account of contribution towards common amenities fund, addition on account of non-occupancy charges, and addition to taxable income as reimbursement of expenses.Issue 1 - Contribution towards common amenities fund:- Facts: Assessee credited Rs. 33 lacs as contribution under 'common Amenities Fund' on transfer of flat, claimed as exempt under principle of mutuality.- AO's Decision: Held amount not exempt from tax.- CIT(A)'s Decision: Deleted addition based on Bombay High Court decision exempting transfer charges under mutuality principle.- Tribunal's Decision: Upheld CIT(A)'s decision, citing consistent view that mutuality principle applies to transfer fees by housing society.Issue 2 - Non-occupancy charges:- Facts: Society received Rs. 31,864 as non-occupancy charges, claimed as exempt under mutuality principle.- AO's Decision: Held amount not exempt under mutuality principle.- CIT(A)'s Decision: Deleted addition based on Tribunal decisions and jurisdictional High Court ruling.- Tribunal's Decision: Upheld CIT(A)'s decision citing jurisdictional High Court ruling supporting exemption under mutuality principle.Issue 3 - Reimbursement of expenses:- Facts: Society credited Rs. 91,850 as miscellaneous income, claimed as reimbursement of expenses.- AO's Decision: Held receipts not covered by mutuality concept, brought amount to tax.- CIT(A)'s Decision: Upheld AO's decision due to lack of evidence supporting exemption under mutuality principle.- Tribunal's Decision: Directed AO to allow opportunity for society to substantiate expenses incurred and prove voluntary payment by members, for fresh decision.Cross Objection:- Grounds 1 & 2: Challenge addition of Rs. 91,850 as income from other sources, seek allowance of expenses before taxing.- Tribunal's Decision: Directed AO to provide opportunity for society to submit evidence of expenses incurred, to decide afresh.- Ground 3: Seek allowance of expenses against exempt receipts.- Tribunal's Decision: Dismissed as alternate ground after dismissing revenue's appeal.Conclusion: Revenue's appeal dismissed, Cross Objection allowed for statistical purpose. Tribunal directed fresh assessment on reimbursement of expenses issue.
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