TaxTMI 
TaxTMI 
TaxTMI 
2015 (10) TMI 2251
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....ee has raised the following Grounds of appeal:- "(i) The Ld. CIT(A) has grossly erred in treating voluntary contributions received from Members as transfer fees ignoring the principle of mutuality. (ii) The Ld. CIT(A) has grossly erred in confirming the treatment of transfer fees as income of the assessee amounting to Rs. 5,85,075/- ignoring the principle of mutuality. (iii) The Ld. CIT(A) has erred in relying on the decision of Honorable ITAT, Mumbai in the case of Hatkesh Co-operative Housing Society Ltd in ITA No. 494 to 500/Mum/2011 dated 04.09.2013 which is squarely distinguishable to the facts of the assessee." 3. The appellant is a cooperative society, whose source of income was stated to be income from other sources. The Asse....
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....- received from Shri Dhiren C. Shah of flat no. 16 for the use of common passage outside his flat. As on date he is member of the society as principle of mutuality applies and income is not liable to tax. Copy of the society letter 29th October, 2009 enclosed. (v) On 26th November, 2009, Rs. 81,350/- received form Smt. Kailash D.C. Shah of flat no. 15 for the use of common passage outside her flat. As on date she is member of the society as principle of mutuality applies and income is not liable to tax. Copy of the society letter dated 29th October, 2009 enclosed." 4. The Assessing Officer rejected the contention of the assessee by citing following reasons:- "a) It s seen from the copies of Form 'I' Register of Members submitte....
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.... of flats from the old members and for admission as society members. f) The incoming members are also charged for alleged use of common area which in the normal case are also entitled to use as incoming member. In other words, amount charged for use of common area is device adopted to collect transfer fees in excess of prescribed limit. g) The principle of mutuality applies to those receipts which are regularly collected from all members on a uniform basis and all these collections have a direct nexus to the expenditure of the society on different heads and are borne equally by all members. However, the above receipts are on account of amount collected in guise of voluntary contribution towards common amenity fund of the society on thei....
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....ll be utilized for the benefit of the society. 7. The CIT(A) held that the income is in the form of transfer fee and thus the principle of mutuality does not apply in this case as the housing society by the very design and concept is not a mutual concern. The CIT(A) held that since the impugned sums are taken by the society under the compulsion to effect the transfer and it is not a voluntary and legal payment and hence there is an element of profit to effect the transfer and is taxable amount. Hence, the CIT(A) dismissed the appeal of the assessee. Aggrieved by the order of the CIT(A), the assessee society is in appeal before the Tribunal. 8. The assessee society stated that it is a cooperative group housing society and these amounts are....
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....0. I have considered the rival submissions, perused the material on record and case laws relied upon by the rival parties. It is observed that the assessee society has received contribution from incoming members who have purchased the flats in the society after they have become the members of the society and the said fund is credited to the common amenity fund which is stated by the society to be used for the purpose of heavy repairs and maintenance of the society as well for use of common passage. The said amount, as stated by the assessee-society, will be used for carrying out repairs and maintenance in the society which will benefit all the members including the incoming members. The authorities below are not able to show or bring on rec....
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....e impugned addition made on the basis of surmises, conjectures and assumptions is not sustainable. Hence, I delete the addition of Rs. 5,85,075/- made by the Assessing Officer and as confirmed by the CIT(A). 11. Before parting, a reference is necessary to the decision of the Tribunal in the case of Hathkesh Co-op Housing Society Ltd. (supra), which has been relied by the CIT()A in order to decide the issue against the assessee. I have perused the said decision and find that the same has been rendered in the context of the factsituation prevalent therein. On the basis of the fact-situation, the Tribunal noticed that commerciality was involved and there was a breach of principles of mutuality. For instance, the Tribunal noted that the member....