TaxTMI 
TaxTMI 
2016 (2) TMI 620
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....count of Non-Occupancy Charges from the members of the society in utter disregards to the principals of mutuality. 4. The learned CIT (Appeals) has also erred in not considering the order of the Hon. ITAT in the case of the Appellant where in the transfer fees received are treated as receipts from members of the society under the principals of mutuality. 5. The learned CIT (Appeals) has erred in disallowing the claim of the appellant for deduction u/s 80P(2)(d) for the interest earned from co-operative banks. The learned CIT (Appeals) thereby enhanced the assessment and made an addition of Rs. 14,88,107/- 6. Further the learned CIT (Appeals) has erroneously applied the judgment of Totagar Co-operative Sale Society Limited (322 ITR283) (SC) in respect of interest from Bank. 7. The learned CIT (Appeals) has erred in enhancing the assessment by making an addition of Rs. 2,06,400/- being amount recovered from members towards car parking charges, Rs. 37,290/- for temporary car parking charges on the ground that the said receipts are not covered under the concept of mutuality. 8. The appellant prays that the receipts on account of transfer fees amounting to Rs. 11,00,000/-....
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.... 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 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 decision of th....
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.... Hon'ble Supreme Court. The Ld. AR submitted that the non-occupancy charges received from members were spent for the mutual benefits of the members and the AO added the same to the income of the assessee in utter disregards to the principle of mutuality. The Ld. Counsel placed reliance on Mittal Court Premises Co-operative Society Ltd. v/s Income Tax Officer (supra) and prayed that the addition of Rs. 6,04,500/-made by the Assessing officer be deleted by reversing the order of CIT(A) on this issue. On the other hand the ld. AR relied on the order of the authorities below. 4.2. We have heard the rival submissions and perused the material on record and find that the assessee received non-occupancy charges from those members who let out their flats. The charges are received at the prescribed rates as per the byelaws of the society and are spent for the common purposes of the society for the benefit of the members. In the case of Mittal Court Premises Co-operative Society Ltd. v/s Income Tax Officer 320 ITR 414 the Hon'ble High Court held that the bye-laws themselves provided for non-occupation charges. The contribution, therefore, was by the members for the purpose of mutual benefit.....
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....er the head 'Income from Other Sources' and no deduction U/S 80P(2)(a)(i) of the Act is allowable. Thus the said decision was delivered by the Hon,ble Apex Court on the provisions of section 80(P)(2)(a)(i) of the Act . The ld. AR also argued that the criteria of claiming deduction u/s 80(P)(2)(a)(i) is totally different from that of provisions of section 80(P)(2)(d) of the Act. The ld. Counsel drew distinction between two provisions of the Act by submitting that provisions of section 80(P)(2)(a)(i) are applicable to a assessee carrying on the business of banking or credit facilities to its members. The ld Counsel for the assessee further submitted that the Hon'ble Supreme Court had specifically mentioned that the decision in the present case confined to the facts of the said case. Whereas ,on the other hand, in order to claim deduction u/s 80(P)(2)(d) of the Act the only condition is that the assesee should be co-operative society and it has interest income accrued from the investment with other cooperative society including co-operative bank which is included in or part of the gross total income. It was argued that the pre-condition for claiming and allowing deduction u/s 80P(2)(a....
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....he case before us the issue is whether a co-operative society which has derived income on investment with cooperative banks is entitled to deduction u/s 80P(2)(d). The provisions of Section 80P(2)(d) of the Act provide deduction in respect of income by way of interest or dividend on investments made with other Cooperative society. For the purposes of better proper understanding of these two provisions the relevant extract of the section are reproduced below: 80P: Deduction in respect of income of co-operative Societies. 1. Where, in the case of an assesssee being a co-operative society, the gross total income, includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee. 2. The sums referred to in sub-section (1) shall be the following, namely:- (a) In the case of a co-operative society engaged in- (i) Carrying on the business of banking or providing credit facilities to its members. The whole of the amount of profits and gains of business attributable to any one or more of much attributes. (d)In r....