TaxTMI 
TaxTMI 
2016 (3) TMI 172
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....stified in deleting the addition of Rs. 13,00,000 on account of voluntary contributions towards special repair fund holding that charging of transfer fees has no element of trading or commerciality and the same was covered under the concept of mutuality ? (2) Whether, on the facts and circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) was justified in allowing to carry forward and set off of unabsorbed depreciation and business loss stating that the assessee had shown income from business and profession in return of income ?" 3. The facts necessary for disposal of the appeal are as under. The assessee is a co-operative housing society. For the year under consideration it had not filed its return of inco....
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....hat no additional amount shall be recovered from the transferor or transferee. He also observed that the transfer premium may be termed as contribution towards building funds, repair funds, etc., but the nomenclature of the receipt cannot hide the substance of the transaction since the society collected more than Rs. 25,000 towards transfer premium in violation of the by-laws of the co-operative society, which is covered under the principle of mutuality and therefore brought to tax a sum of Rs. 13,00,000. He also observed that the assessee had given a note below the computation of income that current year depreciation of Rs. 11,40,199 to be carried forward to subsequent year whereas by virtue of the provision of section 32(1) of the Act dep....
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....made by the members as transfer premium and thus raising a demand by bringing to tax these contributions on the ground that the bye-laws have been violated, overlooking the fact that the amount received was covered under the principle of mutuality. The transfer fees and voluntary contributions are two different collections and hence repair charges cannot be considered as transfer premium. 6. With regard to the expenditure debited under various heads such as cleaning charges, lift repair, maintenance, etc., it was contended that the bills and vouchers furnished before the Assessing Officer were countersigned by third parties and therefore there was no need to disallow 10 per cent. on ad hoc basis. It was also submitted that the Assessing Of....
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....issioner of Income-tax (Appeals) observed that the Assessing Officer was justified in making the disallowance since the burden is upon the assessee to prove that the expenditure was actually incurred. It may be noticed that the assessee has not preferred any cross appeal in this regard presumably on account of smallness of the amount. 8. With regard to the decision rendered by the Assessing Officer as regards non-entitlement to carry forward and set off of unabsorbed depreciation the learned Commissioner of Income-tax (Appeals) observed as under : "2.4.16 Ground No. 4 is against the action of the learned Assessing Officer in concluding that the appellant was not entitled to carry forward and set off of unabsorbed depreciation by stating t....
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....uishable on facts. 11. On the other hand, learned counsel for the assessee submitted that the issue is clearly covered by the aforecited decisions. He stated that the assessee has been collecting repair fees not only from outgoing members but also from existing members on the strength of damage caused to the structure of the building so that it can be repaired and maintained in good condition. It was therefore submitted that it has nothing to do with the transfer fees but it is the actual expenditure connected with maintenance of the building. 12. I have carefully considered the rival submissions. This is an appeal by the Revenue and it is for the Revenue to prove that the case law relied upon by the Commissioner of Income-tax (Appeals) i....