2010 (8) TMI 969 - AT - Income Tax

Summary

Issues involved: Assessment of income of a Cooperative housing society u/s 143(3) of the Income tax Act, 1961 for the Assessment Year 2005-06.

Non-occupancy charges:
The Assessing Officer observed that the amount credited under 'towards sub-letting charges' was not a contribution but amount collected from members who leased out their premises. The ld. CIT(A) deleted the addition of non-occupancy charges based on the decision of the Special Bench of the Tribunal in Walkeshwar Triveni Hsg. Society.

Transfer fee and voluntary donation:
The Assessing Officer brought to tax transfer fee and voluntary donations, but the ld. CIT(A) deleted the addition based on the decision of the Hon'ble Jurisdictional High Court in Shyam Cooperative Housing Society Ltd. and Su Prabhat Co-operative Housing Society Ltd. The principle of mutuality was applied, and it was held that these amounts do not constitute income in the hands of the society.

Revenue's appeal:
The revenue appealed against the deletion of additions on non-occupancy charges, transfer fee, and voluntary donations. The revenue argued that the decisions of the Hon'ble High Court of Bombay have not been accepted by the department. However, the Tribunal upheld the order of the ld. CIT(A) based on the principle of mutuality and previous court decisions.

Judicial observations:
The Tribunal found that the issues were covered in favor of the assessee based on previous court decisions and the principle of mutuality. The Tribunal emphasized the importance of following judicial decisions and rejected the revenue's appeal, upholding the deletion of additions made by the Assessing Officer.

This summary highlights the assessment of income of a Cooperative housing society for the Assessment Year 2005-06, focusing on the treatment of non-occupancy charges, transfer fee, and voluntary donations based on the principle of mutuality and relevant court decisions.