2013 (1) TMI 829 - AT - Income Tax

Summary

Issues involved: Appeal by Revenue against deletion of addition made by AO on account of transfer fees and non-occupancy charges.

Transfer Fees Issue: The AO added the amount received by a Co-operative Housing Society as transfer premium to its total income, alleging a profit motive behind it. The CIT(A) deleted this addition based on the principle of mutuality upheld in previous court decisions. The Tribunal, citing the case of Sind Co-operative Housing Society vs. ITO, ruled in favor of the assessee, stating that the charging of transfer fees had no commercial element and was not liable to tax. The appeal by Revenue on this ground was dismissed.

Non-Occupancy Charges Issue: The AO also added non-occupancy charges received by the society to its total income. The CIT(A) deleted this addition, following the decision of Mittal Court Premises Cooperative Society case, where it was held that non-occupancy charges were exempt under the principle of mutuality. The Tribunal upheld this decision, stating that the charges were collected to increase funds for providing services to members. The appeal by Revenue on this ground was also dismissed.

Conclusion: The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decision to delete the additions made by the AO on transfer fees and non-occupancy charges, based on the principle of mutuality and previous court rulings.