2011 (6) TMI 822 - AT - Income Tax

Summary

Issues involved: Appeal by revenue against CIT(A) order u/s 32 Mumbai for assessment years 2003-04, 04-05, and 05-06 regarding deletion of premium on transfer fees and TDR premium.

Transfer Fees Issue:
The revenue contended that transfer fees received by a Co-operative Housing Society were taxable income. However, the principle of mutuality was invoked by the assessee to argue against taxability. Previous Tribunal and High Court decisions supported the application of mutuality to such fees, emphasizing that as long as there was no commercial element, the fees were not liable to tax. The Court held that the transfer fees were not chargeable to tax based on the principle of mutuality.

TDR Premium Issue:
Regarding the TDR premium received by the society, it was argued that this amount was also covered by the principle of mutuality. The CIT(A) in a previous assessment year had ruled in favor of the assessee, stating that the TDR premium was non-taxable due to the concept of mutuality. The ITAT upheld this decision, citing a Special Bench ruling. The current CIT(A) also held that the TDR premium was not taxable income based on the principle of mutuality. The Tribunal rejected the revenue's claim, affirming that the TDR premium was not taxable.

In conclusion, all three appeals by the revenue were dismissed based on the application of the principle of mutuality to both transfer fees and TDR premium.