2012 (2) TMI 617 - AT - Income Tax

Summary

Issues involved: Appeal against deletion of premium on transfer fees and TDR premium received by a society for assessment year 2004-05.

Premium on transfer fees:
The Revenue appealed against the deletion of premium on transfer fees of `10,60,000 received from members. The CIT(A) relied on a decision of the Mumbai High Court in the case of Sind Coop. Hsg. Socy. The Revenue contended that the case law cited by the CIT(A) pertained to assessment years prior to the notification dated 9.8.2001, of the Govt. of Maharashtra for Co. Hsg. Societies. The Revenue argued that for the assessment year in question, which was prior to the notification dated 27.11.1989, the principle of mutuality would not apply as the society had charged more than the permissible limits. The Revenue asserted that if the society retained the excess amount, it would be considered profit-making and subject to tax.

TDR premium:
The Revenue also challenged the deletion of a sum of `3,33,662, being TDR premium received from the members. The CIT(A) relied on a decision of the Mumbai High Court in the case of Sind CHS. After considering the rival contentions, it was found that the assessee was a plot society, not a flat society, and thus the notification dated 9th August 2001, issued by the Govt. of Maharashtra, did not apply. The first appellate authority had followed the judgment of the Hon'ble Jurisdictional High Court and granted relief to the assessee. Since all receipts were from the members, the order of the first appellate authority was upheld, and the Revenue's appeal was dismissed.

Conclusion:
The ITAT Mumbai upheld the decision of the CIT(A) regarding both the premium on transfer fees and the TDR premium, dismissing the Revenue's appeal. The order was pronounced in the open court on 22.2.2012.