2016 (3) TMI 1403 - AT - Income Tax

Correct head of income - Gain on sale of shares - Business Income or Long term Capital Gain - AO brought the amount of sale consideration of plot to tax in the hands of the assessee societies again under the head Profit Gains of Business profession - CIT(A) upheld the action of the Assessing Officer following the orders of his predecessor, passed in assessee s case in the first round of litigation - HELD THAT - Respectfully following the order passed by the co-ordinate bench of Mumbai Tribunal in 2011 (1) TMI 1564 - ITAT MUMBAI we restore the issue to the file of the Assessing Officer for deciding the same afresh as per the direction given by the tribunal. In the result, appeal of the assessee for the A.Y. 1995-96 is allowed for statistical purpose.

Summary

Issues Involved:
1. Condonation of delay in filing appeals for A.Y. 1995-96 and A.Y. 2008-09.
2. Determination of the nature of income from the sale of a common plot for A.Y. 1995-96.
3. Taxability of TDR premium for A.Y. 2008-09.

Issue-wise Detailed Analysis:

1. Condonation of Delay:
The appellant/assessee filed applications for condonation of delay of 23 days for A.Y. 1995-96 and 34 days for A.Y. 2008-09. The delay was attributed to an employee of the society forwarding the CIT(A) orders after the limitation period under the impression that the period for filing appeals before the ITAT is 90 days. The Tribunal, considering the inadvertent nature of the delay and in the interest of justice, allowed the applications, condoning the delay based on the precedent set by the Hon'ble Supreme Court in Collector Land Acquisition V. Mst. Katiji & others (1987) 167 ITR 471(SC).

2. Determination of Nature of Income (A.Y. 1995-96):
The appellant challenged the CIT(A)'s order confirming the AO's treatment of Rs. 23,69,000 as business income instead of long-term capital gains from the sale of a common plot. Initially, the ITAT had directed the AO to reconsider the issue in light of decisions in similar cases involving other co-operative housing societies. However, the AO again treated the amount as business income based on information from M/s Jai Hind Cooperative Housing Society. The CIT(A) upheld this determination. The Tribunal, referencing similar cases (e.g., Suvarna Nagar Coop. Hsg. Society Ltd. vs. ITO), found that the AO did not follow the ITAT's directions properly. Consequently, the Tribunal restored the issue to the AO for fresh consideration as per its previous directions, emphasizing the need to consider the final decisions in related cases.

3. Taxability of TDR Premium (A.Y. 2008-09):
The appellant contested the addition of Rs. 37,32,560 as taxable income from TDR premium, arguing it should be exempt under the principle of mutuality. The CIT(A) had dismissed this claim, confirming the AO's addition. The Tribunal noted that similar issues had been resolved in favor of the assessee in previous years (2003-04, 2004-05, and 2005-06) by both the ITAT and the Hon'ble High Court of Bombay. The Tribunal reiterated that the TDR premium received by the assessee is not taxable income under the principle of mutuality, following the precedent set in earlier cases. Consequently, the Tribunal allowed the appeal for A.Y. 2008-09, affirming the non-taxability of the TDR premium and rendering the alternative ground moot.

Conclusion:
The Tribunal allowed the appeals for both A.Y. 1995-96 and A.Y. 2008-09. For A.Y. 1995-96, the issue was remanded to the AO for fresh adjudication, while for A.Y. 2008-09, the Tribunal upheld the principle of mutuality, exempting the TDR premium from tax. The orders were pronounced in the open court on 9th March 2016.