2011 (8) TMI 1351 - AT - Income Tax

Summary

Issues involved: Assessment under section 144 of the Income Tax Act, 1961 for the assessment years 2002-03, 2004-05, and 2006-07.

Issue 1: Addition on account of transfer fees

The Assessing Officer challenged the correctness of CIT(A)'s orders regarding the addition on account of transfer fees in the mentioned assessment years. The issue revolved around whether the transfer fees received by the Co-operative Housing Society are exempt under the principle of mutuality. The Tribunal upheld the CIT(A)'s decision, citing the judgment of the Hon'ble Bombay High Court in similar cases and previous decisions. The Tribunal dismissed Ground No.1 in all the appeals.

Issue 2: Deletion of addition of various charges

The Assessing Officer disputed the deletion of additions related to general maintenance, miscellaneous income, change of user charge, lift charges, advertisement, and car parking charges, arguing that these amounts were exempt under the principle of mutuality. The Tribunal agreed with the CIT(A) that these contributions were for the maintenance and upkeep of the building, falling under the principle of mutuality. Ground No.2 in all the appeals was dismissed.

Issue 3: Deletion of addition on non-occupancy charges

The Assessing Officer contested the CIT(A)'s decision to delete the addition on account of non-occupancy charges. The Tribunal referred to the judgment of the Hon'ble Bombay High Court and various Tribunal decisions, concluding that non-occupancy charges were not taxable. Upholding the CIT(A)'s decision, Ground No.3 in all the assessment years was dismissed.

Issue 4: Treatment of interest received from Co-operative Banks

The Assessing Officer raised concerns about the deletion of additions on interest received from Co-operative Banks, claiming it was exempt under section 80P(2)(c) of the Income Tax Act, 1961. The Tribunal found that all interest income was from co-operative banks, making it eligible for exemption under the mentioned section. The CIT(A) had directed verification of the investments, and the Tribunal upheld the decision, dismissing Ground No.4 for the relevant assessment years.

In conclusion, all the appeals were dismissed by the Tribunal based on the detailed analysis and application of relevant legal principles and precedents.