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TMI Blog2012 (9) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... common amenities of members falls under the principles of Mutuality and not liable for taxes. iii) Under the facts and circumstances of the case the learned Assessing Officer erred in treating the transfer fee and repair fund charges amounting to Rs. 3,25,000/- as Income from business or profession, whereas it is not eligible to tax on the principles of mutuality. iv) Under the facts and circumstances the learned Assessing Officer as well as the learned Commissioner of Income Tax erred in not allowing the excess of expenses of Rs. 20,54,209/- from income incurred by the appellants in maintaining the society. v) Under the facts and circumstances of the case the learned Assessing Officer erred in making the addition of Rs. 1,33,920,/- being sale of scrap, garage rent, car parking etc., etc., as Income from other sources, whereas it is not liable to tax on the principles of mutuality. 2. During the year under consideration the appellant received compensation of Rs. 12,28,237/- for allowing the use of 350 Sq.ft., of its terrace area for placing the communication towers by the M/s. BPL Communications Ltd., and M/s. Tata Tele Services Ltd. The appellant in its return of income shown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other sources and accordingly disallowed 30% of deduction u/s 24(a) of the Act. On appeal, the CIT(A) dismissed the appeal of the assessee ex-parte, though on merit vide order dt 31.7.2006. Thereafter, the assessee filed a petition u/s 154 which was also dismissed by the CIT(A) vide order dt 17.7.2009. We have heard the rival contention as well as perused the relevant material on record. The ld AR of the assessee has submitted that an identical issue has been considered and decided by the coordinate Bench of the Tribunal in the case of M/s Mahalaxmi Sheela Premises CHS Ltd in ITA Nos.784 to 786/M/2010 vide order dated 30.8.2011 and submitted that the issue is now covered in favour of the assessee. The ld. DR on the other hand has submitted that since the assessee has received the license fee not for in the use of whole the premises but for terrace only. Further, the assessee is not the owner of the premises in question; therefore, the income on account of license fee has to be assessed as income from other sources. He has relied upon the orders of the lower authorities. Having considered the rival contention and perusal of the relevant material on record, we find that an ident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in the case of M/s. Dalamal House Commercial Complex Premises Co. Op. Society Ltd., the Tribunal while admitting the additional ground being a legal issue has also held that the letting out of the terrace erection of antenna and income derived from letting out has to be taxed as "income from house property" and not as "income from other sources' The Tribunal while deciding the Issue has followed the order of the Tribunal in the case of MIs. Cuffe Parade Sainara Premises Co. Op. Society Ltd. supra. In the absence of any distinguishing feature brought on record by the revenue, we respectfully following the order of the Tribunal (supra) and keeping in view the consistency while admitting the additional ground taken by the assessee hold that the letting out of terrace has to be assessed under the head "Income From House Property" as against "Income From Other Sources" assessed by the Assessing Officer and also allow deduction provided under section 24 of the Act and accordingly the additional ground taken by the assessee is allowed. Respectfully following the order of the Tribunal supra, we are of the view that the letting out of the terrace has to be assessed under the head inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... smallness of the tax effect. However, the counsel for the revenue is not in a position to point out any error in the orders passed by the ITAT. In this view of the matter, we see no reason to entertain the appeal on question ( c ). In the result, the appeal is dismissed with no order as to costs". Respectfully following the decision of jurisdictional High Court, we allow the appeal filed by the appellant. Ground of Appeal No.1 is decided in favour of the Appellant. 4. As the Ground of Appeal No.2 was not pressed by the appellant, same is dismissed. 5. Ground No.3 is about transfer fee and refund charges. During the course of assessment proceedings, it was found by the A.O. that in the balance sheet the assessee has credited Rs. 3,27,996/- under the repair funds. AO noticed that Society had charged Transfer Charges and Repair Fund from two members with regard to transfer of Flat Nos. 2 and 27. 5.1 A.O. observed as under: "the amounts have been collected only from those members who have either sold or purchased the premises in the building of the assessee society. It is clear that the amounts were collected for allowing transfer of the above mentioned premises. As regards, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um, during the year are brought to tax under the head 'income from business or profession". 5.2 Assessee by way of addition ground of appeal raised the said issue before the CIT(A). In para No.7 and 7.1 of his order, he decided the matter in these words: 5.3 "At the outset, the issue regarding the bye-laws of the society as to whether the appellant is allowed to let out the suitable portion of the common areas like terrace to outsiders for commercial purposes and to accumulate the common profit for building common fund and it's investment for welfare and common amenities of members, has never come up before the A.O. nor the facts relevant to the said issue are brought on record at any point of time during the course of assessment proceedings. Therefore, examining the bye-laws of the appellant's society in this regard and to arrive at a conclusion thereof is all together outside the purview of the assessment order which is in appeal before me. In other words, the said additional ground of appeal does not emanate from the facts borne on record. In view of the same, in my considered opinion, the said ground cannot be admitted at present since it has no relation to the facts availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was entitled to claim expenditure amount to Rs. 20.54 Lakhs, that AO and the CIT(A) had wrongly disallowed the claim made by the assessee. Departmental Representative (DR) on the other hand relied upon the order of the AO (para 5.6) and CIT(A) (Para 6 of pg.4) 6.2 We have heard the rival submission and perused the material. In our opinion, matter should be restored back to the file of the AO in the interests of justice. AO and the CIT(A) has not worked out properly the bifurcation of the amount Rs. 20.54 Lakhs. Secondly, CIT(A) has passed a non-speaking order in this regard. AO is directed to deal the issue afresh. 7. Last ground of appeal pertains to addition of Rs. 1.33 Lakhs made by the AO and confirmed by the CIT(A). As per the AR of the assessee's income amounting to Rs. 1.33 Lakhs included sale of scrap, garage rent and car parking, that the income received under these heads was not taxable on the principles of mutuality. He submitted that as far as garage rent and car parking receipts are concerned, same were received from the members of the Society and were being used for the members only. Thus, contributors and beneficiaries of the said income were identical. Department ..... X X X X Extracts X X X X X X X X Extracts X X X X
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