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TMI Blog1988 (5) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... Society gave the flat on the leave and licence to outsiders. The levy which the assessee was entitled to collect ranges between Rs. 100 to Rs. 200 per month in respect of each flat which was given on leave and licence. The assessee pleaded before the ITO that neither of these two amounts was includible in the total income of the assessee. As regards the consent fee referred to above, the plea was that the same did not partake the character of revenue and that it represented capital receipt. The assessee gave the following two reasons before the ITO in support of said plea by his letter dt. 7th Feb., 1979: (1)the receipt is not definite source of income as there is no guarantee for such amounts being received. 20 the society has to run the risk that might be fall on such transfer of flats and not the member or members of the society and the consent fee is charged against and damage, loss or suffering. In support of the plea that the amount representing leave and licence and extra levy was not includible in the net wealth, the assessee in said letter submitted the following four reasons: (i)that the leave and licence levy is not recurring in the hands of the society as it all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a permanent membership that passes on to the new entrant to the building. (d)The consent fee leave licence extra levy is for the administration of the affairs of the Society and also towards maintenance expenses of the building. The utilisation of the receipts is also for the mutual benefit of the members of the society." 7.The Department is not win appeals before us and the common ground raised are as follows: "(1) On the facts and interest he circumstances of the case, the AAC erred in holding the receipts under the heads ' Consent fee" and "Leave Licence Extra Levy" was capital in nature." (2) On the facts and in the circumstances of the case, the AAC should have confirmed the ITO's order and should have held that the receipts for "Consent Fee" and "Leave Licence Extra Levy" was revenue in nature." 8.The learned Departmental Representative submitted that both the receipts fell in the Revenue field and that they did not constitute capital receipt. There was a definite source for these receipts and these receipts came at frequent intervals. Consequently, they had all the characteristics of the Revenue receipts. He relied on the decision of the Special Benc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions take place, the assessee-society becomes entitled to receive the consent fee and leave and licence extra levy, respectively. Consequently, the amounts received from such transactions would partake of the nature of revenue receipt and not capital receipt. 11.The principle laid down in the decision of the Special Bench of the Tribunal in the case of Jai Hind Co-op. Hsg. Society Ltd. would be applicable to the facts of this case although the facts are not exactly similar. In that case, the assessee C0-operatvie Society allotted plots to its members on lease and that under the bye-laws, the members were entitled to sell the plots if they paid 50 per cent of premium on sale to society. The question was whether the amount received by the assessee-society from members on account of aforesaid stipulation was revenue receipt. The Tribunal held that the amount received was a revenue receipt. It was observed as follows in said decision: "The receipt by the member in respect of the transfer of the property may or may not be a capital receipt in his hands depending upon the facts in the case of each such member. The receipt by the society, however, was from a different source, namel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of sale of plots or sale of flats, the object clause of the society is also not relevant because the Tribunal has considered this item as not an item of business of the society. The Tribunal has treated this item as income from other sources' Similarly, the fact that in said decision the premium was shared by the Society would not be relevant. In our case the assessee-society is charging certain amount as consent fee. The material fact is that the society received certain amount in respect of the transactions which were entered into by the members and that the said receipts came from a source which was to be found in the bye-laws. We hold that the principle laid down in said decision would be applicable to the facts of this case. Accordingly, the amounts in question must be regarded as revenue receipts and not capital receipts. 13.The learned counsel for the assessee relied on one unreported decision of the Tribunal dt. 29th Oct., 1976, said to have been published in Tax Planning, dt. 15th Jan., 1977. In that decision, the main question discussed was whether the receipt in question was a business receipt or not. One of the objects of the society was to carry on the business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this receipt was of a casual and non-recurring nature and, therefore, exempt from tax under s. 4(3)(vii) of the IT Act, 1922. The facts are obviously not similar to the facts of our case. In that case there was neither any design nor any plan behind the money that the assessee obtained from the Americans. In our case, the assessee has a source of receiving the amounts frequently on completion of certain transactions. Consequently, in our case the amounts are not of casual and non-recurring nature. For the reasons already given, we hold that the amounts received as consent-fees and leave and licence extra levy were assessable as income from other sources. We, accordingly, set aside the orders of the AAC and restore the orders of the ITO. 16.We now come to the cross objections filed by the assessee. We may state the facts relating to the asst. yr. 1975-76. The assessee had received gross income of Rs. 19,864 from advertisement. The receipt was on account of hoarding put up in the compound of the assessee-society. Against the said income the assessee-society claimed expenses of Rs. 10,723. This amount included a portion of security, accountant's salary and peon's salary. The hoardi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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