Assessee has challenged the addition of Rs.30,914/- made by the Assessing Officer on account of non-occupancy charges as income from the business not covered under the principles of “mutuality”. Learned AR submitted that the assessee’s case is covered by the decision of the ITAT Mumbai Bench passed in ITA No.6325/Mum/06 for the assessment year 2003-2004 vide order dated 14-5-2009 in the case of the assessee itself.
On the other hand, the learned Senior DR relied upon the findings of the Assessing Officer. We find that this issue is already covered by the decision of the ITAT in ITA NO.6325/Mum/06 for the assessment year 2003-2004 and also by the decision of the Hon’ble Jurisdictional High Court in the case of Mittal Court Premises Cooperative Society Limited Vs. ITO, reported in (2010) 320 ITR 414 (Bom), holding that non-occupancy charges will not be taxable on the ground of principle of “mutuality”. Accordingly, ground No.6 raised by the assessee is treated as allowed.
INCOME TAX APPELLATE TRIBUNAL, MUMBAI
ITA No.2102 /Mum/2010 – Assessment Year: 2007-2008
M/s Mahalaxmi Sheela Premises CHS Ltd. Vs. ITO
Date of pronouncement: 11th May 2012
O R D E R
PER AMIT SHUKLA (J.M.) :
The present appeal is arising out of the order dated 11-2-2011, passed by CIT(A)-28, Mumbai for the quantum of assessment determined under Section 143(3) for the assessment year 2007-2008 on the following grounds of appeal :-
“1. The learned Commissioner of Income Tax and learned assessing officer erred in assessing the Total Income of assessee at Rs.29,65,410/- instead of 16,28,150/-.
2. The learned Commissioner of Income Tax erred in passing an ex-parte order and mentioning incorrect facts. The authorised representative had sought an adjournment which was granted by the office of the commissioner. It was only on the last date in 10th February 2011 that the AR cold not attend due to ill health.
3. The learned Commissioner of Income Tax and learned assessing officer erred in arriving at the receipts from Smt. Sudha Vora at Rs.29,67,394/- instead of Rs.23,97,356/- (Rs.24,29,296/-) less 32,606/- (Municipal Taxes) without giving any reasons in assessment order although the ledger copy was on record of the assessing officer.
4. The learned Commissioner of Income Tax and learned assessing officer erred in treating receipt from Smt. Sudha Vora as income from other sources instead of income from House Property.
5. The learned assessing officer erred in taxing Rs.17,101/- received by way of miscellaneous income from the sale of scrap as business income and learned Commissioner of Income Tax appeal erred in confirming the same.
6. The learned assessing officer erred in treating Rs.30914/- being non occupancy charges as income from Business and Profession and learned Commissioner of Income Tax appeal erred in confirming the same.
7. Without prejudice to the other grounds raised, the Learned Commissioner of Income Tax Appeal failed to consider the alternative arguments of the assessee for granting deduction u/s 57(iii) of Rs.6,15,846/-.”
2. At the outset, learned AR on behalf of the assessee did not press the grounds No.1 & 2. Accordingly, grounds No.1 & 2 are dismissed as not pressed.
3. With regard to grounds No.3 & 4, learned AR submitted that the same issue is covered by the decision of ITAT in the case of assessee itself vide order dated 30-8-2011 passed in ITA No.784, 785 &786/mum/2010 for the assessment years 2000-2001, 2001-2002 & 2002-2003. Learned Senior DR relied upon the findings of the Assessing Officer as well as the CIT(A).
4. We have heard the rival parties and also considered the orders of the Assessing Officer as well as of the CIT(A). The assessee is a cooperative housing society. The issue involved is the receipt of Rs.29,67,394/- from leasing out the portion of terrace of the building and the wall to one Smt. Sudha Vora for the purpose of fixing of hoarding, neon sign, etc. would be treated as Income from house property” or it should be taxed under the head “income from other sources”.
4.2. The Assessing Officer after referring to various clauses of the agreement entered into by the assessee and Smt. Sudha Vora, came to the conclusion that it is “income from other sources”.
The CIT(A) too has confirmed the finding of the Assessing Officer, though in an ex-parte order. However, this issue has come up for consideration in the earlier years also, wherein the ITAT Mumbai Bench after referring and relying upon several decisions has held the receipts to be taxed under “income from house property”. The relevant finding as a whole as given by the ITAT are reproduced herein below:-
“3. In the appeal for assessment year 2000-01, the sole issue raised by the assessee is, whether the income received by the assessee on lease of a portion of terrace of the building and a wall of the building to one Mrs. Sudha Vora, for the purpose of fixing of hoarding, neon sign, etc., is assessable under the head “Income From Business or Profession” or under the head “Income From Other Sources”. The Assessing Officer assessed the income under the head “Income From Other Sources” on the ground that the amount received by the assessee is not for letting of a building or terrace or any land appurtenant thereto but on account of allowing to display the advertisement of neon sign, illuminated hoarding, of a size of 60’ x 20’ on the terrace and also illuminated hoarding of size of 20’ x 50’ on a vertical wall of the building are facing Padder Road.
4. On appeal, the Commissioner (Appeals) rejected the contention of the assessee on the ground that the terrace is not let out to Mr. Sudha Vora, and she has been allowed to use the terrace only to set-up the hoarding and to display the hoarding. He also commented that she could use only a portion of the terrace and that the purpose of utilization is not for stay, etc. The Commissioner (Appeals) distinguished the decision of the Delhi Bench of this Tribunal relied upon by the assessee. Aggrieved, the assessee is in further appeal before the Tribunal.
5. Before us, the learned Counsel relied on the following case laws:-
