Non-occupancy charges received by Housing society not taxable

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

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