Case Law Details
Issue- Whether on the facts and circumstances of the case and in law, the ITAT was justified in upholding the CIT(A)’s order and rejecting the departmental appeal in accepting the Assessee’s plea that the contribution of Rs.39,68,000/- paid towards ‘heavy repair fund’ is covered by the principle of mutuality and is not chargeable to tax.
Facts of the case- Assessee is a Co-operative Housing Society. It received a sum of Rs.39,68,000/- on account of transfer of flat and garage and credited it to ‘general amenities fund’ as well as ‘repair fund’. This receipt of Rs.39,68,000/- has been claimed as exempted from tax by the Assessee. The return of income was filed for Assessment Years 2005-2006 declaring nil income. The same was processed and later on upon compliance with the statutory formality the Assessment Officer held that if the Assessee’s source of income is nothing but interest on fixed deposits and interest on saving bank account, then, this sum is nothing but receipt on account of transfer of flat and garage, namely Flat No.12B and 2A. The Assessing Officer disallowed the exemption by holding that the principle of mutuality will not apply.
Held by CIT (A) & ITAT
However, the CIT(A) and Tribunal allowed the assessee’s claim by relying on Sind Co-operative Housing Society vs. ITO 317 ITR 47.
Held by High Court-
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Dear Sir,
I am a member in a Co-op society in Vashi. My Pvt ltd. company used to own an office premises. Now we changed the status from Pvt Ltd company to LLP, the society refuses to transfer the office in new name. There is no change in anything, except pvt ltd company changed to LLP – Partnership firm.
I look forward to your reply about my rights and society’s by-laws interpretation in the case.
Thanks