Income Tax Appellate Tribunal - Mumbai
Bina Kapur ( Legal Heir Of Late Dilip ... vs Assessee on 4 July, 2013
आयकर अपील य अ धकरण,
धकरण मंुबई
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES 'B' MUMBAI
सव ी आय.पी. बंसल, या यक सद य एवं
/एवं
BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND
ी डी. क णाकर रावु, लेखा सद य
SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER
आयकर अपील सं. / ITA No.427/MUM/2012
नधारण वष /Assessment Year 2002-03
Smt. Bina Kapur (Legal Heir of बनाम Income Tax Officer 18(1)(1),
बनाम/
Late Dilip Kapur) Mumbai.
Vs.
03, Kishori Court, Worli Sea
Face, Mumbai 400 030.
थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. : AAEPK 7176M
(अपीलाथ /Appellant) .. ( यथ / Respondent)
अपीलाथ ओर से/ Appellant by: Shri Jayesh Dadia
यथ क ओर से/Respondent by : Shri Paresh Johri
सनवाई
ु क तार ख / Date of Hearing : 04/07/2013
घोषणा क तार ख /Date of Pronouncement : 04/07/2013
आदे श / O R D E R
PER I.P.BANSAL, J.M:
This is an appeal filed by the assessee. It is directed against the order dated 08/11/2011 passed by Ld. CIT(A)-29, Mumbai for the assessment year 2002-03. The grounds of appeal read as under:
"(1) The Ld. CIT(A) has erred in law and on the facts of the case in confirming the action of the Assessing Officer of reopening the assessment under section 148 of the Act. The action is bad in law.
2 आयकर अपील सं. / ITA No.427/MUM/2012 नधारण वष /Assessment Year 2002-03 (2) The Ld. CIT(A) has erred in law and on the facts of the case in confirming the addition of Rs.3,49,176/- made by the Assessing Officer as income. The action is unjustified and unwarranted as your petitioner received the said amount from the Co-operative society of which he is a member and the same is not taxable under the principle of mutuality.
(3) The Ld. CIT(A) has erred in law and on the facts of the case in confirming the addition of Rs.13,800 made by the Assessing Officer as income. The action is unjustified and unwarranted as your petitioner did not receive such income.
(4) Your petitioner craves leave to add, amend, alter and / or withdraw the aforesaid ground of appeal."
2. Impugned assessment order is dated 29/12/2009 passed under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (the Act). The assessment was reopened for the reason that an amount of Rs.2,06,900/- has escaped assessment. The assessee was partner with M/s. Bombay Cold Storage from where a share of profit of Rs.8,24,157/- was received which claimed as exempt under section 10(2A) of the Act. During the course of assessment proceedings it was observed that assessee had received a sum of Rs.2,06,900/- from a society M/s. New India Co-Operative Housing Society Ltd. According to AO such receipts were taxable. During the course of assessment proceedings the AO also came to notice that certain other valuable articles were received from the said society and the same were also added to the income of the assessee, which aggregate to a sum of Rs.3,62,976/-( including amount of Rs. 2,06,900/-). All these were claimed by the assessee to be exempted on account of principle of mutuality. Such claim of the assessee has not been accepted by the AO and Ld. CIT(A). The assessee is aggrieved hence filed this appeal.
3. Vide letter dated 1/7/2013 it has been informed by Ld. AR that the issue in the present appeal is covered in favour of the assessee by the order of the Tribunal in subsequent years i.e. for A.Y 2003-04 and 2004-05. Copy of this order has been placed in the paper book at pages 1 to 9. It has been held that the payments received by the assessee are governed by the principle of mutuality and the appeals filed by the assessee were allowed.
3 आयकर अपील सं. / ITA No.427/MUM/2012 नधारण वष /Assessment Year 2002-03
4. Reference in this regard can be made to the order of the Tribunal dated 30/4/2012 in ITA No.428 & 429/Mum/2012 for assessment year 2003-04 and 2004-05. For the sake of completeness the observations of the Tribunal are reproduced as under:
"In these two appeals the assessee has challenged the impugned orders of the Ld. CIT (A)-29, Mumbai dated 08.11.2011 for the A.Ys. 2003-04 and 2004-05 respectively. The common issue in both the appeals is whether the A.O. was justified in making the addition of Rs. 1,71,000/- and Rs. 1,12,000/- in respect of the amount received from co-operative society in which the assessee is a Member for the A.Y. 2003-04 and 2004-05 respectively.
2. In both the assessment years, the A.O. reopened the assessments by issuing the notice u/s.148. In the A.Y. 2003-04 the A.O. has observed that M/s. New India CHS Ltd. which is a society of the land owners and the assessee Late Shri Dilip Kapur is a Member of the said Society. The Society has given gift of ICICI bonds, gold & silver coins, Gold Biscuits to the cartel etc. and also paid compensation towards suffering on account of failure of Versova Sewage pumping station i. e. Rs. 1 lakh each, compensation for loss suffered because of heavy rains on 26.07.2005, Rs. 10 lakhs each for renovation, repairs and beautification of buildings, Rs. 5 lakhs each termite treatment, etc. So far as present assessee is concerned, the A.O. has observed that the assessee has received Rs. 2,05,900 in the form of gold coins, ICICI bonds, silver items etc. The assessee contended that the assessee has received only Rs. 1,61,000/- which includes ICICI bond of Rs. 50,000/-. The assessee claimed that said amount is 'exempt' on the 'principles of mutuality'. The A.O. rejected the claim of the assessee and brought to tax Rs. 1,71,000/- as 'income of the assessee'. In the A.Y. 2004-
05 again the A.O. has 'brought to tax' Rs. 1,12,000/- rejecting the claim of exemption on the 'principles of mutuality'. The assessee challenged the impugned additions before the Ld. CIT (A) but without success. Now, the assessee is in appeal before the Tribunal.
3. I have heard the parties and perused the records. I find that the issue stands covered in both the appeals in favour of the assessee by the decision of the ITAT 'C' Bench, Mumbai (Divisional Bench) in the case of Dy. CIT, Mumbai vs. Shri Kartik M. Patel in ITA No.3911/Mum/2010 order dated 4 आयकर अपील सं. / ITA No.427/MUM/2012 नधारण वष /Assessment Year 2002-03 27.02.2012 who is also the member of the same society i.e. M/s. New India CHS Ltd. The operative part of the order of the Tribunal is as under:
"7. We have heard perused the compilation filed by the assessee. The assessee has filed the copies of the resolution passed by the society. So far as amount of Rs. 10 lakhs paid to the assessee to meet the damages is concerned, we find that the same is duly supported by the resolution of the society dated 14.09.2005 (page no.17 to 20). So far as Rs. 6 lakhs is concerned, we find that even the bye-laws of the society, (Copy placed on page no.27 to 56) permits the said payment vide clause No.66. So far as New India Society is concerned, while completing assessment, additions were made in the hands of said society for distributing Rs. 10 lakhs to certain Members towards the compensation of loss incurred due to devastating floods which occurred on 26.07.2005 and hence, the assessee society income was held taxable and not covered under the mutual benefits. When the Society's case reached before the Tribunal it was held that the income of the New India Society was covered under the principles of Mutuality and merely some of the Members were paid or distributed Rs. 10 lakhs to compensate the loss incurred due to devastating rain occurred on 26.6.2005, it cannot be said that the activities of the said society were out of the principles of the Mutuality (Copy of the Tribunal order at pages 6 to 40) in ITA Nos.5846, 5847, 5448/M/200.. dated 31.01.2011. In our opinion, the amounts received by the assessee cannot be treated as an income within the meaning of sec.4 of the Income-tax Act which is charging provision. Admittedly, the entire income of the New India Society is covered under the principles of mutuality which has been confirmed by the Tribunal also in case of New India Society for the A.Ys. 2001-02, 2002-03 and 2005-06. The assessee has paid out of the common funds and on the principles of mutuality the amount received by the assessee cannot be treated as a benefit in nature of profit or income as assessee is also paying maintenance charges and other levies to the Society. We do not find any reason to interfere with the order of the Ld. CIT (A). We, accordingly, confirm the same.
"8. The Ld. Counsel submits the decisions of the Tribunal in the case of New India Society were challenged by the revenue before the Hon'ble jurisdictional High Court and the appeals filed by the revenue have been dismissed. The Ld. Counsel filed the copies of the Tribunal order of the Hon'ble High Court in the case of New India Society Ltd. dated 09.09.2011 and 09.11.2011 respectively which are placed on record.
9. In the result, revenue's appeal is dismissed."
5 आयकर अपील सं. / ITA No.427/MUM/2012 नधारण वष /Assessment Year 2002-03
4. As the facts are identical in the case of the present assessee, I, therefore, following the order of the Tribunal in the case of Shri Kartik Patel (supra) allow grounds in both the appeals and direct the A.O. to delete impugned additions.
5. In the result, both the appeals of the assessee are allowed.
Order pronounced in the open court on this day of 30th April 2012."
5. We have heard both the parties on this issue. Since the facts and circumstances of the present year are same, respectfully following the aforementioned order of the Tribunal in the case of assessee herself for subsequent years, we allow ground No.2 &3 filed by the assesee. It may be mentioned here that amounts mentioned in both the grounds relates to amount received by the assessee from the society.
6. So far as it relates to Ground No.1, Ld. AR did not pressed the same. Moreover, the said ground has also become infructuous in view of the deletions of the additions made in the reassessment. Therefore, this ground is dismissed of having become infructuous. With these observations the appeal filed by the assessee is partly allowed in the manner aforesaid.
7. In the result, appeal of the assessee is partly allowed in the manner aforesaid.
Order pronounced in the open court on 04/07/2013 आदे श क घोषणा खले ु यायालय म दनांकः 04/07/2013 को क गई ।
Sd/- Sd/-
(डी. क णाकर रावु / D.KARUNAKARA RAO) (आय.पी. बंसल / I.P. BANSAL)
लेखा सद य / ACCOUNTANT MEMBER या यक सद य / JUDICIAL MEMBER
मंुबई Mumbai; दनांक Dated 04/07/2013
6 आयकर अपील सं. / ITA No.427/MUM/2012
नधारण वष /Assessment Year 2002-03
आदे श क त ल प अ े षत/Copy
षत of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. आयकर आयु (अपील) / The CIT(A)-
4. आयकर आयु / CIT
5. वभागीय त न ध, आयकर अपील य अ धकरण, मंुबई / DR, ITAT, Mumbai
6. गाड फाईल / Guard file.
आदे शानसार
ु / BY ORDER,
स या पत त //True Copy//
उप/सहायक
उप सहायक पंजीकार (Dy./Asstt. Registrar)
आयकर अपील य अ धकरण
धकरण, मंब
ु ई / ITAT, Mumbai
व. न.स./Vm, Sr. PS