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3. Briefly stated, the facts are that the assessee is a co-operative housing society which received the aforesaid amounts during the years under consideration, at the time of transfer of flats from the transferors as well as the transferees. These amounts were not offered for taxation on the ground that concept of mutuality applied in the assessee's case. However, the assessing officer was of the view that concept of mutuality did not apply to the case of the assessee for the reasons - (1) the amounts received were not voluntary contributions, (2) element of commerciality was attached to such receipts, (3) the amounts were collected with the clear intention to earn profit, and (4) the receipts in question were like windfall profit. Reliance was also placed by the assessing officer on the decision of the Tribunal, viz., Oval Shiv-Shanti Bhuvan Co-op. Housing Society Ltd. v. ITO and Regent Chambers Premises Co.-op. Society Ltd. v. ITO , respectively, wherein it has been held that transfer fees received by the co-operative society from the incoming and outgoing members would be treated as revenue receipt chargeable to tax in the hands of the society. Further reliance was placed on another decision of the Tribunal in the case of Sea Face Park Housing Society, wherein it was held by the Tribunal that principle of mutuality was not applicable to such receipts, as such fees could not be considered as a voluntary contribution. Reliance was also placed on the judgment of Hon'ble Bombay High Court in the case of CIT v. Presidency Co-operative Housing Society Ltd. . In view of the same, the additions mentioned above were made by the assessing officer.

4. The matter was carried in appeal before the Commissioner (Appeals), before whom various decisions were relied upon by the appellant, for the proposition that concept of mutuality was applicable to such societies. Special reliancewas placed on two decisions of the High Courts, viz., CIT v. Adarsh Co-op.Housing Society Ltd. and CIT v. Apsara Co-op. Housing Society Ltd. (1993) 204 ITR 6623 (Cal.). The Commissioner (Appeals), following the decision of the Special Bench of the Tribunal in the case of Walkeshwar Triveni Co-op. Housing Society Ltd. v. Income Tax Officer , held that the transfer fee received from the transferees are not covered by the concept of mutuality and, therefore, the same was taxable as revenue receipt in the hands of the assessee. It was further held that the transfer fee received from the transferors was covered by the concept of mutuality, subject to the maximum amount of Rs. 25,000. Accordingly, he allowed partial relief of Rs. 2,25,000 for assessment year 2000-01 and Rs. 1,50,000 for assessment year 2001 -02. Still aggrieved, the assessee is in further appeal before the Tribunal.

5. The learned Counsel for the assessee has contended before us that the concept of mutuality was held to be applicable by the Special Bench with reference to the amount received by the assessee from the transferor of the flat. Therefore, to that extent there is no dispute before the Tribunal. However, it has been submitted by him that limit of Rs. 25,000 cannot be applied to each and every case of housing society. According to him, the Special Bench was considering the model bye-laws framed by the State Government in pursuance to the powers under the Maharashtra State Co-operative Societies Act. He also invited our attention to para 42 of the said judgment in support of the above submissions, inasmuch as it has been mentioned in this para that the learned Departmental Representative had drawn the attention of the Tribunal to the model bye-laws. He then referred to the order dated 9-8-2001 issued by the State Government of Maharashtra under Section 79(A) of the Maharashtra State Co-operative Societies Act, wherein it has been directed that the rate of premium payable on transferring of member's interest in the building of co-operative housing society shall be decided in the regular general meetings of the members but the rates of premium to be fixed by the general meetings shall not exceed the sum of Rs. 25,000 where societies situated in Municipal Corporation of Mumbai. The contention of the learned Counsel for the assessee is that such order is applicable only to those societies which have adopted the model bye-laws and, therefore, would not be applicable to other societies. He has also referred to opinion of an advocate to substantiate his arguments. He then referred to the Supreme Court decision in the case of State of Maharashtra v. Karvanagar Sahakari Griha Rachana Sansiha Maryadit (2000) (Suppl.) Bom. C.R. 864, wherein it has been held that the directions issued under Section 79(A) of the Maharashtra State Co-operative Societies Act, should be in the interest of society. What is in the interest of society is for the society to decide and not for outside agency to say. Accordingly, the Supreme Court upheld the order of the Bombay High Court, quashing the directions on the ground that such directions were not in the interest of society. In view of the same it was submitted by the learned Counsel for the assessee that the order issued by the State Government, under Section 79(A) of the Maharashtra State Co-operative Societies Act was in the form of mere guidelines and, therefore, could not be applied to the case who has not adopted the model guide laws. According to him, the bye-laws of the society permit the transfer fees to be charged from the transferor subject to maximum amount equal to 5 per cent of the sale proceeds. It was further submitted by him that in the case of the assessee, the annual general meeting held on 16-8-1995, had resolved to charge the transfer fee equivalent to 1 per cent of the value shown in the deed of transfer. This was increased to 2 per cent of the sale price where both parties to the transactions are individuals or members of partnership firm and 3 per cent of the sale price where one of the partners to the transactions is a cooperative body, vide annual general meeting held on 14-9-1997. According to him, the transfer fees charged by the assessee was in accordance with the fee fixed in the annual general meeting and, therefore, the entire amount was exempt from taxation considering the concept of mutuality.

8. Rival submissions of the parties have been considered carefully. The Special Bench in the case of Walkeshwar Triveni Co-op. Housing Society Ltd. (supra) has held -

(i) That considering the concept behind the formation of co-operative societies, it is to be presumed that the co-operative society is a voluntary association;
(ii) The concept of mutuality is applicable to such societies provided the contributors and participators to the fund are the same;
(iii) The concept of mutuality would apply in respect of transfer fees received from the transferor of the flat inasmuch as he is the member of the society on the date when the transfer fee is paid;