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These appeals have been filed by two different assessees challenging two separate orders dated 23rd April 2014 and 25th April 2014, passed by the learned Commissioner (Appeals)-32, Mumbai, pertaining to the assessment year 1995-96.

2. The first issue, which is common in both the appeals, relates to taxability of amount received by the assessees towards their shares in sale of common plot of land as business income.

3. Brief facts relating to this issue which are identical in both the appeals are, the assessees hitherto are part of 14 Co-operative Housing Societies formed in the year 1947 for providing housing to middle class persons in the suburbs of Vile Parle, Mumbai. The Government of Bombay Province (Housing Board) allotted Plots to these Housing Societies in the year 1960. Out of the Plots allotted to the Housing Societies, the Housing Board earmarked certain Plots for amenities and public utilities and share of each Housing Society in the said Plot was also specified. The area comprising the various amenities plots and the purpose thereof was also specified by the Government while conveying the land to the Societies. Since, a part of amenities plot was encroached by some people and the Co-operative Housing Societies could not evict them, all the 14 Co-operative Housing The Vallabhnagar Co-operative Housing Society Ltd.

4. The learned Authorised Representative submitted, a common Plot held by all 14 Housing Societies was sold in the previous year relevant to assessment year 1995-96. He submitted, the income received by the Housing Societies towards their respective shares in the sale proceeds was offered to tax under the head Capital Gain. However, the Assessing Officer assessed such income under the head Business & Profession. He submitted, while deciding identical issue in case of two other housing Societies, the Tribunal in ITA no.4255/Mum./2014 and ITA no.4802/Mum./2014, dated 7th September 2018, has held that receipts from sale of plot has to be assessed under the head Capital Gain. Thus, he submitted, facts being identical in the present appeals, the decision of the Tribunal will squarely apply.

The Vallabhnagar Co-operative Housing Society Ltd.

"9. We heard the parties on this issue and perused the record. There is no dispute with regard to the fact these are housing co-operative societies and they have been formed to acquire plots from the Bombay Housing Society and to allot the same to its members. As per the scheme of Government, certain plots were allotted in common for the purpose of creating common amenities. The individual plots allotted to each of the societies have been, in turn, allotted to its members. During the course of hearing, the Ld A.R also showed us that the societies herein have allotted plots to its members at Cost Price only, i.e., without making any mark up. Accordingly the ld A.R contended that there is absence of profit motive and hence the activities of the assessee cannot be considered as business. We find merit in the said contentions. The Ld A.R also submitted that, at some point of time, one of the common plots was allotted to School at nominal rate of Re.1/- per sq.ft. Be that as it may, we notice that the AO has mainly treated the impugned receipts as Business Income for the reason that the object clause mentions that they are involved in trading in plots. Another reason cited is that these societies could not prove their ownership rights.

10. The Hon'ble Supreme Court has held in the case of Raj Dadarkar & Associates (supra) that the object clause is not determining factor and the circumstances of each case should be examined to determine the nature of receipt. We notice that these Societies have sold the plot as its owner and the buyer has also accepted the same as owner. According to the societies, these common amenity plots have been owned by them jointly for about 15 years or more. When there is no dispute on this aspect, we are unable to understand as to how the AO was questioning the ownership. We also notice that the AO has not conducted any enquiry with any of the authorities to disprove the claim of the societies. We have noticed that these societies have sold another plot in the year relevant to AY 2004-05 to Indian Police Service, in which police quarters were proposed to be constructed. It can be noticed that the above transaction has taken place with a Government Agency. Had these societies were not the owners of the plots, a Government agency, which is a part of Police department, would not have acquired the plot from these Societies. Hence we do not find any reason to suspect the ownership claim of the plots.