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Income Tax Officer,mumbai Vs. Venkatesh Premises - Court Judgment

LegalCrystal Citation
CourtSupreme Court of India
Decided On
Source Link
Case Number30282 / 2010
AppellantIncome Tax Officer,mumbai
RespondentVenkatesh Premises
Appellant AdvocateAnil Katiyar
Respondent AdvocateV. N. Raghupathy
Excerpt: senthil jagadeesan,aor hon'ble mr. justice navin sinha pronounced the reportable judgment of the bench comprising hon'ble mr. justice rohinton fali nariman and his lordship. delay condoned. leave granted in all the slps. 27 the appeals preferred by the revenue are dismissed and civil appeal no.1180/2015 preferred by the assessee-society is allowed in terms of the signed reportable judgment. pending application, if any, stands disposed of. (sarita purohit) (suman jain) court master branch officer (signed reportable judgment is placed on the file) 28

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.2706 OF 2018 (arising out of SLP (C) No(s). 30194/2010) INCOME TAX OFFICER, MUMBAI ….APPELLANT(S) VERSUS  VENKATESH PREMISES COOPERATIVE  SOCIETY LTD. ….RESPONDENT(S) with CIVIL APPEAL NO. 3827 OF 2012 CIVIL APPEAL NO. 3271 OF 2012 CIVIL APPEAL NO.3272 OF 2012 CIVIL APPEAL NO.1180 OF 2015 CIVIL APPEAL NO.2997 OF 2017 CIVIL APPEAL NO.8741 OF 2017 CIVIL APPEAL NO(s).2708 OF 2018 (arising out of SLP(C) No. 32061/2010) CIVIL APPEAL NO(s).2707 OF 2018 (arising out of SLP(C) No. 30195/2010) CIVIL APPEAL NO(s).2713 OF 2018 (arising out of SLP(C) No. 32914/2010 CIVIL APPEAL NO(s).2710 OF 2018 (arising out of SLP(C) No. 32913/2010 CIVIL APPEAL NO(s).2709 OF 2018 (arising out of SLP(C) No. 32063/2010) CIVIL APPEAL NO(s).2711 OF 2018 (arising out of SLP(C) No. 32065/2010) CIVIL APPEAL NO(s).2712 OF 2018 (arising out of SLP(C) No. 34087/2010) 1 CIVIL APPEAL NO(s).2716 OF 2018 (arising out of SLP(C) No. 35120/2010 CIVIL APPEAL NO(s).2714 OF 2018 (arising out of SLP(C) No. 32918/2010) CIVIL APPEAL NO(s).2715 OF 2018 (arising out of SLP(C) No. 34061/2010) CIVIL APPEAL NO(s).2717 OF 2018 (arising out of SLP(C) No. 128/2011) CIVIL APPEAL NO(s).2728 OF 2018 (arising out of SLP(C) No. 16967/2011) CIVIL APPEAL NO(s).2718 OF 2018 (arising out of SLP(C) No. 133/2011) CIVIL APPEAL NO(s).2720 OF 2018 (arising out of SLP(C) No. 367/2011) CIVIL APPEAL NO(s).2721 OF 2018 (arising out of SLP(C) No. 370/2011) CIVIL APPEAL NO(s).2719 OF 2018 (arising out of SLP(C) No. 378/2011) CIVIL APPEAL NO(s).2722 OF 2018 (arising out of SLP(C) No. 2623/2011) CIVIL APPEAL NO(s).2724 OF 2018 (arising out of SLP(C) No. 2745/2011 CIVIL APPEAL NO(s).2726 OF 2018 (arising out of SLP(C) No. 4096/2011) CIVIL APPEAL NO(s).2723 OF 2018 (arising out of SLP(C) No. 2744/2011) CIVIL APPEAL NO(s).2725 OF 2018 (arising out of SLP(C) No. 3283/2011) CIVIL APPEAL NO(s).2727 OF 2018 (arising out of SLP(C) No. 5382/2011) CIVIL APPEAL NO(s).2729 OF 2018 (arising out of SLP(C) No. 17102/2011) CIVIL APPEAL NO(s).2730 OF 2018 (arising out of SLP(C) No. 17667/2011) CIVIL APPEAL NO(s).2731 OF 2018 (arising out of SLP(C) No. 19992/2012) CIVIL APPEAL NO(s).2732 OF 2018 (arising out of SLP(C) No. 19993/2012) 2 CIVIL APPEAL NO(s).2733 OF 2018 (arising out of SLP(C) No. 17428/2015) CIVIL APPEAL NO(s).2734 OF 2018 (arising out of SLP(C) No. 29755/2013) CIVIL APPEAL NO(s).2735 OF 2018 (arising out of SLP(C) No. 17430/2015) CIVIL APPEAL NO(s).2736 OF 2018 (arising out of SLP(C) No. 17431/2015) CIVIL APPEAL NO(s).2740 OF 2018 (arising out of SLP(C) No. 37702/2016) CIVIL APPEAL NO(s).2739 OF 2018 (arising out of SLP(C) No. 36157/2016) CIVIL APPEAL NO(s).2737 OF 2018 (arising out of SLP(C) No. 34865/2016) CIVIL APPEAL NO(s).2738 OF 2018 (arising out of SLP(C) No. 34866/2016) CIVIL APPEAL NO(s).2741 OF 2018 (arising out of SLP(C) No. 4122/2017) CIVIL APPEAL NO(s).2742 OF 2018 (arising out of SLP(C) No. 4126/2017) CIVIL APPEAL NO(s).2743 OF 2018 (arising out of SLP(C) No. 12234/2017) CIVIL APPEAL NO(s).2766­2767 OF 2018 (arising out of SLP(C)Nos.6582­6583/2018 @ Diary No(s). 14603/2017) CIVIL APPEAL NO(s).2747 OF 2018 (arising out of SLP(C) No. 19340/2017) CIVIL APPEAL NO(s).2744 OF 2018 (arising out of SLP(C) No. 18935/2017) CIVIL APPEAL NO(s).2768­2769 OF 2018 (arising out of SLP(C)Nos.6585­6586 @ Diary No(s). 14672/2017) CIVIL APPEAL NO(s).2771­2772 OF 2018 (arising out of SLP(C)Nos.6587­6588/2018 @ Diary No(s). 14675/2017) CIVIL APPEAL NO(s).2770 OF 2018 (arising out of SLP(C)No.6589/2018 @ Diary No(s). 14674/2017)  2746     OF 2018   CIVIL APPEAL NO(s). (arising out of SLP(C) No. 18944/2017)   OF 2018   CIVIL APPEAL NO(s). (arising out of SLP(C) No. 18943/2017)  2745   3   CIVIL APPEAL NO(s).  2765     OF 2018 (arising out of SLP(C)No.6550/2018 @ Diary No(s). 18867/2017) JUDGMENT


Delay condoned.   Leave granted in all the Special Leave Petitions.  2. A common question of law arises for consideration in this batch   of   appeals,   whether   certain   receipts   by   co­operative societies,   from   its   members   i.e.   non­occupancy   charges, transfer charges, common amenity fund charges and certain other   charges,   are   exempt   from   income   tax   based   on   the doctrine of mutuality.  The challenge is based on the premise that   such   receipts   are   in   the   nature   of   business   income, generating   profits   and   surplus,   having   an   element   of commerciality and therefore exigible to tax.   The  assessee  in Civil   Appeal   No.1180   of   2015   assails   the   finding   that   such receipts, to the extent they were beyond the limits specified in 4 the   Government notification  dated   09.08.2001  issued  under Section 79­A of the Maharashtra Co­operative Societies Act, 1960 (hereinafter referred to as ‘the Act’) was exigible to tax falling beyond the mutuality doctrine.  3. The primary facts, for better appreciation shall be noticed from SLP (C) No.30194 of 2010.   The assessing officer held that receipt of non­occupancy charges by the society from its members, to the extent that it was beyond 10% of the service charges/maintenance   charges   permissible   under   the notification   dated   09.08.2001,   stands   excluded   from   the principle of mutuality and was taxable.  The order was upheld by the Commissioner of Income Tax (Appeals).   The Income Tax   Appellate   Tribunal   held   that   the   notification   dated 09.08.2001   was   applicable   to   co­operative   housing   societies only and did not apply to a premises society.   It further held that   the   transfer   fee   paid   by   the   transferee   member   was exigible to tax as the transferee did not have the status of a member   at   the   time   of   such   payment   and,   therefore,   the principles   of   mutuality   did   not   apply.     The   High   Court   set 5 aside the finding that payment by the transferee member was taxable while upholding taxability of the receipt beyond that specified in the government notification.  4.  Shri   K.R.   Radhakrishnan,   learned   senior   counsel appearing   on   behalf   of   the   Revenue   in   all   the   appeals, submitted that the receipts were exigible to tax no sooner that mutuality came to an end and the receipts had an element of profit, also generating a surplus, rendering commerciality to the nature of the activity.   The benefit of a common identity between the contributors and the participants could not alone be  the  final test.     The  Tribunal  had  correctly held  that the transferee not being a member at the time of  payment, the doctrine of mutuality had no application to such receipts. The principle   of   mutuality   could   not   be   invoked   to   prevent taxability of high value receipts by a society selling properties and   then   inducting   such   purchasers   as   members.       The validity   of   the   notification   dated   09.08.2001   having   been upheld   by   the   Bombay   High   Court   in  The   New   India   Co­ operative Housing Society vs. The State of Maharashtra, 6 2013 (2) MHLJ 666, any receipt by the society beyond that permissible   in   the   law   under   the   notification,   was   not   only illegal, but also amounted to rendering of services for profit attracting an element of commerciality and thus was taxable. It   stands   to   reason   that   if   the   society   levied   maintenance charge   upon   a   resident   member   at   the   rate   of   Rs.1.35   per sq.ft./p.m. and charged the much higher rate of Rs.7/­ per sq.ft./p.m. as non­occupancy charges from others, the society was acting commercially to earn profit. Reliance was placed on Commissioner of Income Tax, Madras vs. Kumbakonam Mutual Benefit Fund Ltd., AIR 1965 SC 96 = (1964) 8 SCR204  Chelmsford  Club   vs.  Commissioner   of  Income Tax, (2000) 3 SCC 214.  5. Sri Radhakrishnan, sought to invoke Article 43B of the Constitution of India mandating professional management of co­operative societies, to justify taxability of receipts beyond that permissible under the government notification. Reliance was further placed on Article 243ZI to submit that economic participation   had   to   be   restricted   to   members   and   had   no 7 application to a transferee who was not a member, rendering receipt from them sans mutuality taxable.  6. The   submission   on   behalf   of   the   respondents   shall   be considered cumulatively for convenience except to the extent necessary.   Relying   on  Mittal Court Premises Co­operative Society Ltd. vs. Income Tax  Officer,  (2010)   320   ITR   414 (Bom), it was submitted that the notification dated 09.08.2001 was   restricted   in   its   application   to   housing   co­operative societies only and had no application to a premises Society. Any   receipt   by   the   latter   beyond   the   same   was   thus   not exigible to tax on that ground.  7. The   receipt   by   a   housing   co­operative   society   of   an amount   beyond   that   mentioned   in   the   notification   dated 09.08.2001, if it was contrary to the law, would be actionable at the instance of the person required to pay such charges as was   the   case   in  The   New   India   Co­operative   Housing Society  (supra).   Such receipts will not be exigible to tax so long   as   the   doctrine   of   mutuality   stood   satisfied   by 8 commonality   of   identity   between   the   contributors   and   the participants,   and   the   contribution   by   the   members   was utilised for the common benefit of all the members.   8.  The   receipt   of   transfer   fee   before   induction   to membership under some of the bye­laws shall not be liable to tax as the money was returned in the event that the person was not admitted to membership.   The appropriation by the society took place only after admission to membership.  Once a person was admitted to membership, the members forming a class,   and   the   identity   of   the   individual   member   being irrelevant,   the   principle   of   mutuality   was   automatically attracted.   The receipt essentially was from a member and the fact that for convenience, part of it may have been paid by the transferee,   was   irrelevant   as   ultimately   the   amount   was utilised for the mutual benefit of the members including the fresh inductee member.  9. Likewise,   non­occupancy   charges   were   levied   for   the purpose of general maintenance of the premises of the Society and provision of other facilities and general amenities to the 9 members.   The fact that such members who were not in self occupation   may   have   had   to   pay   at   a   higher   rate   was irrelevant so long as the receipts were utilised for the benefit of the members as a class.   It is not the case of the Revenue that such receipts had been utilised for any purpose other than the common benefit of the members.  Even if any amount was left over as surplus at the end of the financial year after meeting maintenance   and   other   common   charges,   that   would constitute   surplus   fund   of   the   society   to   be   used   for   the common benefit of members and to meet heavy repairs and other contingencies and will not partake the character of profit or commerciality so as to be exigible to tax.

10. Relying   on  Commissioner   of   Income   Tax­21   vs.   Jai Hind Co­operative House Construction Society, (2012) 349 ITR 541 (Bom), it was contended that premium receipts by a housing society for allowing a member to construct using extra FSI   was   also   not   taxable   on   principles   of   mutuality   as   the receipts   were   utilised   by   the   society   for   maintenance   and 10 infrastructure including to defray the extra burden on account of the additional FSI constructed.  11.  Fresh construction by a society itself, utilising extra FSI available,  with  grant  of  occupancy   rights   only  to a  member who may have had to pay more as membership fees than an existing member, will likewise not detract from the principle of mutuality as the contribution was ultimately to be used for the maintenance, repairs and facilities to members in the society including   the   additional   construction.     There   could   be   no bifurcation between the receipts and costs to deny exemption to the extent paid by the new members to qualify the same as non­mutual. Crucially, the admission to membership preceded the payment and allotment of premises was done by draw of lottery.

12. It was next submitted that every receipt could not  ipso facto  be   classified   as   income,   relying   on  Commissioner   of Income Tax, Mumbai vs. D.P. Sandhu Bros. Chembur (P) Ltd.,  (2005)   273   ITR   1   (SC).     Referring   to  CIT   vs.   Royal 11 Western   India   Turf   Club   Ltd.,   AIR   1954   SC   85,   it   was submitted   that   so   long   as   the   three   tests   to   determine mutuality and commonality of interests were met, there could not be exigiblity to tax under the general understanding of the doctrine of mutuality that a person could not make a  profit from himself.  Reliance was also placed on Commissioner of Income Tax, Bihar vs. M/s. Bankipur Club Ltd., (1997) 226 ITR 97 (SC ) =  (1997) 5 SCC 394 and  Bangalore Club vs. Commissioner of Income Tax and Another, (2013) 350 ITR509?(SC)= (2013) 5 SCC 509.

13. We   have   considered   the   submissions   on   behalf   of   the parties.

14. The   doctrine   of   mutuality,   based   on   common   law principles,   is   premised   on   the   theory   that   a   person   cannot make a profit from himself. An amount received from oneself, therefore, cannot be regarded as income and taxable.  Section 2(24)   of   the   Income   Tax   Act   defines   taxable   income.   The income   of   a   co­operative   society   from   business   is   taxable 12 under   Section   2(24)(vii)   and   will   stand   excluded   from   the principle   of   mutuality.   The   essence   of   the   principle   of mutuality lies in the commonality of the contributors and the participants who are also the beneficiaries.   The contributors to   the   common   fund   must   be   entitled   to   participate   in   the surplus and the participators in the surplus are contributors to the common fund.   The law envisages a complete identity between the contributors and the participants in this sense. The principle postulates that what is returned is contributed by   a   member.     Any   surplus   in   the   common   fund   shall therefore not constitute income but will only be an increase in the   common   fund   meant   to   meet   sudden   eventualities.     A common   feature   of   mutual   organizations   in   general   can   be stated to be that the participants usually do not have property rights to their share in the common fund, nor can they sell their share.   Cessation from membership would result in the loss of right to participate without receiving a financial benefit from the cessation of the membership.  13 15. The   doctrine   of   mutuality   based   on   common   law   is predicated   on   the   principles   enunciated   in  Styles   vs.   New York Life Insurance Company, (1889) 2 T.C. 460, by Lord Watson in the House of Lords in the following words:

“When   a   number   of   individuals   agree   to contribute   funds   for   a   common   purpose, such   as   the   payment   of   annuities   or   of capital sums, to some or all of them, on the   occurrence   of   events   certain   or uncertain,   and   stipulate   that   their contributions,   so   far   as   not   required   for that   purpose,   shall   be   repaid   to   them,   I cannot   conceive   why   they   should   b regarded as traders, or why contributions returned   to   them   should   be   regarded   as profits.”

16.  In Bankipur Club Ltd. (supra), considering the surplus of   receipts   over   expenditure   generated   from   the   facilities extended by a club to its members and its exemption from tax on principles of mutuality, it was observed :­  “20……..In all these cases,  the appellate tribunal as   also   the   High   Court   have   found   that   the amounts received by the clubs were for supply of drinks,   refreshments   or   other   goods   as   also   the letting   out   of   building   for   rent   or   the   amounts received   by   way   of   admission   fees,   periodical 14 subscription   etc.   from   the   members   of   the   clubs were   only   for/towards   charges   for   the   privileges, conveniences   and   amenities   provided   to   the members, which they were entitled to as per the rules and regulations of the respective clubs. It has also   been   found   that   different   clubs   realised various sums on the above counts only to afford to their   members   the   usual   privileges,   advantages, conveniences and accommodation. In other words, the services offered on the above counts were not done with any profit motive and were not tainted with commerciality. The facilities were offered only as   a   matter   of   convenience   for   the   use   of   the members (and their friends, if any, availing of the facilities occasionally). 21.  In   the   light   of   the   above   findings,   it necessarily follows that the receipts for the various facilities extended by the clubs to their members, as   stated   hereinabove   as   part   of   the   usual privileges, advantages and conveniences, attached to the membership of the club, cannot be said to be “a   trading   activity”.   The   surplus   —   excess   of receipts over the expenditure  as a result of mutual arrangement, cannot be said to be “income” for the purpose of the Act.”

  17.  In Bangalore Club (supra), after referring to Styles, the doctrine of mutuality was explained further as follows :­ “8………..The principle relates to the notion that a person   cannot   make   a   profit   from   himself.   An amount   received   from   oneself   is   not   regarded   as income and is therefore not subject to tax; only the income   which   comes   within   the   definition   of Section 2(24) of the Act is subject to tax [income from business involving the doctrine of mutuality is 15 denied   exemption   only   in   special   cases   covered under clause (vii) of Section 2(24) of the Act].. The concept of mutuality has been extended to defined groups of people who contribute to a common fund, controlled by the group, for a common benefit. Any amount   surplus   to   that   needed   to   pursue   the common purpose is said to be simply an increase of   the   common   fund   and   as   such   neither considered   income   nor   taxable……..  A   common feature of mutual organisations in general and of licensed   clubs   in   particular,   is   that   participants usually do not have property rights to their share in the common fund, nor can they sell their share. And   when   they   cease   to   be   members,   they   lose their   right   to   participate   without   receiving   a financial   benefit   from   the   surrender   of   their membership……” 18.  In  The   Commissioner   of   Income   Tax   vs.   Common Effluent   Treatment   Plant,   (Thane   Belapur)   Association, (2010)   328   ITR   362   (Bom),   the   assessee,   an   incorporated association   under   Section   25   of   the   Companies   Act,   1956 comprising   of   industries   operating   in   the   Thane­Belapur region,   was   set   up   with   a   view   to   provide   a   centralised treatment facility for industrial effluents in view of the inability of each industrial unit to set up a separate effluent treatment facility. Chandrachud, J. (as he then was), speaking for the 16 Division   Bench,   applying   the   principles   of   mutuality   to   the surplus so generated not being exigible to tax, held :­ “10. ….The income of the assessee is contributed by   its   members.   The   assessee   has   been   formed specifically with the object of providing a common effluent facility to its members. The income is not generated out of dealings with any third party. The entire contribution originates in its members and is expended only in furtherance of the object of the Association   for   the   benefit   of   the   members.   On these facts, both the Commissioner (Appeals) and the   Tribunal   were   justified   in   coming   to   the conclusion   that   the   surplus   so   generated   falls within the purview of the doctrine of mutuality and was not exigible to tax….”

    19.  The proceedings in the present appeals relate to different assessment   years   based   on   information   gathered   by   the Assessing Officer pursuant to notice under Section 133(6) of the   Income   Tax   Act.     Transfer   charges   are   payable   by   the outgoing member.  If for convenience, part of it is paid by the transferee,   it   would   not   partake   the   nature   of   profit   or commerciality   as   the   amount   is   appropriated   only   after   the transferee   is   inducted   as   a   member.     In   the   event   of   non­ admission,   the   amount   is   returned.   The   moment   the 17 transferee is inducted as a member the principles of mutuality apply.   Likewise,   non­occupancy   charges   are   levied   by   the society   and   is   payable   by   a   member   who   does   not   himself occupy the premises but lets it out to a third person.   The charges   are   again   utilised   only   for   the   common   benefit   of facilities and amenities to the members.   Contribution to the common   amenity   fund   taken   from   a   member   disposing property is similarly utilised for meeting sudden and regular heavy   repairs   to   ensure   continuous   and   proper   hazard   free maintenance of the properties of the society which ultimately enures to the enjoyment, benefit and safety of the members. These charges are levied on the basis of resolutions passed by the society and in consonance with its bye­laws.  The receipts in the present cases have indisputably been used for mutual benefit   towards   maintenance   of   the   premises,   repairs, infrastructure and provision of common amenities.  20.  Any   difference   in   the   contributions   payable   by   old members and fresh inductees cannot fall foul of the law as sufficient classification exists.   Membership forming a class, 18 the   identity   of   the   individual   member   not   being   relevant, induction into membership automatically attracts the doctrine of   mutuality.     If   a   Society   has   surplus   FSI   available,   it   is entitled to utilise the same by making fresh construction in accordance with law.   Naturally such additional construction would   entail   extra   charges   towards   maintenance, infrastructure, common facilities and amenities.  If the society first inducts new members who are required to contribute to the   common   fund   for   availing   common   facilities,   and   then grants   only   occupancy   rights   to   them   by   draw   of   lots,   the ownership remaining with the society, the receipts cannot be bifurcated into two segments of receipt and costs, so as to hold the former to be outside the purview of mutuality classifying it as income of the society with commerciality.  21. Section   79A   of   the   Maharashtra   Co­operative   Societies Act reads as follows:

“79A. Government's power to give directions in the public interest, etc.­ (1) If the State Government, on receipt of a report from the Registrar or otherwise, is satisfied that in the public interest or for the purposes 19 of   securing   proper   implementation   of   co­operative production   and   other   development   programmes approved or undertaken by Government, or to secure the proper management of the business of the Society generally, or for preventing the affairs of the Society being   conducted   in   a   manner   detrimental   to   the interests of the members or of the depositors or the creditors thereof, it is necessary to issue directions to any   class   of   societies  generally   or   to   any   Society   or societies   in   particular,   the   State   Government   may issue   directions   to   them   from   time   to   time,   and   all societies or the societies concerned, as the case may be, shall be bound to comply with such directions. (2) The State Government may modify or cancel any directions   issued   under   subsection   (1),   and   in modifying   or   cancelling   such   directions   may   impose such conditions as it may deem fit. (3)   Where   the   Registrar   is   satisfied   that   any   person was responsible for complying with any directions or modified   directions   issued   to   a   Society   under   sub­ sections (1) and (2) and he has failed without any good reason or justification, to comply with the directions, the Registrar may by order­­ (a) if the person is a member of the committee of the   Society,   remove   the   member   from   the Committee   and   appoint   any   other   person   as member   of   the   committee   for   the   remainder   of the   term   of   his   office   and   declare   him   to   be disqualified to be such member for a period of six years from the date of the order: (b) if the person is an employee of the Society, direct the committee to remove such person from employment of the Society forthwith, and if any member or members  of the  committee,  without 20 any   good   reason   or   justification,   fail  to  comply with   this   order,   remove   the   members,   appoint other   persons   as   members   and   declare   them disqualified as provided in clause (a) above: Provided   that,   before   making   any   order   under   this sub­section,   the   Registrar   shall   give   a   reasonable opportunity of being heard to the person or persons concerned and consult the federal Society is affiliated. Any  order made by the  Registrar  under  this section shall be final.”

22. In  The   New   India   Co­operative   Housing   Society (supra), the challenge by the aggrieved was to the transfer fee levied   by   the   society   in   excess   of   that   specified   in   the notification,   which   is   a   completely   different   cause   of   action having no relevance to the present controversy.   It is not the case of the Revenue that such receipts have not been utilised for the common benefit of those who have contributed to the funds.  23.   The notification dated 09.08.2001 in the relevant extract reads as follows:­ 21 ORDER

In the exercise of the powers conferred upon the State Government under Section 79­A of the Maharashtra Co­operative Societies Act, 1960 following orders are hereby issued in the larger interests of the people in the State.

1)  Xxxxxx

2) The rate of premium to be charged for the transfer Flat/Premises as well as the rights and share in the share capital/property of the Co­operative Housing Society by a member in favour of another, should be determined at the General Meeting of the Society.

24. We do not find any reason to take a view different from that   taken   by   the   High   Court,   that   the   notification   dated 09.08.2001 is applicable only to co­operative housing societies and has no application to a premises society which consists of non­residential premises.  25.  Kumbakonam  (supra),   is   distinguishable   on   its   own facts.   The doctrine of mutuality was held to be inapplicable because the members who had not contributed to surplus as customers were nevertheless entitled to participate and receive part of the surplus.   In Chelmsford Club (supra), it was held 22 that there was no profit motive or sharing of profits as such amongst the members.  The surplus, if any, from the business was not shared by the members but was used for providing better facilities to the members.   There was a clear identity between the contributors and the participators to the fund and the recipients thereof. 26.  In the result, all appeals preferred by the Revenue are dismissed.   Civil   Appeal   No.1180   of   2015   preferred   by   the assessee society is allowed. …………………………...J.

(Rohinton Fali Nariman) ……………………………..J.

(Navin Sinha) New Delhi, March 12, 2018. 23 ITEM NO.1501 COURT NO.10 SECTION IX S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS C.A.No.2706/2018 @ SLP(C)No.30194/2010 (Arising out of impugned final judgment and order dated 11- 01-2010 in ITA No.680/2009 passed by the High Court Of Judicature At Bombay) INCOME TAX OFFICER,MUMBAI Petitioner(s) VERSUS VENKATESH PREMISES COOP.STY.LTD. Respondent(s) WITH C.A.No.3271/2012 (IX) C.A.No.3272/2012 (IX) C.A.No.3827/2012 (IX) C.A.No.1180/2015 (III) C.A.No.2997/2017 (III) C.A.No.8741/2017 (III) C.A.No.2708/2018 in SLP(C)No.32061/2010 (IX) C.A.No.2707/2018 in SLP(C)No.30195/2010 (IX) C.A.No.2713/2018 in SLP(C)No.32914/2010 (IX) C.A.No.2710/2018 in SLP(C)No.32913/2010 (IX) C.A.No.2709/2018 in SLP(C)No.32063/2010 (IX) C.A.No.2711/2018 in SLP(C)No.32065/2010 (IX) C.A.No.2712/2018 in SLP(C)No.34087/2010 (IX) C.A.No.2716/2018 in SLP(C)No.35120/2010 (IX) 24 C.A.No.2714/2018 in SLP(C)No.32918/2010 (IX) C.A.No.2715/2018 in SLP(C)No.34061/2010 (IX) C.A.No.2717/2018 in SLP(C)No.128/2011 (IX) C.A.No.2728/2018 in SLP(C)No.16967/2011 (IX) C.A.No.2718/2018 in SLP(C)No.133/2011 (IX) C.A.No.2720/2018 in SLP(C)No.367/2011 (IX) C.A.No.2721/2018 in SLP(C)No.370/2011 (IX) C.A.No.2719/2018 in SLP(C)No.378/2011 (IX) C.A.No.2722/2018 in SLP(C)No.2623/2011 (IX) C.A.No.2724/2018 in SLP(C)No.2745/2011 (IX) C.A.No.2726/2018 in SLP(C)No.4096/2011 (IX) C.A.No.2723/2018 in SLP(C)No.2744/2011 (IX) C.A.No.2725/2018 in SLP(C)No.3283/2011 (IX) C.A.No.2727/2018 in SLP(C)No.5382/2011 (IX) C.A.No.2729/2018 in SLP(C)No.17102/2011 (IX) C.A.No.2730/2018 in SLP(C)No.17667/2011 (IX) C.A.No.2731/2018 in SLP(C)No.19992/2012 (IX) C.A.No.2732/2018 in SLP(C)No.19993/2012 (IX) C.A.No.2733/2018 in SLP(C)No.17428/2015 (IX) C.A.No.2734/2018 in SLP(C)No.29755/2013 (IX) C.A.No.2735/2018 in SLP(C)No.17430/2015 (IX) C.A.No.2736/2018 in SLP(C)No.17431/2015 (IX) C.A.No.2740/2018 in SLP(C)No.37702/2016 (IX) C.A.No.2739/2018 in SLP(C)No.36157/2016 (IX) 25 C.A.No.2737/2018 in SLP(C)No.34865/2016 (IX) C.A.No.2738/2018 in SLP(C)No.34866/2016 (IX) C.A.No.2741/2018 in SLP(C)No.4122/2017 (IX) C.A.No.2742/2018 in SLP(C)No.4126/2017 (IX) C.A.No.2743/2018 in SLP(C)No.12234/2017 (IX) C.A.Nos.2766-2767/2018 @ SLP(C)Nos.6582-6583/2018 @ Diary No(s). 14603/2017 (IX) C.A.No.2747/2018 in SLP(C)No.19340/2017 (IX) C.A.No.2744/2018 in SLP(C)No.18935/2017 (IX) C.A.Nos.2768-2769/2018 @ SLP(C)Nos.6585-6586/2018 @ Diary No(s). 14672/2017 (IX) C.A.Nos.2771-2772/2018 @ SLP(C)Nos.6587-6588/2018 @ Diary No(s). 14675/2017 (IX) C.A.No.2770/2018 @ SLP(C)No.6589/2018 @ Diary No(s).14674/2017 (IX) C.A.No.2746/2018 in SLP(C)No.18944/2017 (IX) C.A.No.2745/2018 in SLP(C)No.18943/2017 (IX) C.A.No.2765/2018 @ SLP(C)No.6550/2018 @ Diary No(s).18867/2017 (IX) Date :

12. 03-2018 These petitions were called on for pronouncement of judgment today. For Petitioner(s) Mrs. Anil Katiyar,AOR Mr. B.V. Balaram Das,AOR Mr. Shiv Kumar Suri,Aor Mr. Shikhil Suri,Adv. Mr. Saswat Pattnaik,Adv. 26 For Respondent(s) Mr. Salil Kapoor,Adv. Mr. Sanat Kapoor,Adv. Mr. Sumit Lalchandani,Adv. Ms. Soumya Singh,Adv. Ms. Ananya Kapoor,Adv. Mr. Kislaya Parashar,Adv. Mr. Rajeev Sharma,Adv. Mr. Deepak Goel,Adv. Mr. Firasat Ali Siddiqi,Adv. Mr. A.D. Kumar,Adv. Mr. Anil Kr. Chopra,Adv. Mr. Siddhartha Chowdhury,AOR Ms. Nandini Gore,Adv. Ms. Sonia Nigam,Adv. Mr. Mandeep Kalra,Adv. Ms. Manik Karanjawala,Adv. For M/s. Karanjawala & Co.,AOR Mr. Pratap Venugopal,Adv. Ms. Surekha Raman,Adv. Ms. Niharika,Adv. Ms. Kanika Kalaiyarasan,Adv. For M/s. K.J.

John & Co.,AOR Mr. S. C. Birla,AOR Mr. Kamal Mohan Gupta,AOR Mrs. Shally Bhasin,AOR Mr. Nikhil Nayyar,AOR Mr. Rashmikumar Manilal Vithlani,AOR Mr. V.N. Raghupathy,AOR Mrs. V.D. Khanna,AOR Mr. Senthil Jagadeesan,AOR Hon'ble Mr. Justice Navin Sinha pronounced the Reportable judgment of the Bench comprising Hon'ble Mr. Justice Rohinton Fali Nariman and His Lordship. Delay condoned. Leave granted in all the SLPs. 27 The appeals preferred by the Revenue are dismissed and Civil Appeal No.1180/2015 preferred by the assessee-society is allowed in terms of the signed Reportable judgment. Pending application, if any, stands disposed of. (Sarita Purohit) (Suman Jain) Court Master Branch Officer (Signed Reportable judgment is placed on the file) 28

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