Gujarat Institute Of Housing And Estate ... vs Assessee
- CitationI.T.A No.1051-56/Ahd/2015) Page No 2
Ratio decidendi
The rule this decision rests on
This is an interlocutory order on stay petitions, and the Tribunal does not decide the mutuality question on the merits. The reasoning it does give rests on the following. On a stay application, the Tribunal's threshold inquiry is whether the assessee has established a prima facie case on merit; where it has, the outstanding demand may be stayed on conditions. The Tribunal found such a prima facie case on the assessee's contention that the concept of mutuality applies to exclude the additions made. Where the interest component of the demand is excluded and the TDS and taxes paid are credited to the assessee cumulatively across the assessment years, the net outstanding demand may be treated as substantially reduced, and this computation may properly inform the terms on which a stay is granted. Stay of demand is conditional on the assessee making a specified part-payment within a fixed time and on the assessee's compliance with a timetable for listing and the production of paper books, with no adjournment save in unavoidable circumstances.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
M/s.The Gujarat Institute of Deputy Director of Income Housing and Estate Tax, Exemption, Developers, GIHED Bhavan Vs Ahmedabad site Office, Gihed Lane, Nr. 2 n d Floor, Nature view Maple county, B/h, Ornet building, Off Ashram Road, Park, Pakwan-Sindhu Ahmedabad (Respondent) Bhavan Road, Shilaj, Ahmedabad PAN:AAATT4761F (Appellant)
Assessee by: Shri S.N. Soparkar, A.R. Revenue by: Shri M.K. Singh, Sr.D.R.
Date of hearing : 05-06-2015 Date of pronouncement : 5-06-2015
आदे श/ORDER
PER : RAJPAL YADAV, JUDICIAL MEMBER:-
The present six stay applications are being directed at the instance of assessee for grant of ad-interim stay of the outstanding demand cumulatively in all six years at Rs. 3,39,98,493/-. Stay Petition No. 61-66/Ahd/2015 (In I.T.A No.1051-56/Ahd/2015) Page No 2 Gujarat institute of Housing and Estate Developers vs. DCIT
2. The learned counsel for the assessee has compiled the details in a tabular form, exhibiting assessment year, income determined, by the Assessing Officer as per assessment order, taxes payable by the assessee, interest, credit of TDS/140A (self-assessment tax), total demand, demand paid, balance demand payable, credit of the taxes to be given and actual demand of taxes. For appreciating controversy in more scientific way, we deem it appropriate to treat these details as part of this order as annexure A. The contention of the assessee is that the assessee, Gujarat Institute of Housing Estate Developers was an AOP under NTC till its conversion into section 25 company under Companies Act, 1956. It has submitted its return and contended that the company operates on the principle of mutuality. It is a mutual concern namely; (a) there is complete identity between contributors and participators in companies' activities. (b) the action of participators are in furtherance of mandate of the company. The object of the company was to promote commerce, art, science, religion, charity or any other useful objects. While apprising Assessing Officer, the concept of mutuality, assessee wrote a letter dated 25-03- 2013, the relevant contention of the assessee in this letter read as under:-
''Further the GIHED is a Mutual Concern. In Mutuality, the cardinal requirement is that all the participators to the common fund are also contribution and their identity is established, then the test of mutuality is satisfied. The contributors to the common fund and the participators in the surplus must be an identical body. That does not mean that each member should contribute to the common fund or that each member should participate in the surplus or get back from the surplus precisely what he has paid. What is required is that the members as a class should contribute to the common fund and participators as a class must be able to participate in the surplus. It is immaterial whether the surplus is paid back to the members in cash or is put to reserve for development of the company and for providing better amenities to its members. Stay Petition No. 61-66/Ahd/2015 (In I.T.A No.1051-56/Ahd/2015) Page No 3 Gujarat institute of Housing and Estate Developers vs. DCIT
Further, the principle does not prevent a mutual association from engaging with outsiders because, in that case, the association must be deemed to be doing activities, not with itself but with others who are different entities and there, the income earned shall bear tax. The application of the principle of mutuality is not destroyed by the presence of transactions with, or profits derived from non-members. The two activities, in appropriate cases, be separated and the profits if any from the members can be taken for exemption on the basis of the actual from the accounts or at any rate by an estimate if it should become necessary.
Furthermore, the incorporation of the assessee as a company does not result in the deprivation of the admissibility of the claim for the exemption based on the concept of mutuality.''
3. According to the asssessee, the concept of mutuality is applicable and the additions ought to have not been made to the income of the assessee. On the other hand, ld. Departmental Representative has relied upon the orders of authorities below.
4. On due consideration of the facts, we are of the view that assessee has a prima facie case on merit. If interest component is excluded and credit of TDS and taxes paid is to be given to the assessee cumulatively in all these assessment years then the total outstanding demand representing for these 6 years will remain at Rs. 73,53,799/-. We allow these miscellaneous applications subject to following conditions:
(a) The outstanding demand shall remain stayed in all the assessment years for a period of 180 days from today or till the disposal of these appeals whichever event occurs first. The assessee shall make a payment of Rs. 25 lacs on or before the 15th July.
(b) The registry is directed to list all these appeals on 6th August, 2015. The assessee shall submit all necessary paper books before Stay Petition No. 61-66/Ahd/2015 (In I.T.A No.1051-56/Ahd/2015) Page No 4 Gujarat institute of Housing and Estate Developers vs. DCIT
the date of hearing. The asssessee shall not seek any adjournment except unavoidable circumstances warrant so.
Order pronounced in the open court on 5-06-2015
Sd/- Sd/-
(S.N. SAINI) (RAJPAL YADAV) ACCOUNTANT MEMMBER JUDICIAL MEMBER Ahmedabad : Dated 5/06/2015 ak आदे श क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदे श से, उप/सहायक पंजीकार आयकर अपील य अ धकरण, अहमदाबाद
Strengthened preparation & delivery of orders in the ITAT
1) Date of dictation 05/06/2015
2) Direct on which the typed draft is placed 05/06/2015 before the Dictating Member & Other Member
3) Date on which the approved draft comes to /06/2015 the Sr. P.S./P.S.
4) Date on which the fair order is placed before the Dictating Member for pronouncement
5) Date on which the fair order comes back to the Sr. P.S./P.S.
6) Date on which the file goes to the Bench 9/6/2015 Clerk
7) Date on which the file goes the Head Clerk
8) Date on which the file goes to the Assistant Registrar for signature on the order
9) Date of Dispatch of the order
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