A two-judge bench of the Supreme Court, on Tuesday, held that the transfer charges, non-occupancy charges and common amenity fund charges and certain other charges, collected by Co-operative Societies from Its members are not subject to income tax since the principle of mutuality applies to all these cases. A bench of Justices R F Nariman and Navin Sinha was hearing a bunch of cases wherein the sole issue for consideration was that whether the above receipts by cooperative societies, from its members, are exempt from income tax based on the doctrine of mutuality. Earlier, the ITAT 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 said order was quashed by the High Court on appeal. aggrieved by the order, the Revenue approached the Top Court.
As carried in TS