Pancharatna asked to pay Rs 2.66 crore in tax
The diamond hub calls the tax demand unjustified and would appeal against it, reports Manish Pachouly.india Updated: Jan 06, 2007 17:45 IST
The income tax (I-T) authorities have asked the diamond hub Pancharatna Cooperative Housing Society in Opera House to pay Rs 2.66 crore in tax for two assessment years — 2002-03 and 2004-05.
The I-T authorities passed assessment orders to this extent and served it to the society about a week back. However, the society has taken objection on the levy of tax on some heads like general maintenance, non-occupancy charges, lift modernisation expenses.
Naresh Mehta, Secretary of the society told HT that they would move before the Commissioner of Income Tax (CIT) (Appeal) for a stay and further hearing. They have been given a month's time for appeal by the assessment wing of the department.
The trouble for the society started when they were asked to pay Rs 1.44 crore as tax for the year 2002-03 and Rs 1.22 crore for 2004-05. The tax was charged on the collections by the society from general maintenance, repair, renovation funds, charges received by it from society members who changed their properties from residence to commercial status, expenditure on lift modernisation, additional sinking fund, additional maintenance fund, additional beautification fund and miscellaneous income.
Mehta said that the society is a no profit no loss making body and hence no tax should be levied on it. He objected to the levy of tax on various heads particularly maintenance, outstanding maintenance and expenditure of about Rs 40 lakh on lift modernisation.
He further claimed that the society has also to get refund of about Rs 46 lakh for the year 2001-02 when they were asked to pay Rs 92 lakh as tax. "We paid the tax but moved the CIT (Appeal) which gave us a relief of 50 per cent in 2005. This amount is to be refunded but the I-T authorities have moved to the I-T tribunal and the case is pending," said Mehta.
Mehta added that the society charges minimum maintenance rate which is Rs 3.5 per square feet for commercial and 75 paise per square feet for residential.
The 25 storeyed building has 680 members of which about 20 are residential. Mehta said that if taxes are charged in such a manner, maintenance in the society would go up to Rs 8 or Rs 9 per square feet.