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2010 (12) TMI 672 - ITAT, AHMEDABADExemption u/s 11 - As per Assessing Officer, since the assessee has enjoyed income from the business of developing of land for industrial purposes and allotted the land to industries on lease as well as charging consideration in case of transfer of land, therefore, not entitled for the deduction u/s. 11 of the Act - This section, prohibits the exclusion of the business income though there may be difference of opinion about the computation of such a business income between the Trustee and the Assessing Officer - this is merely a machinery section through which a computation is to be made in respect of the income which is excessive and earned from business activity and not meant for the purposes of the trust and on the basis of such a finding the same can be deemed to be a taxable income - Since the income of the assessee is subject to tax under IT Act and do not fall under the exempted clauses of Article 289(1) of Indian Constitution, therefore, the case law cited by the Revenue is not of much assistance whether the activities of this assessee can be said to be governed by section 2(15) wherein an expression is “any other object of general public utility - Describing the functions of the Corporation, it was mentioned that proper planning is absolutely necessary for creation of an Industrial Area - held that such authorities being constituted by law for facilitating all kinds of development of cities, towns and villages for public purposes, therefore should not be subjected to the liability to pay income tax, hence, entitled to exempt from tax u/s.10(20A) of the I.T.Act - it was held that such authorities being constituted by law for facilitating all kinds of development of cities, towns and villages for public purposes, therefore should not be subjected to the liability to pay income tax, hence, entitled to exempt from tax u/s.10(20A) of the I.T.Act - Decided in favour of the assessee whether there was any implication or importance of granting registration u/s.12AA of the I.T.Act to this assessee - it is evident that though the Assessing Officer has computed the profits on transfer of land or plots but it was not the case that the profits so generated were not within the main provisions of section 11 of the I.T.Act - it is also worth to note that the surplus, if any, remained with the assessee has to be invested as per the guidelines and the norms set out under GID Act - Appeal is allowed Regarding premium price on lease of plot, recoveries made towards factory shed and workers’ quarters - there is no scope to invoke the provisions of section 11(4) on the net profit so calculated by the Assessing Officer - Held that: the profit so computed by the Assessing Officer cannot be said to be an excessive income not meant or utilized for the object of the trust for the purpose of invocation of section 11(4) of the I.T.Act - Decided in favour of the assessee Regarding subsidy - A categorical findings was given that the appellant is a channelizing agency and the subsidy so received were meant for specific purpose, therefore, not to be taxed in the hands of the assessee - it is also worth to note that, in case, subsidy so received is not utilized, then it is also subject to refund back to sanctioning authority - Held that: subsidy in question is not subject to tax in the hands of the assessee
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