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2022 (5) TMI 1389 - UTTARAKHAND HIGH COURTExemption of property and income of a State from Union taxation - Mussoorie Dehradun Development Authority - scope of separate entity/legal identity - collection of levies in the nature of fees, charges, tax etc. imposed by the State through an enactment, namely U.P. Urban Planning and Development Act, 1973 - HELD THAT:- As apparent from the record that Mussoorie Dehradun Development Authority, constituted under the U.P. Urban, Planning & Development Act, 1973, is a separate entity and distinct from the State, having its own legal identity. It is a corporate body. It can sue or be sued in its own name. It has its own assets, liabilities. But only when the State Government decides that the purpose of the Development Authority has been achieved, and there is no need for continuance of such Authority, then it may pass the order of dissolution of the same. In that event, the income, assets, liabilities of the Authority will vest with the State Government, and not otherwise. Thus, it is apparent from the record that the Hon’ble Supreme Court has already dealt with this matter, and we, are in deference to the observations made by the Hon’ble Supreme Court in the case of Adityapur Industrial Area Development Authority [2006 (5) TMI 61 - SUPREME COURT] come to the conclusion that substantial Question Nos. ‘a’ and ‘b’ are already covered, and there is no need to further agitate with the issue. Amount that has been collected for infrastructure development is being spent on infrastructure development, and it should also be excluded from the income o the basis of doctrine of diversion of income by overriding title - We make it clear that the earlier observations regarding substantial Question Nos. ‘a’ and ‘b’ also cover this issue. Any fees collected for infrastructure development by the Development Authority will be treated as income and the expenses incurred by the Authority for the purposes of infrastructure development would be deducted from the income, and the rest is taxable, and that has been done, and in fact, this issue was not at all raised before the first and second appellate authorities. We find it appropriate to mention herein that before the ITAT, the only ground that has been taken by the assessee is as under:- “That on the facts and in the circumstances of the case and in law, the authorities below erred in holding that the claim of the appellant that there was diversion by overriding title in respect of infrastructure contribution is untenable.” However, by filing these appeals before this Court, the assessee has developed its case, and included the substantial Question No. ‘C’, and that is also a good ground to dismiss the appeals. Thus, in the conspectus of the facts of the case, and the law applicable to this case, along with the ratio decided by the Hon’ble Supreme Court in the case of Adityapur Industrial Area Development Authority (supra), we are of the opinion that there is no merit in these appeals, and the same are, hereby, dismissed.
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