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2023 (5) TMI 1217 - AT - Income TaxExemption u/s 11 denied - exemption in the previous years had been allowed by the ITAT and approved by P H High Court - whether CIT(A) ought to have allowed this exemption as a judicial discipline - whether the activities of the Assessee-Trust are charitable in nature entitling the Assessee to exemption u/s 11? - Tribunal held that the activity of the appellant was in the nature of trade commerce or business and hence it cannot be regarded as activity for charitable purpose in view of the proviso to section 2(15) of the Income-tax Act 1961? HELD THAT - As w.e.f. 1.4.2004 a new section i.e. section 10 (46A) is slated to be incorporated in the Income Tax Act so as to exempt any income arising to a body or authority or Board or Trust or Commission not being a company which has been established or constituted by or under a Central of State Act with one or more of the following purposes i.e. dealing with and satisfying the need for housing accommodation;planning development or improvement of cities towns and villages; regulating or regulating and developing any activity for the benefit of the general public; or regulating any matter for the benefit of the general public arising out of the object for which it has been created We find that our view is supported by the decision in the case of CIT (Exemptions) vs. Gujarat Industrial Development Corporation 2023 (4) TMI 392 - GUJARAT HIGH COURT wherein the Hon ble Gujarat High Court following the decision of the Hon ble Supreme Court in the case of Ahmedabad Urban Development Authority 2022 (10) TMI 948 - SUPREME COURT has dismissed the appeal filed by the Revenue holding that the matter is squarely covered by the decision of the Hon ble Supreme Court and no question of law much less any substantial question of law arises for consideration. It is relevant to note that in the said case the Senior Standing Counsel appearing for the Revenue fairly submitted that the decision rendered in the case of Ahmadabad Urban Development Authority (supra) would govern the case of the assessee. We therefore find that the Revenue has also accepted the decision of the Hon ble Supreme Court as applicable in the case of Gujarat Industrial Development Corporation which is also a statutory corporation constituted under the Gujarat Industrial Development Act for the purpose of securing and assisting rapid and orderly establishment and organisation of industrial areas and industrial estates in the State of Gujarat. Conclusion (a) For A.Y. 2011-12 the Hon ble High Court has granted exemption to the Assessee trust under section 11 of the Income Tax Act. (b) The Civil Appeal of the Department against the said High Court judgement has been rejected by the Hon ble Supreme Court. (c) The Hon ble High Court has held the Assessee s activity of sale of plots and premises even at market price not to be a commercial or business venture per se but to be necessitated by the statutory mandate of the Punjab Town Improvement Act 1922 i.e. the mother statute qua the Assessee trust. (d) Facts for the year under consideration i.e. A.Y. 2016-17 not having undergone any change at all from the facts in A.Y. 2011-12 the judgement of the Hon ble High Court for A.Y. 2011-12 as approved by the Hon ble Supreme Court in Ahmedabad Urban Development Authority 2022 (10) TMI 948 - SUPREME COURT is squarely applicable to the year under consideration that is A.Y. 2016-17. (e) Therefore the second proviso to section 2 (15) and consequently section 13 (8) of the Income Tax Act are held not applicable to the Assessee s case and so the aggregate receipts of the Assessee trust from its activities of sale of plots flats and commercial booths and also its income earned form non-construction fee transfer fee penal interest and compounding fee etc. are held to be entitled for exemption under section 11 of the I.T. Act. Such exemption is allowed to the Assessee. (f) The Order under appeal is thus reversed and cancelled on accepting the grievance of the Assessee. Assessee appeal allowed.
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