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2017 (1) TMI 945 - ITAT AHMEDABAD

2017 (1) TMI 945 - ITAT AHMEDABAD - TMI - Eligibility to exemption u/s 11 - charitable activity - objects to achieve - Held that:- The advancement of any object of benefit to the public or a section of the public as distinguished from individual and group of individuals would be a charitable purpose. An object of public utility need not be an object in which the whole of the public is interested. It is sufficient if well defined section of the public benefits by the objects which means that the .....

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n our considered view, there was no material which may suggest that the appellant company was conducting its affairs solely on commercial lines with a motive to earn profit. There is also no material brought on record which could suggest that the appellant company deviated from its objects for which it has been constituted. In our humble opinion and understanding of law, the proviso to Sec. 2(15) of the Act is not applicable on the facts of the case. - Decided in favour of assessee - ITA. Nos. 2 .....

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2011-12. 2. Although the appeals of the assessee are against three separate orders, the underlying issues in all these appeals are identical and, therefore, all these appeals are disposed of by this common order for the sake of convenience. 3. We heard the appeal in ITA No. 278/Ahd/2013 pertaining to A.Y. 2009-10 and it was agreed by the representatives of both sides that the underlying facts in issues are identical in all the captioned appeals. 4. The appellant company was constituted pursuant .....

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urposes connected with the matters aforesaid . 5. For the Assessment Year 2009-10, the appellant company filed return of income showing total deficit at ₹ 607.87 crores. In the statement of income, the assessee has shown gross total income at ₹ 393.15 crores. Total application of funds was shown at ₹ 1045.86 crores and total loss was worked out at ₹ 607.87 crores. The A.O. denied the claims made by the assessee by making the following observations. 5. It is further observ .....

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ate the allottees for establishing industries. The assessee claims its income to be exempt u/s. 11 of the Act; therefore, its income is assessable u/s 11(4) of the Income Tax Act. Therefore, the assessee was show caused as to why its income should not be assessed u/s. 11 (4) of the Act. 5.1 It is observed that the assessee has made submission on the similar line as that in earlier years. The issues in hand were seriously considered by the AO's in earlier years too. In the present assessment .....

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s is invested in other income yielding assets. It has also invested in a number of companies and has also purchased bonds and fixed deposits. In the Income and Expenditure Account, the assessee has shown interest from investment and deposits with banks, companies etc. at ₹ 195,45,52,106/-. It has also income from rent and building, water charges etc. at ₹ 173,78,00,353/-. The total income as per Income & Expenditure account arrives at ₹ 393,15,12,238/- and expenditure is sh .....

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ons are not acceptable as the assessee is enjoying income from business of developing land for industrial purposes and allotting land to industrialists on lease and is also charging consideration for land transferred to them and is also claiming its income to be exempt u/s. 11 of the Act. Therefore, in my opinion its income is assessable u/s. 11(4) of the Act for A.Y. 2009-10. It is pertinent to note here that this view has been confirmed by ld. CIT(A) in the assessee s own case for the A.Y. 200 .....

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held that no income is even assessable u/s. 11(4), it was also required to show cause why GIDC should not be denied any benefit of Section 11 and, thereafter its income be not computed under the normal provisions of the Act. 7. The assessee requested to raise an additional ground challenging the applicability of the proviso to Section 2(15) of the Act. 8. After considering the facts and the detailed submissions made by the assessee, the ld. CIT(A) observed as under:- 6. The main issue that requ .....

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e required to be decided. 6.1 Having considered the contentions of the appellant, on the issues above, it is clear that it is relying mainly on the following two arguments: (i) It is doing the activity of developing industrial estates and industry according to the mandate of the Government of Gujarat. (ii) It is not a trading corporation as defined under section 2(49) of the Companies Act and therefore, cannot be said to be engaged in business. It has to be understood that the revenue is not con .....

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he present proceedings is that its activities fall in first proviso to section 2(15) of the IT Act. The proviso reads as under: Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or applicat .....

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on is much broader than being engaged in trade or business. What it envisages and prohibits is even carrying out activities of that 'nature' for a cess or fee or any other consideration. Clearly, the legislation is excluding the carrying out of these activities (not only complete business or trade etc.) even though they may be for public utility, irrespective of the nature of use or application, or retention, of the income from such activity. The averment of the assessee that the profits .....

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;ble ITAT, Bench "C", Ahmedabad dated 03/12/2010 in ITA No.3252/Ahd/2009 for A.Y.2006-07 (the decision was given when the proviso to section 2(15) were not on the statute): 8.11. The crux of the decision is that even if a business undertaking is a property of the trust but if the business carried on is not meant to fulfill the objects of the trust, then also such a business income is out of the exemption clause. We think this is the purpose of the enactment of this section that out of .....

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expression would prima-facie include all objects which promote the welfare of the general public. One has to examine the primary purpose and the dominant object for which this corporation came into existence. Undisputedly it was formed to promote the welfare of the general public. As far as this aspect is concerned, we have nothing much to add but to follow the findings of Hon'ble Supreme Court pronounced in assessee's own case(supra) [227 ITR 414], The Hon'ble Apex Court has said t .....

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tution may have to be provided in such industrial complex. Therefore, development of an industrial area would have its direct impact on the development or improvement of that part of the city where such areas are located. Finally 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.l0(20A) .....

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f the assessee is to promote industry for the benefit of public at large and the income so generated on leasing out of the plots/land, the same has also been exclusively utilized for those listed objects of the Institution, therefore, there was no scope to invoke section 11(4) of the I.T.Act. There is no allegation of the Revenue Department that any part of the income/of the GIDC was misappropriated or exploited other than the obj4cts of the Trust. Only under a deeming provision it was held so. .....

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r manufacture or any adventure or concern in the nature of trade, commerce or manufacture; 13. The fervent argument of Ld.CIT Departmental Representative Mr. Jindal, in this regard, were that the definition of business is very wide as defined in the Act and this definition is also not exhaustive. As per his arguments this clause being an inclusive clause, therefore, not only the four items as enumerated in the definition, but the other activities if of the like nature shall also be reckoned in b .....

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ade. Purchase of land and sale of land being the primary activity of this organization can be said to be a business activity (emphasis supplied) but merely by holding that the undertaking is a "business undertaking" whether the profits arising therefrom can be subjected to tax by invoking section 11(4) of the I.T. Act? ........ Applying this test on the present set of facts of the case, it is evident that though the Assessing Officer has computed the profits on transfer of land or plot .....

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ss undertaking" but being no excess income was found utilised other than for the purposes of the object of the trust, hence, out of the ambits of the provision of section 11(4) of the l.T.Act. (emphasis supplied)" It is clear that the Hon'ble ITAT also considered the activities of the appellant to be 'business activity' but stated that the profits of business were utilized for the objects and in that year the charitable activity included business activities for the purpose .....

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t of applicability of section 10(20A) of the IT Act. The question was whether the object of the assessee was urban and rural development or not. The issue is not disputed at all. The judgments of the courts are to be understood and applied in the context of the facts. (CIT vs Sun Engg. Works Pvt Ltd- 198 ITR 327). Similarly, the decision in the case of Shri Ramtanu Co.Op. Housing Society Ltd.(supra) was on the issue of legality of land acquisition under that Act and what was considered was wheth .....

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the two concerns are there: "It is obvious that the Corporation will receive moneys for disposal of land, buildings and other properties and also that the Corporation would receive rents and profits in appropriate cases" Clearly, the activities of the appellant fall in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration. The activities of the appellant therefore .....

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workers' quarters 38,73,56,885 38,85,40,080 11,83,195 Total 434,64,77,848 Therefore, when the receipts are over 430 crore, the second proviso to section 2(15) does not come to the rescue of the appellant. Therefore, it is held that the activities of the assessee, for the assessment year under appeal are not for charitable purpose as defined under section 2(15) of the Act. The provisions of section 13(8) of the I.T. Act, as amended with effect from 01/04/2009, read as under: "8) Nothing .....

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the assessee is before us. The ld. Senior Counsel vehemently submitted that the First Appellate Authority have grossly erred in not appreciating the facts of the case qua the decisions relied upon by the assessee before the First Appellate Authority. 10. It is the say of the ld. counsel that the Hon ble Supreme Court in assessee s own case in 227 ITR 414 has categorically held that the assessee is not a trading corporation. The ld. counsel further relied upon the decision of the Hon ble Supreme .....

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Counsel vehemently stated that the assessee is not constituted with a pre-dominant object of making profit; therefore, proviso to Section 2(15) of the Act does not apply. Reliance was placed on the decision of the Hon ble Delhi High Court in the case of ICAI 35 taxmann.com 140 and 13 taxmann.com 175. Reliance was also placed on the decision of the Hon ble Delhi High Court in the case of GS1 India 38 taxmann.com 364, Hon ble Gujarat High Court in the case of Sabarmati Ashram Gaushala Trust 44 tax .....

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nt to treat such institutions (like assessee) as charitable institution. The ld. D.R. further drew our attention to the provisions of Section 10(20) of the Act which contains definition of local authority and stated that even under this provision, the assessee does not fit. Shri G.C. Srivastava continued by stating that under the proviso to Section 2(15) of the Act, it is the activity in the nature of trade, commerce or business or any activity of rendering any service in relation to any trade, .....

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tsar in the case of Jammu Development Authority in ITA No. 30/Asr/2011 which was later on decided by the Hon ble High Court of Jammu & Kashmir in Tax Appeal No. 164 of 2012. The ld. D.R. further relied upon the decision in the case of GIVE Foundation in ITA No. 1465 /Ahd/2013, Entertainment Society of Goa in ITA No. 90/Panj/2012 and Belgaum Urban Development Authority in ITA No. 214/Panj/2011. 13. Having heard rival contentions, we have carefully perused the orders of the authorities below a .....

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15) - "Charitable purpose" includes relief of the poor, education, medical relief and the advancement of any other object of general public utility not involving the carrying on of any activity of profit. This provision remained unchanged till its amendment by the Finance Act, 1983 and with effect from 1.4.1984 "not involving the carrying on of any activity of profit" was omitted. The Section remained unchanged till it was amended by the Finance Act, 2008 w.e.f 1.4.2009. 15. .....

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ng, drainage, sewerage, conservancy and such other convenience as the State Government may, by notification in the Official Gazette, specify to be an amenity for the purposes of this Act; (b) "building" means any structure or erection, or part of a structure or erection, which is intended to be used for residential, industrial, commercial or other purposes, whether in actual use or not; (c) "Collector" means the Collector of a district, and includes any officer specially appo .....

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ations, means the carrying out of building, engineering, quarrying or other operations in, on. over or under land, or the making of any material change in any building or land, and includes re- development, but does not include mining operations; and "to develop" shall be constructed accordingly; (f) "engineering operations" include the formation of laying out of means of access to a road or the laying out of means of access to a road or the laying out of water supply; (g) &q .....

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vate or public, for vehicles or for pedestrians; (j) "premises" means any land or building or part of a building and includes- (i) the garden, grounds and out-houses, if any, appertaining to such building or part of a building; and (ii) any fittings affixed to such building or part of a building for the more beneficial enjoyment thereof; (k) "Prescribed" means prescribed by rules, made under this Act; (1) "regulation" means regulation made under section 54 (m) " .....

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e relevant land acquisition law. ESTABLISHMENT AND CONSTITUTION OF THE CORPORATION 3. (1) For the purpose of securing and assisting in the rapid and orderly establishment, and organization of industries in industrial areas and industrial estates in the State of Gujarat l[and for the purpose of establishing commercial centers in connection with the establishment and organization of such industries], there shall be established by the State Government by notification in the Official Gazette, a Corp .....

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in the rapid and orderly establishment, growth and development of Industries in the State of Gujarat, and (ii) in particular and without prejudice to the generality of clause (i) to- (a) establish and manage industrial estates at place selected by the State Government; (b) (b) develop industrial area selected by the State Government for the purpose and make them available for undertakings to establish themselves; (c) (c) develop land on its own account or for the State Government for the purpos .....

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] or works, either jointly with other corporate bodies or institutions, or with Government or local authorities, or on an agency basis, in furtherance of the purposes for which the Corporation is established and all matters connected therewith. 14. Subject to the provisions of this Act the Corporation shall have power- (a) to.acquire and hold such property, both movable and immovable as the Corporation may deem necessary for the performance of any of its activities, and to lease, sell, exchange .....

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or cause to be maintained 6[works, buildings, amenities and common facilities] therefore; 7[(cc) to levy and collect development charges on the land which is not vested in or under the Control of the Corporation and which is benefited or likely to be benefited by the development or scheme or the work undertaken by the Corporation] (d) to make available buildings n hire or sale to industrialists or persons intending to start industrial undertakings '[or, commercial establishments or both the .....

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] (ii) to modify or rescind such allotments, including the right and power to evict the allottees concerned on breach of any of the terms or conditions of their allotment; (h) to constitute committees from amongst its 4[Directors] to perform any of its functions; (i) to engage suitable consultants or persons having special knowledge or skill to assist the Corporation in the performance of its functions; (j) 5 [********] [to delegate any of its powers generally or specially to any of its committe .....

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n shall be held and applied by it, subject to the provisions of the purposes of the Act. 24. (1) The Corporation shall have the authority to spend such sums as it thinks fit for the purposes authorised under this Act from out of the general fund of the Corporation referred to in section 19 or from the reverse and other funds referred to in section 23, as the case may be. (2) Without prejudice to the generality of the power conferred by sub-section (1), the Corporation may contribute such sums as .....

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LAND 30,(1) Wherever any land is required by the Corporation for any purpose in furtherance of the objects of the Act, but the Corporation is unable to acquire it by agreement, the State Government may, upon an application of the Corporation in that behalf, order proceedings to be taken under the relevant land acquisition law for acquiring the same o n behalf of the Corporation as if such lands were needed for a public purpose within the meaning of the relevant land acquisition law. (2) The amou .....

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and supervision of the Corporation, it shall be dealt with by the Corporation in accordance with the regulations made, and directions given by the State Government in this behalf. (3) If any land placed at the disposal of the Corporation under sub-section (1) is required at any time thereafter by the State Government, the Corporation shall replace it at the disposal of the State Government upon such terms and conditions as the State Government may after consultation with the Corporation determin .....

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y by notification in the official Gazette declare that the Corporation shall be dissolved with effect from such date as may be specified in the notification, and thereupon the Corporation shall stand dissolved accordingly. (2) From the said date- (a) all properties, funds and dues which are vested in, or realizable by, the Corporation shall vest in or be realisable by State Government; and (b) all liabilities which are enforceable against the Corporation shall be enforceable against the State Go .....

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be laid for not less than thirty days before the State Legislature, as soon as possible, after they are made, and shall be subject to rescission by the Legislature, or to such modification as the Legislature may make, during the session in which they are so laid, or the session immediately following. (4) Any rescission or modification so made by the State Legislature shall be published in the Official Gazette and shall thereupon take effect. 16. The Hon ble Supreme Court in the case of the asses .....

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'a city or town or village could be well developed without any industry'. The Division Bench posed a question and answered it in the following manner: "The question, therefore, is whether when a particular Corporation is established for the purpose of developing or establishing industries in any particular area, can any one say that it is for the purpose of planning, developing or improving a particular city, town or village or a particular area ? One may establish an industry in a .....

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as to whether the purpose of the corporation or the object of the corporation is to develop any city, any town or any particular area. The answer would be in the negative." 8. The Gujarat Act was enacted 'to make special provision for securing the orderly establishment of industries in industrial areas and industrial estates in the State of Gujarat, and to assist generally in the organization thereof, and for that purpose to establish an Industrial Development Corporation and for purpo .....

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ailable for any industries or class of industries. Section 13 of the Gujarat Act enumerates the functions of the Corporation and they contain, inter alia, 'to promote and assist in the rapid and orderly establishment, growth and development of industries in the State of Gujarat'. 10. We have no doubt that a proper planning is absolutely necessary for creation of an industrial area. Inside roads, sub-roads, buildings, sanitation, parks and other amenities have also to be provided in a pla .....

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ent Act, 1 962, which is almost analogous to the Gujarat Act, is of some use. While examining issues relating to the validity of the Maharashtra Act, a Division Bench of this Court has said in Shri Ramtanu Co-operative Housing Society Ltd .v. State of Maharashtra [1 970] 3 SCC 323 : "The functions and powers of the Corporation indicate that the Corporation is acting as a wing of the State Government in establishing industrial estates and developing industrial areas, acquiring property for t .....

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and facilities in industrial estates and industrial areas. Amenities of road, electricity, sewerage and other facilities in industrial estates and industrial areas are within the programme of the work of the Corporation." 12. The scheme of the Gujarat Act, as is seen from a survey of the relevant provisions referred to above, would indicate that the Corporation set up thereunder is to chalk out plans for development of industrial area and industrial estate in different places which may loca .....

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can be accelerated through varieties of schemes and establishment of industries is one of the modes of developing an area. One of the reasons for incorporating a specific provision of exemption from income-tax such as section 10(20A) is to protect public bodies created under law for achieving the purpose of developing urban or rural areas for public good. When the object is such, an interpretation which would preserve it should be accepted even if the provision is capable of more than one inter .....

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ion Bench of the High Court seems to have interpreted the exemption clause too rigidly and narrowly which resulted in the anomaly of bringing authorities like the appellant-corporation within the tentacles of the income-tax liability while the authorities dealing with the housing schemes which provide houses to private individuals would stand outside the taxing sphere. 16. In the/ result, we allow these appeals, 'set aside the judgment under challenge. The answer to the question will, theref .....

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ertained "with reference to the purposes and the provisions of the Act. The Act is one to make a special provision for securing the orderly establishment in industrial areas and industrial estates of industries in the State of Maharashtra, and to assist generally in the organisation thereof, and for that purpose to establish an Industrial Development Corporation, and for purposes connected with the matters aforesaid. 4. The Corporation is established for the purpose of securing and assistin .....

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as having had experience of, and having shown capacity in industry or trade or finance or who are in the opinion of the Government capable of representing the interest of persons engaged or employed therein, and the Chief Executive Officer of the Corporation, who shall be the Secretary of the Corporation. 7. We have referred to these expressions, "industrial area", "industrial estate", "development" and "amenity" in order to appreciate the general powers .....

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land, to erect such buildings arid to execute such other works as may be necessary for the purpose of carrying out its duties and functions, to provide or cause to be provided amenities and common facilities in industrial estates and industrial areas and construct and maintain or cause to be maintained works and buildings therefore, to make available buildings on hire or sale to industrialists or persons intending to start industrial undertakings to construct buildings for the housing of the emp .....

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strial estates by providing amenities of road., supply of water or electricity, street lighting, drainage, sewerage, conservancy and other conveniences, secondly to construct works and buildings, factory sheds and thirdly, to make available buildings on hire or sale to industrialists or persons intending to start industrial undertakings and to allot factory sheds, buildings, residential tenements to suitable persons in industrial estates established or developed by the Corporation and to lease, .....

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ndustrial areas are broadly classified into two categories, namely, first, those meant for engineering and other industries which are not obnoxious and secondly those meant for chemical industries. The establishment and growth of industries in the State is inextricably bound up with availability of land. Available land is limited. Such limited supply leads to speculation in land. Power is therefore required for compulsory acquisition of land to achieve the purposes of the Act. At the same time, .....

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The Act, therefore, contemplates that the State Government may acquire land by publishing a notice specifying the particular purpose for which such land is required. Before the publication of the notice, the owner of the land is given an opportunity to show cause as to why the land should not be acquired. After considering the cause shown by the owner the State Government may pass such orders as it deems fit. When a notice is published for acquisition of land, the land shall, on and from the dat .....

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namely, the establishment and development of industries the State the Corporation will establish industrial estates and develop industrial areas. 12. Apart from establishing industrial estates and developing industrial areas the Corporation may dispose of any land acquired by the State Government and transfer to the Corporation without undertaking or carrying out any development thereof or transfer such land after undertaking or carrying out any development as it thinks fit. These powers of the .....

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ing or carrying on business or other activities on any such land shall, if they desire to obtain accommodation on land belonging to the Corporation and are willing to comply with any requirements of the Corporation as to its development and use, have an opportunity to obtain thereon accommodation suitable to their reasonable requirements on terms settled with due regard to the price at which any such land has been acquired from them. 16. The petitioners contended that the Corporation was a tradi .....

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cia nor the decisive attributes of the trading character of the Corporation. Ordinarily, a Corporation is established by shareholders with their capital. The shareholders have their Directors for the regulation and management of the Corporation. Such a Corporation set up by the shareholders carries on business and is intended for making profits. When profits are earned by such a Corporation they are distributed to shareholders by way of dividends or kept in reserve funds. In the present case, th .....

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ndustrial areas, acquiring property for those purposes, constructing buildings, allotting buildings, factory sheds to industrialists or industrial undertakings. It is obvious that the Corporation will receive moneys for disposal of land, buildings and other properties and also that the Corporation would receive rents and profits in appropriate cases. Receipts of these moneys arise not out of any business or trade but out of sole purpose of establishment, growth and development of industries. 18. .....

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all moneys received by the Corporation by way of rents and profits or in any other manner. The Corporation shall have the authority to spend such sums out of the general funds of the Corporation or from reserve and other funds. The Corporation is to make provision for reserve and other specially denominated funds as the State Government may direct. The Corporation accepts deposits from persons, authorities or institutions to whom allotment or sale of land, buildings, or sheds is made or is like .....

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over expenditure that will not establish the trading character of the Corporation. There are various departments of the Government which may have excess of income over expenditure. 19. There are two provisions of the Act which are not to be found in any trading Corporation. In the first place, the sums payable by any person to the Corporation are recoverable by it under this Act as an arrear of land revenue on the application of the Corporation. 'Secondly on dissolution of the Corporation th .....

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lishment of industrial estate or development of industrial areas and of setting up of industries cannot be said to be dealing in land or buildings for the obvious reason that the State is carrying out the objects of the Act with the Corporation as an agent in setting up industries in the State. The Act aims at building an industrial town and the Corporation carries out the objects of the Act. The hard core of a trading Corporation is its commercial character. Commerce connotes transactions of pu .....

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me Court, it is settled that the assessee is not a trading corporation. Let us now consider the various aspect of the impugned provision. General means pertaining to whole class, "Public" means the body of people at large including any class of the public, "Utility" means usefulness. Therefore, the advancement of any object of benefit to the public or a section of the public as distinguished from individual and group of individuals would be a charitable purpose. An object of .....

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establishing and maintaining Gaushalas and Panjrapole constitutes charitable purpose. 16. The Hon'ble Finance Minister while presenting the Finance Act 2008 in his budget speech stated as follows: "Charitable purpose includes relief of the poor, education, medical relief and any other objects of general public utility. These activities are tax exempt as they should be. However, some entities carrying on regular trade, commerce or business or providing services in relation to any trade, .....

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med on the basis that the purpose would fall under charitable purpose. 18. The CBDT Circular No. 11/2008 dt. 19.12.2008 has explained the implications arising from the amendment brought to the provisions of Sec 2(15) of the Act. The CBDT clarifies that the newly inserted proviso to Sec. 2(15) will not apply in respect of the first three limbs of Sec. 2(15) i.e. relief of the poor, education or medical relief. Consequently where the purpose of a trust or institution is relief of the poor, educati .....

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jects the advancement of any other object or general public utility is a question of fact. If such assessee is engaged in any activity in the nature of trade, commerce or business or renders any service in relation to trade, commerce or business, it would not be entitled to claim that its object is charitable purpose. In such a case, the object of general public utility will be only a mask or device to hide the true purpose which is trade commerce or business or the rendering of any service in r .....

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ant company has been constituted for the purpose of securing and assisting in the rapid and orderly establishment and organization of industries in industrial areas and industrial estates in the State of Gujarat. 20. In the case of Sole Trustee, Loka Shikshana Trust vs. CIT 101 ITR 234, the Hon ble Justice J. Baig speaking for the Apex Court thus said that: " If the profits must necessarily feed a charitable purpose, under the terms of the trust, the mere fact that the activities of the tru .....

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Director General of Income Tax (Exem) 347 ITR 99 had the occasion to consider the grievance of the ICAI which was denied exemption u/s. 10(23C)(iv) of the Act because in the opinion of the DGIT (Exem.) the institute was holding coaching classes and therefore was not an educational institution, consequently the institute was covered under the last limb of charitable purpose i.e. advance of any other object of general public utility in the light of the amendment brought o Sec. 2(15) of the Act as .....

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iated from its objects as detailed in the trust deed of the assessee. The proviso to Sec. 2(15) was not applicable. 23. The reliance by the Ld. DR on the decision of the Tribunal in the case of Amritsar Bench in the case of Improvement Trust (supra) by the Ld. DR is misplaced inasmuch as in that case the dominant activity of the trust was to purchase land at nominal cost, then level and clear it. cut into plots and sell at much higher prices. On this, the Tribunal has held that the activities of .....

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referring to the said certificate, the Tribunal observed that while granting registration, the CIT had no chance to examine the newly inserted proviso to Sec. 2(15) of the Act and the Tribunal was not aware what happened subsequently in that case after the coming into force the proviso to Sec. 2(15) and whether any rectification order has been passed by the department or not as there being mistake of law after coming into force the first proviso to Sec. 2(15) of the Act. The facts of the case i .....

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.06.2016. By way of ad- interim relief, the impugned order dated 19.04.2016 passed by the ITAT in ITA No. 712/Ahd/2013 and ITA Nos. 647 and 2335/Ahd/2014 is hereby stayed. 26. Referring to this order of the Hon ble High Court of Gujarat, the ld. D.R. referred to the judgment of the Hon ble Calcutta High Court in the case of Pijush Kanti Chowdhury vs. State of West Bengal (2007) 2 CALLT 577 (HC). It is say of the ld. D.R. that the Hon ble Calcutta High Court has held that - such interim order is .....

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rt given in the case of Shree Chamundi Mopeds Ltd. vs. Church of South India Trust Association in Civil Appeal No. 2553 of 1991 (1992) 3 Supreme Court cases 1. 28. The ld. Senior Counsel referred to the following observations of the Hon ble Supreme Court in the said order:- While considering the effect of an interim order staying the operation of the order under challenge, a distinction has to be made between quashing of an order and stay of operation of an order. Quashing of an order results in .....

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be that the appeal which had been disposed of by the said order of the Appellate Authority would be restored and it can be said to be pending before the Appellate Authority after the quashing of the order of the Appellate Authority. The same cannot be said with regard to an order staying the operation of the order of the Appellate Authority because in spite of the said order, the order of the Appellate Authority continues to exist in law and so long as it exists, it cannot be said that the appea .....

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stood revived and was pending before the Appellate Authority. In that view of the matter, it cannot be said that any proceedings under the Act were pending before the Board or the Appellate Authority on the date of the passing of the order dated August 14, 1991 by the learned Single Judge of the Karnataka High Court for winding up of the company or on November 6, 1991 when the Division Bench passed the order dismissing O.S.A. No. 16 of 1991 filed by the appellant-company against the order of th .....

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decisions discussed hereinabove and also drawing support from the speech of the Hon'ble Finance Minister and subsequent clarifications issued by the CBDT within the frame work of the amended provisions of Sec. 2(15) of the Act, in our considered view, there was no material which may suggest that the appellant company was conducting its affairs solely on commercial lines with a motive to earn profit. There is also no material brought on record which could suggest that the appellant company d .....

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