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2012 (9) TMI 1103

corporated pursuant to the resolution of the Government of Karnataka, but not constituted under any law. It was incorporated for the purpose of achieving certain objects and cannot be equated with the authority constituted in India by or under any law enacted. Looking at the object of the appellant-company it cannot be treated as an authority under article 12 of the Constitution of India. Since they are not discharging the functions of housing accommodation and for the purpose of planning and development of the Cities, towns and villages, the appellant does not fall under the purview of Section 10(20A) of the Act. Hence, they are not entitled to claim exemption. - Decided against assessee. - IT APPEAL NO. 1281 OF 2006 - Dated:- 3-9-2012 - K .....

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se of reassessment proceedings, the representative of the appellant claims that the appellant-company having specifically formed for rendering industrial estate activities which in fact, has effected development of villages and towns after setting up of industrial estates, is carrying out the activities under the instructions of the Government, whose entire operations is under the Government control. Hence they are eligible for exemption under Section 10(20A) of the Act. The Assessing Authority after considering the contention of the appellant declined to grant exemption under Section 10(20A) of the Act. The Assessing Authority held that the appellant-company is not an authority constituted in India by or under any law and the appellant-com .....

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ed by the Government of Karnataka in the year 1960. It is a Public Limited Company. The entire share capital is held by the State Government. It is a non-profit making organization established for developing small scale industries, constructing and managing industrial estates and granting financial assistance and marketing the products of the Small Industries. The appellant has effected development of villages and towns after setting up of industrial estates and carrying out the objects for its incorporation. It is a local authority within the meaning of article 12 of the Constitution of India and entitled for exemption under Section 10(20A) of the Act. Further the learned counsel contended that the Hon'ble Supreme Court in Gujarat Indu .....

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at the appellant is a State Government undertaking engaged in the promotion of industrial activities and making provisions for infrastructure to industries, hence it is not entitled for exemption under Section 10(20A) of the Act and sought for dismissal of the appeal. 6. The appeal was admitted for considering the following substantial questions of the law: "(i) Whether the appellant which is a company incorporated under the Companies Act, 1956 and a Government Company as defined in Section 617 of the Companies Act, having 100% shareholding in the Corporation, falls within the definition of "authority" as per Section 10(20A) of the Income Tax Act? (ii) Whether the Tribunal having accepted that the appellant was an authority, .....

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nt-company consisting of seven Directors of whom three are the non-official Directors and four are the officials of the Government. The non-official Directors to be nominated by the Government. The functions of the appellant-corporation are as follows: 1. Taking over the construction of Industrial Estates and their management and development; 2.Purchase of equipment required by the Government schemes of the Small Scale Industries Department and their development; 3.Development of Emporia for the sale of small scale industries products as also products of craft cooperative Societies and of those entrepreneurs who wish to avail themselves of the services of the Emporia; 4. Receive and account for the block loans sanctioned the State by the Ce .....

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hich do not form part of the total income in computing the total income of a previous year of any person, any income falling under any of the following clauses shall not be included. Sub-Section 20A provides that - "Any income of an authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both" 12. The reading of the above said provision makes it very clear that to claim exemption, the aforesaid clause has to be satisfied. The person must be an authority and the said authority should be constituted in India by order under any law, such law should .....

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d villages, or for both. It was also admitted that the assessee had been incorporated under the provisions of the Companies Act, 1956. Hence, the assessee could not claim the benefit under Section 10(20A)" 12. Hence, we are in agreement with the law laid down by the Tamil Nadu High Court. The Tamil Nadu High court considering the judgment of the Hon'ble Supreme Court passed the orders. The Appellate Tribunal, First Appellate Authority and the Assessing Authority after considering the matter in detail have concurrently passed the orders impugned. The appellant has not made out a case to interfere with the same. Hence, the substantial questions of law framed in this appeal are held against the appellant and favour of the revenue. Acc .....

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