Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles SMS News Highlights
        Home        
Extracts
Home List
← Previous Next →

U.P. State Industrial Development Corp. Ltd. (Upsidc) Versus Commissioner Of Income-Tax-Ii, Kanpur

2016 (7) TMI 1392 - ALLAHABAD HIGH COURT

UPSIDC treated as a "local authority" under Section 10(20) of Act, 1961 - Held that:- The word "development" under Section 10(20A) of Act, 1961 should be understood in its wide sense. There is no warrant to exclude all development programmes relating to an industry from purview of the word "development" in the said sub-section. There is no indication in Act, 1961 that development envisaged should confine to non-industrial activities. Development of a place can be accelerated through varieties of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

We answer all the questions against appellant- assessee and in favour of Revenue by holding that since UPSIDC is a company incorporated under Act, 1956 and not an authority constituted by or under any enactment in India, therefore, is not entitled for claiming exemption under Section 10(20A) of Act, 1961. - Income Tax Appeal No. - 231 to 235 of 2006 - Dated:- 5-7-2016 - Sudhir Agarwal and Prabhat Chandra Tripathi, JJ. S.K. Garg for the Appellant A.N. Mahajan,B.Agrawal for the Respondent ORDER: 1 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

status of "Authority" as stipulated in section 10(20A) of the Act and in rejecting its claim for exemption, thereunder ? (ii) Whether the Tribunal was legally correct in holding that in the absence of a specific notification having been issued by the State Government to create UPSIDC, it cannot be treated to be an "Authority" constituted in India "for the purposes of planning, development or improvement of cities, towns or villages or both" as stipulated under Secti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

State Industrial Development Corporation (hereinafter referred to as 'UPSIDC') is a company incorporated under the Companies Act, 1956 (hereinafter referred to as 'Act, 1956') and is a State Government undertaking incorporated inter-alia to promote, establish and execute industries, works, projects and enterprises and/or to provide aid or assistance to industrial undertakings, and/or to establish industries in Industrial Areas and Industrial Estates in State of U.P. 5. UPSIDC cl .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

not appear that any such issue was raised before the court below. Even otherwise during the course of argument it has not been disputed before us that the term "local authority" has not been defined under Act, 1961. It has been defined under Section 3 (31) of The General Clauses Act, 1897 which reads as under :- "3(31). "local authority" shall mean a municipal committee, district board, body of port Commissioners or other authority legally entitled to, or entrusted by t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed. 9. Though in memo of appeals, appellant has claimed its existence under U.P. Industrial Development Act, 1962 (hereinafter referred to as "UPID Act, 1962') but learned counsel for appellant fairly stated that neither before Tribunal nor before this Court, appellant could produce any notification showing its creation or existence under UPID Act, 1962. 10. In fact, learned counsel for appellant fairly admits that there is no notification issued under Section 3 of UPID Act, 1962 result .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

may be reproduced as under: "11. From the facts noticed by Tribunal, in the impugned judgment, it is said that Assessee M/s U.P. State Industrial Development Corporation Ltd. (hereinafter referred to as 'UPSIDC'), is a company registered under the Companies Act, 1956 and wholly owned by State of Uttar Pradesh, therefore, it is a State undertaking. The objects and purposes incorporating the aforesaid company is to acquire and develop land for the purposes of promoting industrialisat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nd also loans. However, from the aforesaid order, we find that there is also some contradictory facts and in paragraph 7, it is mentioned that UPSIDC was formed under U.P. Industrial Development Act, 1962 (hereinafter referred to as 'UPID Act, 1962'), but paragraph 11 shows that UPSIDC was already incorporated on 29th March, 1961. Once UPSIDC was already incorporated on 29th March, 1961, it is not possible to claim that it could have been established under UPID Act, 1962, which came into .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the Official Gazette, a Corporation by the name of the U.P. Industrial Development Corporation. (2) The Corporation shall be a body corporate with perpetual succession and a common seal, and may sue and be sued in its corporate name, and shall be competent to acquire, hold and dispose of property, both movable and immovable, and to contract, and do all things necessary for the purposes of this Act." 17. Term 'corporation' is also defined in Section 2(d) of UPID Act, 1962, and reads .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ubsequent point of time is not known. 19. Section 12 of UPID Act, 1962, on the contrary shows that 'Corporation' under the aforesaid Act, shall take over and employ all the existing staff serving for the purposes in U.P. State Industrial Development Corporation etc. who would give their willingness to serve in the Corporation. 20. Section 13 of UPID Act, 1962, which discusses the functions and powers of Corporation, further provides that Corporation would take over and manage industrial .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

laim of UPSIDC about its origin under UPID Act, 1962 cannot be accepted. 13. Now we come to consider the above questions by excluding the applicability of UPID Act, 1962. Unless appellant is an authority constituted in India by or under any law enacted, Section 10 (20A) of Act, 1961 shall not be attracted. This is evident from a bare reading of the aforesaid provision which reads as under:- "10(20A). any income of an authority constituted in India by or under any law enacted either for the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

authority constituted under Gujarat Industrial Development Act, 1962 (hereinafter referred to as 'GID Act, 1962'). Court recorded a finding to this effect by accepting this claim as is evident from para 3 of judgment:- "3. Corporation has been created under the Gujarat industrial Development Act, 1962, (for short 'the Gujarat Act') with the right to hold properties and the right to sue and be sued in its own name." 15. Thereafter referring to Section 10(20A) of Act, 196 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lages or both. 16. This Court finds that in Gujarat Industrial Development Corporation vs. CIT (supra) that GIDC was created under a provincial enactment for the purpose of planning or development or improvement of cities, towns or villages or in combination of them. Court also negated the view taken by High Court that the second limb of the requirement was not satisfied since GIDC was established for the purpose of developing or establishing industries in any particular area and not for the pur .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ecuring the orderly establishment of industries in industrial areas and industrial estates in the State of Gujarat, 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 as can be discerned from the preamble thereof. 10. Section 2 (g) of the Act defines "industrial area" as any area declared to be an industrial area by the State Government by notification in the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ment of industries in the State of Gujarat. 11. 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 planned industrial area as per the modern concept of any industrial complex. Even educational institutions may have to be provided in such complex. Therefore, development of industrial area would have its direct impact on the development or improvem .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

62 (hereinafter referred to as 'MID Act, 1962') and reproduced following observations made in judgment in the context of MID Act, 1962 and Corporation created thereunder :- "The functions and powers of the Corporation indicate that the Corporation government in establishing industrial estates and developing industrial areas, acquiring property for those purposes, constructing property for those purposes, constructing building, allotting building, factory sheds to industrialists or i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and other facilities in industrial estates and industrial areas are within the programme of work of the Corporation." 18. It was also held that the word "development" under Section 10(20A) of Act, 1961 should be understood in its wide sense. There is no warrant to exclude all development programmes relating to an industry from purview of the word "development" in the said sub-section. There is no indication in Act, 1961 that development envisaged should confine to non-in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e accepted even if the provision is capable of more than one interpretation. 19. If we examine the present case in the light of aforesaid exposition of law laid down in Gujarat Industrial Development Corporation vs. CIT (supra) we find that the first limb of requirement to attract Section 10(20A) of Act, 1961 that one who is claiming exemption thereunder must be "an authority" constituted by or under any law enacted in India, is not satisfied. Therefore, even if second limb of Section .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

) claimed exemption under Section 10(20A) of Act, 1961. It was negated by assessing authority holding that KSSIDC is not an authority constituted in India by or under any law but is a creation incorporated under Companies Act. The appeal of KSSIDC also failed before Commissioner of Income Tax (Appeals) (hereinafter referred to as 'CIT (A)') and further appeal was rejected by Income Tax Appellate Tribunal at Bangalore. Like UPSIDC, KSSIDC was also promoted as Government Company incorporat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hority' and said authority should be constituted in India by or under any law and such law should be 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. KSSIDC was not constituted under any law. It was incorporated pursuant to a resolution of Government of Karnataka. The objectives and purposes for which it was incorporated and manner of its creat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


Share:            

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version