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TMI Blog2018 (4) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... llant authority are not charitable as the registration of the trust is pending. 2. Making a lump sum addition of profit on sale of land Rs. 50 lacs without any legitimate basis. 3. Disallowing depreciation Rs. 2073551/- claiming that the capital asset is already allowed as capital expenditure. 4. Not allowing the benefit of section 10(2) of the Income Tax Act, 1961 to the trust. B. Any other question of law as deemed fit in the facts and circumstances of the case may also be framed before the Hon'ble Tribunal in the interest of justice." 2. Ground Nos. 1 and 2 are regarding denial of exemption u/s 11 of the Act and making the addition of Rs. 50 lacs. The assessee was established under Rajasthan Urban Improvement Act, 1959 as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Circular No. 11 of 2008 dated 19.12.2008 providing a reasonable opportunity to the assessee. The ld. AR has pointed out that consequently the ld. CIT(E) vide order dated 15.12.2016 granted registration u/s 12AA w.e.f. 01.04.2013. He has further submitted even otherwise the assessee is a local body as per the provisions of section 10(20) of the Act and therefore, the income of the assessee is not liable to tax. In support of his contention, he has relied upon the decision of Hon'ble jurisdictional High Court dated 25.07.2017 in case of CIT vs. Urban Improvement Trust, Alwar in D.B. I.T.A. No. 643/2008, 706/2008 and 294/2009, in case of Urban Improvement Trust Kota vs. ITO Kota in D.B.I.T.A. No. 73/2011 & CIT vs. Urban Improvement Trust Ajme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .O is justified in estimating the profit of Rs. 50 lakhs. Accordingly, the addition is sustained and the appellant's ground of appeal on the issue is dismissed." Now the registration u/s 12A has been granted by the ld. CIT(E) vide order dated 15.12.2016 w.e.f. 01.04.2013 therefore, the activity of the assessee has been accepted as charitable in nature. Further, the Hon'ble jurisdictional High Court in case of Urban Improvement Trust, Alwar, Kota and Ajmer vide order dated 25.07.2017 (Supra) has held in para 15 to 19 as under:- "15. It is true that the functions which are carried out by the assessee are statutory functions and carry on for the benefit of the State Government for urban development therefore, in our considered opinion, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate which are sovereign whereas the urban development and calculation of development charges will fall under the development charges. 18. In that view of the matter, deletion of 20A will not make difference in case of assessee. In our considered opinion, clause- 3 will come in the help of the assessee. In that view of the matter, we are considered opinion, that the authority assessee is a local authority for the purpose of carrying out of the improvement and development function of the State. 19. In that view of the matter, the issue is required to be answered in favour of the assessee against the department. In view of the answer, other issues are become academic, therefore, we are not deciding those issue." Accordingly, in view o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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