TMI Blog2017 (11) TMI 1707X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee by : S/Shri S.N. Soparkar Parin Shah, ARs Revenue by : Ms.Vashundara Upmanyu,CIT-DR ORDER Pradip Kumar Kedia - AM : The captioned cross-appeals have been filed by the assessee and Revenue are against the respective orders of the Commissioner of Income Tax(Appeals)-Gandhinagar [CIT(A) in short] dated 31/08/2016 28/12/2016 in the matter of assessment orders under s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) dated 25/03/2015 and dated 28/03/2016 relevant to Assessment Years (AYs) 2012-13 2013-14 respectively. 2. In both the cross-appeals, the facts and question for determination are broadly similar. Therefore, the Assessment Year 2012-03 is taken as a lead year for the sake of convenience. ITA No.2700/Ahd/2016 AY 2012-13 Assessee s appeal 3. The grounds of appeal raised by the assessee read as under:- 1. On the facts and in the circumstances of the case, the learned CIT(A) erred in rejecting the appellant s ground of appeal that, for all practical purposes, it is an agent of the State Government of Gujarat and, therefore, by virtue of the provisions contained in Article 289 of the Constitution of India, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant is a land dealer/real estate developer, the Assessing Officer erred in not appreciating the well-settled law that the sale of land only materializes in the year of passing of title on execution of valid transfer deeds. 5.5 On the facts and in the circumstances of the case, the learned CIT(A) erred in estimating the quantum of deduction from gross advance premium, in respect of cost and expenses incurred in relation to such advance premium receipts, at a figure of ₹ 819,49,88,617, by adopting an estimated rate of 60% against the lease premium received of ₹ 13,65,83,14,362. 6.(i) On the facts and in the circumstances of the case, the learned CIT(A) erred in allowing depreciation allowance at ₹ 2,80,18,241 as against the appellant's claim for deduction of depreciation allowance at ₹ 62,87,37,304. (ii) On the facts and in the circumstances of the case, the learned CIT(A) erred in directing that depreciation is to be allowed only on additions to the assets during the financial years 2008-09 to 2011-12 and further after reducing there from the proportionate cost to be deducted from the advance premium receipts, as determined by the learned CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he circumstances of the case is the Ld.CIT(A) justified in directing the A.O. to tax the lease premium at the rate of 40%. 5. The Ld.Counsel for the assessee Mr.S.N.Soparkar at the outset submitted that predominant ground which requires adjudication at this stage is ground No.3 of the assessee s appeal. The Ld.Counsel submitted that the AO held for this year as well as in the earlier year that activities carried out by the assessee-company are in the nature of advancement of other general public utility in the nature of trade/commerce/business and therefore the activities carried out by the assessee cannot be reckoned as attributable to charitable purpose within the meaning of section 2(15) of the Act. The Assessing Officer (AO) has accordingly denied the benefit of exemption claimed by the assessee under s.11 of the Act. The Ld.Counsel in this context submitted that the assessee-company is constituted by the State Government Act, i.e. Gujarat Industrial Development Act, 1962. The object of Gujarat Industrial Development Corporation (GIDC) is to establish and develop the industries in the State of Gujarat. The GIDC is under obligation to fulfill the industrial development po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose. The Revenue carried the aforesaid decision of the Coordinate Bench in appeal before the Hon ble Jurisdictional High Court without any success. The catchnotes of the judgement of the Hon ble Gujarat High Court are extracted hereunder:- Section 2(15), read with section 11, of the Income-tax Act, 1961 - Charitable purpose (Objects of general public utility) - Assessment year 2009-10 - Whether where assessee-corporation was constituted under Gujarat Industrial Development Act, 1962, for purpose of securing and assisting rapid and orderly establishment and organization of industrial areas and industrial estates in State of Gujarat, and for purpose of establishing commercial centers in connection with establishment and organization of such industries it could not be said that activities carried out by assessee were either in nature of trade, commerce or business, for a Cess or Fee or any other consideration so as to attract proviso to section 2(15) and same could be said to be for charitable purpose and, consequently, assessee was entitled to exemption under section 11 - Held, yes [Paras 15 and 17] [In favour of assessee]. 8. The Hon ble Jurisdictional High Court in essenc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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