TMI Blog2023 (1) TMI 423X X X X Extracts X X X X X X X X Extracts X X X X ..... of trade, commerce or business, or service in relation to such activities, should be conducted in the course of achieving the GPU object, and the income, profit or surplus or gains must, therefore, be incidental. The requirement in Section 11(4A) of maintaining separate books of account is also in line with the necessity of demonstrating that the quantitative limit prescribed in the proviso to Section 2(15), has not been breached. Similarly, the insertion of Section 13(8), seventeenth proviso to Section 10(23C) and third proviso to Section 143(3) (all w.r.e.f. 01.04.2009), reaffirm this interpretation and bring uniformity across the statutory provisions. The issue is squarely covered and no question of law, much less substantial question of law has arisen. - R/TAX APPEAL NO. 501 of 2022 - - - Dated:- 3-1-2023 - HONOURABLE MS. JUSTICE SONIA GOKANI AND HONOURABLE MR. JUSTICE SANDEEP N. BHATT MS MAITHILI D MEHTA(3206) FOR THE APPELLANT(S) NO. 1 ORDER ( PER : HONOURABLE MS. JUSTICE SONIA GOKANI ) 1. Being aggrieved by the order of the Income Tax Appellate Tribunal (for short ITAT ), Ahmedabad passed in ITA No. 518/Ahd/2018 for the assessment year 2014-15, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... though the various questions are raised essentially challenge is of giving benefit of Section 11 and 12, disallowed by the Assessing Officer by invoking of provision of Section 2(15) read with Section 13 (8) of the Income Tax Act, 1961 (for short ITAT ) 3. Tribunal on the ground that the issue is covered in assessee s own case by the order of the Coordinate Bench of Tribunal and affirmed by this Court in the case of CIT Vs. Gujarat Industrial Development Corporation [(2017) 80 taxman.com 366 (Guj)] has chosen to address the issue. The Assessee-Corporation was constituted under the Gujarat Industrial Development Act, 1962 for the purpose of securing and assisting rapid and orderly establishment and organization of Industrial areas and Industrial estates in the State of Gujarat and for the purpose of establishing the commercial centers in connection with establishment and organization of such industries. It is also held that it could not be said that the activities carried out by the Assessee were either in nature of trade, commerce or business, for Cess or Fee or any other consideration so as to attract the proviso to Section 2(15) and the same could be said to be for charitab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the development or a charitable object or for carrying on trade, business or commerce or service in relation to such trade, etc.; (c) Rendition of service or providing any article or goods, by such boards, authority, corporation, etc., on cost or nominal mark-up basis would ipso facto not be activities in the nature of business, trade or commerce or service in relation to such business, trade or commerce; (d) where the controlling instrument, particularly a statute imposes certain responsibilities or duties upon the concerned body, such as fixation of rates on pre-determined statutory basis, or based on formulae regulated by law, or rules having the force of law, setting apart amenities for the purposes of development, charging fixed rates towards supply of water, providing sewage services, providing foodgrains, medicines, and/or retaining monies in deposits or government securities and drawing interest therefrom or charging lease rent, ground rent, etc., per se, recovery of such charges, fee, interest, etc. cannot be characterized as fee, cess or other consideration for engaging in activities in the nature of trade, commerce, or business, or for providing service in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... those amounts, that the quantitative limit in proviso (ii) to Section 2(15) applies, and for which separate books of account will have to be maintained under other provisions of the IT Act. (ii) Statutory regulatory bodies/authorities 5. Hon ble Apex Court has elaborately dealt with these very issues thus:- 253. A. General test under Section 2(15) A.1. It is clarified that an assessee advancing general public utility cannot engage itself in any trade, commerce or business, or provide service in relation thereto for any consideration ( cess, or fee, or any other consideration ); A.2. However, in the course of achieving the object of general public utility, the concerned trust, society, or other such organization, can carry on trade, commerce or business or provide services in relation thereto for consideration, provided that (i) the activities of trade, commerce or business are connected ( actual carrying out inserted w.e.f. 01.04.2016) to the achievement of its objects of GPU; and (ii) the receipt from such business or commercial activity or service in relation thereto, does not exceed the quantified limit, as amended over the years (Rs. 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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