TMI Blog2023 (9) TMI 1020X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment of Andhra Pradesh. The assessee debited 85% of the Development Charges received to the sinking fund to meet the future formation charges as per the directions given. Coordinate Bench of the Tribunal in the assessee s own case for the A.Y. 2009-10 to 2013-14 on similar issue [ 2022 (10) TMI 120 - ITAT VISAKHAPATNAM ] allowed the appeal of the assessee holding that since the assessee could not expend 85% of the development charges during the relevant assessment year does not warrant disallowance of the same, as the expenditure shall be incurred in future years for the purpose of general public utilities. As we hold that the CIT(A) has rightly deleted the disallowance made by the AO. We are therefore, inclined to uphold the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 143(2) of the Act was issued on 29.08.2015 and served on the assessee. The developmental activities and functions are carried out by the assessee out of receipts under development charges. During the year under consideration, the assessee had collected development charges of Rs. 33,95,06,707/- and out of that Rs. 28,85,80,701/- (being 85% of Rs. 33,95,06,707/) were set aside under the head development fund for future use and was shown under direct Andhra Pradesh Capital Region Development Authority, Vijayawada expenses in the Income Expenditure account. The development fund was added to the sinking fund in the subsequent years. The sinking fund was shown as other liability (works) in the liability side of balance sheet. During the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee as it is debited to the development / sinking fund and cannot represent the actual expenditure of the assessee. 4) Any other ground that may be urged at the time of hearing of the case. 5. Ground No. 1 and 4 are general in nature which do not require specific adjudication. 6. Ground No. 2 and 3 are related to deleting the disallowance of Rs. 28,85,80,701/- made by the AO during the assessment proceedings. The Ld.DR contended that the Ld.CIT(A) is not justified in deleting the disallowance of Rs. 28,85,80,701/- made by the AO, since the assessee has not spent any amount during the relevant assessment year and hence the provisions created by the assessee cannot be allowed as an expenditure u/s 37 of the Act. The Ld.D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal as under : 19. We have heard both the parties and perused the material available on record and the orders of the Ld. Revenue Authorities. Admittedly, the assessee is a Non-Profit Organization established for the development of Urban Areas by implementing the provisions of the Master Plan. As the assessee has been formed under section 3 of the Andhra Pradesh Urban Areas (Development) Act, 1975, it is bound by the Circular issued by the Government of Andhra Pradesh. In the instant case, even though the assessee has not spent the entire amount but debited 85% of the Development Charges received to the Sinking Fund to meet the future formation charges expenditure as per the directions given in G.O. Ms. No. 530, dated 28/9/1998. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In view of the above discussions, we are of the considered view that the assessee being a non-profit oriented organization established for the purpose of implementing the provisions of the Master Plan is not carrying on any business activity and is only an organ of Government of Andhra Pradesh. Since the assessee could not expend 85% of the development charges during the relevant assessment year it does not warrant disallowance of the same as the expenditure shall be incurred in future years for the purpose of general public utilities. Accordingly, we allow the ground raised by the assessee and hereby set aside the order of the Ld. Revenue Authorities. Respectfully following the order of the Tribunal in assessee own case for the A.Y ..... X X X X Extracts X X X X X X X X Extracts X X X X
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