Gujarat High Court
The Commissioner Of Income Tax vs Gujarat Industries Development Corp. ... on 27 August, 2018
Author: Akil Kureshi
Bench: Akil Kureshi, B.N. Karia
C/TAXAP/1060/2018 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/TAX APPEAL NO. 1060 of 2018
==========================================================
THE COMMISSIONER OF INCOME TAX
Versus
GUJARAT INDUSTRIES DEVELOPMENT CORP. LTD.
==========================================================
Appearance:
MRS MAUNA M BHATT(174) for the PETITIONER(s) No. 1
for the RESPONDENT(s) No. 1
==========================================================
CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 27/08/2018
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal dated 23.03.2018 raising following questions for our consideration:
"[A] Whether on the facts and in the circumstances of the case, and in law, the Appellate Tribunal is in interpreting the provisions of section 2(15) of the Act that the assessee trust's activities do not fall under the last limb of section 2(15) i.e." advancement of general public utility?"
[B] Whether, on the facts and in the circumstances of the case, and in law, the Appellate Tribunal is in directing to allow depreciation on roads of Rs.11,18,20,000/? [C] Whether on the facts and in the circumstances of the case, and in law, the Appellate Tribunal is In deleting disallowance made u/s.40(a)(ia) of Rs.55,08,286/ considering that income is required to be computed u/s.11(1)
(a) of the Act?"
Page 1 of 4
C/TAXAP/1060/2018 ORDER
2. The issue pertains to assessment year 200809. The respondent assessee is Gujarat Industrial Development Corporation Limited ('GIDC' for short). GIDC is constituted under the State Act which is also registered under section 12AA of the the Income Tax Act, 1961 ('the Act' for short) which is enacted and is carrying on the business of acquiring land within the State of Gujarat for industrial purposes and developing industrial estates constructing sheds and housing quarters and transferring facilities to the various industries after creating infrastructural facilities such as roads, streetlights, water supply, effluent disposal, storm water drainage etc. Principally two issues arise in the present appeal out of the impugned judgment of the Income Tax Appellate Tribunal ('the Tribunal' for short). First is, whether the activities of the respondent assessee can be said to be falling within the expression "advancement of general public utility". Second issue is whether the subsidies provided by GIDC as corpus fund for the purpose of disbursement of funds to the other agencies implementing the schemes for specific performances who also form part of the Page 2 of 4 C/TAXAP/1060/2018 ORDER corpus and hence, gathered under the provisions of section 11(1)(d) of the Act.
3. The first issue referred to above is covered by the judgment of the Division Bench of this Court in case of Commissioner of Incometax v. Gujarat Industrial Development Corporation reported in [2017] 83 taxmann.com 366 (Gujarat), in which, the Court made following observations:
"14. As per the statement and object of GIDC Act, 1962, it has been enacted for securing the orderly establishment and organization of industries in industrial areas and industrial estates in the State of Gujarat and for the purpose of establishing commercial centres in connection with the establishment and organization of such industries and for that purpose, to establish an Industrial Development Corporation, and for purposes connected with the aforesaid matters.
15. It cannot be said that the activities carried out by the assessee can be said to be for "advancement of any other object of general public utility". Considering the object and purpose for which the assessee has been established under the provisions of the Act and the activities carried out by the assessee, it cannot be said that the activities carried out by the assessee can be said to be either in the nature of trade, commerce or business, or rendering any services in relation to any trade, commerce or business for a Cess or Fee or any other consideration so as to attract proviso to Section 2[15] of the IT Act."Page 3 of 4
C/TAXAP/1060/2018 ORDER
4. The second issue has been discussed by the Tribunal at some length. The Tribunal observed that income from properties held under Trust would have to be arrived at in normally commercial manner without classification under various heads stated out in section 14 of the Act. The expression "income" has to be understood in popular or general sense. The Tribunal relied on the judgment of this Court in case of Commissioner of IncomeTax v. Sheth Manilal Ranchhoddas Vishram Bhavan Trust reported in 198 ITR 598. The view taken by the High Court in the said judgment is approved by the Supreme Court in case of Commissioner of IncomeTax v. Rajasthan and Gujarati Charitable Foundation reported in [2018] 402 ITR 441 (SC).
5. In the result, we do not find any question of law arises. Tax Appeal is dismissed.
(AKIL KURESHI, J) (B.N. KARIA, J) ANKIT SHAH Page 4 of 4