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Both the appeals are preferred by the assessee. ITA No.2038/Del/2017 pertains to Assessment Year 2012-13 whereas Since, both the appeals involved identical issues, the same were heard together and are being disposed by this common order for the sake of convenience.

2.0 First we take up appeal for Assessment Year 2012-13 bearing ITA No.2038/Del/2017.

2.1 The brief facts of the case are that the assessee is a Development Authority constituted under the U.P. Urban Planning and Development Act, 1973 with the object of development of areas according to plan and for that purpose, the authority has been empowered to acquire, hold, manage and dispose land and other properties to carry out building activities, engineering, mining and other operations. The assessment for Assessment Year 2012-13 was framed u/s 147/143(3) of the Income Tax Act, 1963 (hereinafter M/s Ghaziabad Development Authority Vs. ACIT/ DCIT called 'the Act') after disallowance of assessee's claim of exemption u/s 11 of the Act and after making a further addition of Rs.3,46,03,14,429/- being net amount transferred to Infrastructure Development Fund as income of the Ghaziabad Development Authority. The Assessing Officer (AO) disallowed the claim of exemption u/s 11 of the Act on the ground that registration u/s 12AA granted to the assessee stood cancelled vide order dated 31.03.2014 passed by the Ld. CIT, Ghaziabad. Further, the Assessing Officer also disputed the charitable nature of activities carried out by the assessee in terms of Section 2(15) of the Act. 2.2 Aggrieved, the assessee preferred an appeal before the Ld. CIT(A), who dismissed the appeal. The Ld. CIT(A) not only upheld the issuance of notice u/s 148 of the Act but also upheld the rejection of exemption u/s 11 of the Act and also upheld the addition on account of transfer of funds amounting to Rs.3,46,03,14,429/- transferred to Infrastructure Development Fund.

M/s Ghaziabad Development Authority Vs. ACIT/ DCIT 6.0 Ground Nos.7 and 8 relate to addition made by treating fund earmarked for Infrastructure Development Fund to the income of the assessee. The Ld. AR submitted that the funds transferred to Infrastructure Development Funds cannot be considered as income as the same does not belong to the assessee and that there was an overriding obligation to spend this amount towards specified and approved infrastructure project. It was, accordingly, argued by the Ld. AR that Infrastructure Fund was of capital nature. It was argued that this fund was created by the State Government for the development of infrastructure of cities and that the same was under

the control and supervision of the State Government and, thus, the assessee was merely a trustee of the said fund.

7.0 Per contra, the Ld. CIT-DR submitted that the amount transferred to Infrastructure Development Fund was out of income earned by the assessee as such it was merely an application of income. The Ld. CIT-DR refuted the argument of the Ld. AR that there was an overriding title for the purpose of transfer of funds to the Infrastructure Development Fund. The Ld. CIT-DR highlighted the fact that the said infrastructure fund was just a separate bank M/s Ghaziabad Development Authority Vs. ACIT/ DCIT account which contained part of the receipts of the assessee which was subsequently used for incurring expenses in the normal course and, thus, by no stretch of imagination it could be said that it was a earmarked fund having an overriding title.

14. Ld. DR, however, submitted that this issue has been decided in detail by the CIT(Appeals), therefore, the order may be maintained.

15. After considering the rival submissions, we are of the view that this issue also requires reconsideration at the level of the M/s Ghaziabad Development Authority Vs. ACIT/ DCIT AO. The assessee has now been granted registration u/s 12AA of the Act and thus, assessee is entitled for exemption from income u/s 11 of the Act as per law. Even if the infrastructure reserve fund may be treated as income of assessee, it will have to be examined, whether, assessee is entitled for exemption u/s 11 of the Act on the same income. Therefore, it would depend upon fundings with regard to exemption u/s 11 of the Act. We have already restored the issue of exemption u/s 11 of the Act to the AO for fresh decision as per law. Further, the authorities below have not appreciated the fact that assessee claimed that infrastructure fund was received for development activities from the State Authorities, the assessee has to spend the amount on the same as per approval of the State Authorities. Thus, there may not be any profit element out of the same sources. It may also be noted here that whatever amount has been spent by assessee on the same issue, the AO has accepted that assessee spent the same amount as per the directions of the State Authorities. Then in that event it is difficult to believe that part amount is capital receipt and part would be Revenue in nature. Therefore, there was no justification for Ld. CIT(A) to hold that the impugned receipt is Revenue in nature. This issue also requires reconsideration in view of the fact that assessee is entitled for exemption u/s 11 of the Act. We, accordingly, set aside the orders of the authorities below on the issue of infrastructure fund as well and restore the issue to the file of AO with direction to redecide the issue as per law by giving reasonable opportunity of being heard to the assessee." 8.2 In the light of the orders of the Co-ordinate Bench as reproduced in the preceding paragraphs in the case of Saharanpur Development Authority (supra) and Khurja Development Authority M/s Ghaziabad Development Authority Vs. ACIT/ DCIT (supra), we are of the view that source of funds transferred to Infrastructure Development Fund, control over the same and obligation of its utilization is required to be examined to ascertain the real nature of Infrastructure Development Fund. Accordingly, we direct the Assessing Officer to adjudicate the issue afresh keeping in mind the ratio laid down by the Co-ordinate Benches of this Tribunal in Saharanpur Development Authority (supra) and Khurja Development Authority (supra). Accordingly, ground Nos.7 & 8 are also allowed for statistical purposes.