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of <h1>ITAT remands case for fresh assessment directing reexamination of expenses & allowance of depreciation</h1> <h3>M/s. Haridwar Development Authority Versus Addl. CIT, Haridwar.</h3> The ITAT allowed the appeals for statistical purposes, directing the Assessing Officer to conduct a de novo assessment. The appellant was instructed to ... - Issues involved: Appeal against CIT (Appeals) order for Assessment Years 2007-08 and 2008-09.Issue 1: Charitable object under section 2(15) of Income Tax ActThe appellant, an Development Authority established by the Uttar Pradesh Government, contended that it was created for general public utility, a charitable object under section 2(15) of the Income Tax Act. The Authority had been granted exemption u/s 12AA by CIT Dehradun. The CIT (A) did not acknowledge this charitable purpose, leading to a dispute.Issue 2: State Government's power to issue directionsThe appellant argued that the State Government had absolute power to issue directions to the Authority, and by doing so, it intended to override specific provisions of the Act related to the Authority's funds. The appellant claimed that the State Government's order did not have the authority to divert funds by overriding title.Issue 3: Legal identity of Infrastructure FundThe CIT (A) contended that the 'Infrastructure Fund' did not have a separate legal identity and was an integral part of the assessee. The appellant challenged this assertion, highlighting the distinct nature of the Infrastructure Fund.Issue 4: Addition on account of fund diversionThe CIT (A) upheld the addition of a specific amount by the Assessing Officer due to the diversion of funds to the Infrastructure Development Fund through an over-riding title as per the State Government order. The appellant disputed this addition, emphasizing the legality of the fund allocation.The ITAT, considering the previous orders and directions, decided to restore the issues back to the Assessing Officer for a de novo assessment. If the appellant obtained registration u/s 12AA for the relevant assessment years, the Assessing Officer was instructed to reexamine whether the expenses were for charitable purposes. If deemed capital, the Assessing Officer should determine the allowance of depreciation. Consequently, both appeals were allowed for statistical purposes, and the matters were set aside to the Assessing Officer for further assessment.
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