TaxTMI 
TaxTMI 
2018 (4) TMI 192
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....08 (i) Whether under the facts and circumstances of the case and in law the Tribunal was justified in holding that the expenditure of Rs. 11,74,15,986/- incurred by the assessee is of revenue in nature ignoring that the expenditure was incurred in bringing the inventories to the present location and condition as stipulated in the Accounting Standard-2 of ICAI and therefore are part of closing stock? (ii) Whether under the facts and circumstances of the case and in law the Tribunal was justified in deleting the disallowance made out of depreciation claimed even when it was not claimed on written down value of the asset? (iii) Whether under the facts and circumstances of the case and in law the Tribunal was justified in confirming the order of CIT(A) on the issue wherein the additions of Rs. 18,31,68,938/- made in the value of closing stock was reduced arbitrarily to Rs. 10,87,50,513/-thereby granting a whopping relied Rs. 7,44,18,425/- without appreciating that the value of opening stock has to be taken as closing stock of preceding year?" D.B. ITA No. 73/2011 "Whether on the facts and circumstances of the case and in law, the Ld. ITAT was right in holding that the appella....
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....ITAT was not perverse, unjust, arbitrary and contrary to material on record? (3) Whether on the facts and circumstances of the case, the appellant is not a State as per Article 12 of the constitution of India and therefore exempt from income tax under Article 289(1) of the Constitution of India? (4) Whether on the facts and circumstances of the case, the Ld. ITAT was correct in law in holding that the appellant is liable to tax under the Income Tax Act, 1961?" D.B. ITA No. 392/2011 (1) Whether under the facts and circumstances of the case, and in law the ld. Tribunal was justified in not upholding the order of the CIT (A) whereby the rental income of Rs. 13,26,069 was treated as "Income from house property" u/s 22 as against "business income"? (2) Whether under the facts and in the circumstances of the case, and law the ld. Tribunal was justified in not holding that the deficit of Rs. 1,26,07,674/- on development work in progress being not allowable u/s 14A of the Act?" 3. Counsel for the appellant has taken us to the definition of local authority under the Income Tax Act and contended that in view of the proviso added to explanation of Section 10(20) of the Income Tax A....
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.... a Municipal Committee, District Board, or Body of Port Commissioners, but, possessing one essential feature, namely, that it is legally entitled to or entrusted by the Government with, the control and management of a municipal or local fund. What then are the distinctive attributes and characteristics, all or many of which a Municipal Committee, District Board or Body of Port Commissioners shares with any other local authority? First, the authorities must have separate legal existence as Corporate bodies. They must not be mere Governmental agencies but must be legally independent entities. Next, they must function in a defined area and must ordinarily, wholly or partly, directly or indirectly, be elected by the inhabitants of the area. Next, they must enjoy a certain degree of autonomy, with freedom to decide for themselves questions of policy affecting the area administered by them. The autonomy may not be complete and the degree of the dependence may vary considerably but, an appreciable measure of autonomy there must be. Next, they must be entrusted by Statute with such Governmental functions and duties as are usually entrusted to municipal bodies, such as those connected with ....
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....e assessment proceedings the AO noted from the Income & Expenditure Account that the appellant had treated the land available with it as stock in trade for the year under reference. He further found that opening stock of the land was shown at 112.11 crore and closing stock at 107.06 crore. He asked the appellant to provide the details of working out such valuation. In response thereof the ld. AR informed that the appellant had valued the land according to reserves price of each scheme determined in the Trust Meeting. It was also explained that during the relevant period no change in reserve price was made. In this regard the ld. AR submitted the copy of decision of the meeting of the trust held on 29-5-1999. However, the AR could not file the basis of such reserve price as determined by the Trust. The AO found that as per provision of Rule 6(2) of Rajasthan Improvement Trust (Disposal of Urban Land) Rules, 1974, the reserve price was required to be worked out after adding the following amounts:- (i) Cost of undeveloped land this would be subject to change to the extent of final cost of compensation determined by the competent court, (ii) Cost of development based on the preva....
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....7,06,84,101) The above calculation made contains an error even as per method adopted by AO i.e. increase in the value of the opening stock at Rs. 3,20,87,56,328/- is included in closing stock without considering that, part of the land was sold during the year. The correct calculation of the value of closing stock by applying method adopted by AO would be at 4,31,82,76,563/- Thus amount to be increased for value of opening stock remaining in closing stock is Rs. 3,06,44,23,524/- & not of Rs. 3,20,87,56,328/-. The value of closing stock accordingly, works out to Rs. 4,31,82,76,563/- as against Rs. 4,46,26,09,367/- worked out by the AO resulted in the year valuation of closing stock by Rs. 14,43,32,804/- (4462609367-4318276563). (i) Similarly when opening stock of Rs. 1,12,12,783/- is revalued at Rs. 4,32,98,69,111/- i.e. increased by 286.21% the closing stock of Rs. 1,07,06,84,101/- also needs to be increased by same percentage which works out to Rs. 3,06,44,23,524/- as against Rs. 3,20,87,56,328/- considered by the AO. The closing stock is thus overvalued by Rs. 14,43,32,804/- (3,20,87,56,328-3,06,44,23,524). (ii) As per the generally accepted accounting principles and Acc....
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..... reported in 2006 (5) SCC 100 wherein it has been held as under:- "Similarly, the decision in New Delhi Municipal Council v. State of Punjab and Ors. (supra) does not advance the case of the appellant. It was held that the property/ municipal taxes levied by the New Delhi Municipal Council under the relevant Act constituted Union taxation within the meaning of Clause (1) of Article 289 of the Constitution of India. The levy of property taxes under the aforesaid enactments on lands or buildings belonging to the State Government was invalid and incompetent by virtue of the mandate contained in Clause (1) of Article 289. However, if any land or building is used or occupied for the purpose of any trade or business, meaning thereby a trade or business carried on with profit motive, by or on behalf of the State Government, such land or building shall be subject to the levy of the property taxes levied by the said enactments. In other words, State property exempted under Clause (1) means such property as is used for the purpose of the Government and not for the purpose of trade or business. That was a case where the question arose in relation to the levy of property tax on lands and bu....
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.... of the judgment and contention raised by the parties and ultimately that the issue is squarely covered against the assessee. He has also relied upon the decision of the Tribunal in M/s Jammu Development Authority, Jammu vs. Commissioner of Income Tax ITA No. 30 (Asr)/2011 decided on 14th June, 2012. wherein it has been held as under:- "It would thus be seen that the income of a local Authority chargeable under the head "income from house property", "Capital gains" or "Income from other sources" or from a trade or business carried on by it was earlier excluded in computing the total income of the Authority of a previous year. However, in view of the amendment with effect from April 1, 2003, the Explanation "Local Authority" was defined to include only the Authorities enumerated in the Explanation, which does not include an Authority such as the Jammu Development Authority. At the same time section 10(20A) which related to income of an Authority constituted in India by or under any law enacted for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, which before the a....