2012 (3) TMI 620

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....learned CIT (A) has grossly erred in not appreciating the fact that the Appellant Authority has been created with the object of general public utility which is a charitable object within the meaning of Section 2(15) of the Income Tax Act, 1961. Ground No.2: On the facts and circumstances of the case and in law, the learned CIT (A) has grossly erred in holding that the Appellant Authority is a business entity earning profits and gains. Ground No.3: On the facts and circumstances of the case and in law, the learned CIT (A) has grossly erred in upholding the computation of income at Rs. 4,94,67,240/- by the A.O, by rejecting the principle of diversion of funds to the Infrastructure Development Fund by an ove....

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....ority, it is bound as per directives of State Govt. G.O to transfer specific percentage of its income to the Infrastructure Development Fund. Therefore at the time of receipt of income, there is statutory obligation attached to it to transfer specific percentage of that income to the reserve and only the balance amount is income in the hands of Authority. Though the funds continue to remain with the appellant, the same are administered strictly by following the instructions of State Government. 2.3 The receipts of the Appellant Authority are by way of Map fees, Supervision charges, Stacking Fees, Land Conversion Charges, Compounding etc. for which the State Govt. has authorized it by Special Act and the expenditure has to be done on the ....