TaxTMI 
TaxTMI 
2018 (11) TMI 778
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....sessee thus not attracting section 61 of the Income-tax Act, 1961. It has been further held that the exception contained in section 62 of the Income-tax Act, 1961, is inapplicable. Hence it has been held that all income from the said lands must be taxed in the hands of the assessee corporation. These conclusions and reasonings are incorrect. 3. Further, in view of section 60 of the Income-tax Act, 1961, if the ownership of the lands is with the Government of Maharashtra, income from the lease premiums and all other consequential incomes are not taxable in the hands of the assessee corporation. The learned Assessing Officer and CIT(A) erred in not noticing this legal position. 4. (a) Let it be assumed without conceding that the ownership of the lands vests in the corporation. It is submitted that such ownership/vesting in assessee corporation is by way of legal obligation in the nature of trust. (b) This has been so held by the Hon'ble ITAT in Order dated 16.03.2013 in appeal ITA 6752/Mum/2011, for AY 2008-09. This has been applied and followed in Hon'ble ITAT's order dated 27.03.2015 in appeal no. 6552/Mum/2014 for this very assessment year, while remanding the matter back to....
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....O ought to have given a deduction of a sum of Rs. 10,42,85,70,248/- being the increase in the asset side of the balance sheet vide Serial Nos. 1, 2, 3, 4, and 10. 12. The learned Assessing Officer and CIT(A) erred in not noticing that in any case, the learned AO erred in enhancing the income from Rs. 1,701.77 crores to Rs. 2,456.50 crores in a remand proceeding, pursuant to a remand order passed by the Hon'ble ITAT in an appeal filed by the assessee. 13. The learned Assessing Officer and CIT(A) erred in not allowing the depreciation amounting to Rs. 12,34,18,456/- as application of income, a deduction already allowed by ITAT in its order dated 27.03.2015, vide its paragraph 35 thereof. 14. The learned Assessing Officer and CIT(A) erred in bringing to tax an amount of Rs. 4,040,249,074/- being the interest on deposits, in the hands of the assessee corporation. In view of the foregoing, it is respectfully prayed that this Hon'ble Tribunal may be pleased to set aside the impugned order in appeal passed by the CIT(A) and allow the appeal with consequential relief, if any." 2. Briefly stated, the assessee viz. Maharashtra Industrial Development Corporation (for short 'MIDC') wh....
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....ore him viz. (i) that being a local authority the amendment to provisions of Sec.2(15) with effect from 01.04.2009 would not be applicable to its case; (ii) that being an agency of the State Government of Maharashtra its income was not taxable; (iii) that it was not engaged in any commercial activity; and (iv) that there was no profit motive in any of its objects or activities at all. However, the A.O not being persuaded to subscribe to the aforesaid claim of the assessee concluded that as the assessee was hit by the amendment to Sec. 2(15) which was made available on the statute with effect from 01.04.2009, therefore, having lost its charitable character within the meaning of Sec.2(15) of the Act for the year under consideration, it was not entitled for exemption under Sec.11 in view of the provisions of Sec.13(8) of the Act. On the basis of his aforesaid observations the A.O rejected the claim of exemption raised by the assessee under Sec.11 of the Act and accordingly brought its entire income to tax. 4. The A.O further observed that the assessee was an industrial development corporation which would on a regular basis acquire land and develop the same into industrial estates/are....
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...., development charges, interest on deposits etc. belonged to the State Government, for the reason that there was no such legal obligation existing in the MIDC Act. Accordingly, the CIT(A) upheld the assessment of Rs. 1701.61 crores in the hands of the assessee. 6. The assessee carried the matter in appeal before the Tribunal. The order of the CIT(A) was assailed primarily on three grounds viz. (i) that as the activities carried on by the assessee did not fall in the category of "trade, commerce or business", therefore, it would not be hit by the proviso to Sec. 2(15) of the Act; (ii) that the assessee was performing sovereign functions of the government; and (iii) that the activities carried on by the assessee were both on its own account and also as an agent of the Government of Maharashtra. The Tribunal vide its order passed in ITA No. 6552/Mum/2014, dated 27.03.2015, after deliberating at length on the aforesaid contentions advanced by the assessee in respect of the issues under consideration was however not persuaded to subscribe to the same. The Tribunal finding itself to be in agreement with the view arrived at by the CIT(A) that the activities of the assessee were commercia....
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....rved by the A.O that the assessee by consistently following the aforesaid accounting policy had allowed surplus to accumulate in its 'balance sheet' as a liability. The A.O while dislodging the claim of the assessee that it was acting as an agent of the Government of Maharashtra, observed that no principal-agent relationship did exist between the Government of Maharashtra and the assessee viz. MIDC. Rather, it was noticed by the A.O that the aforesaid accounting practice of crediting receipts as deposit in the 'balance sheet' was also consistently being followed by the assessee also in respect of the receipts/income received from non-government agencies for works executed for them. On the basis of the aforesaid deliberations the A.O concluded that as the accounting policies followed by the assessee were defective, hence its taxable income could not be deduced from its financial statements. It was also observed by the A.O that the assessee had wrongly abated cost of fixed assets against recovery of charges for utilization of assets. The A.O after deliberating at length on the issue under consideration, observed that though the receipts by the assessee were its income, however the la....
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.... land to the assessee, nor any such land which was already belonging to the Government of Maharashtra had been placed at the disposal of the assessee i.e. MIDC as per Sec. 43-1A of the MIDC Act. The Ld. A.R further in order to drive home his contention that in order to facilitate development of the land the State Government would only hand over the possession of the land to the assessee corporation i.e. MIDC and not the ownership, submitted that the scheme of the MIDC Act clearly revealed that the land required for development would be identified and thereafter acquired by the State Government, followed by handing over of only the possession of the same to the assessee corporation for the purpose of carrying out the development on the same. The Ld. A.R. explaining the functioning of the assessee corporation i.e MIDC, submitted that the assessee after developing the land would lease the same to the occupiers as per the powers vested with it under Sec. 14 of the MIDC Act. The Ld. A.R in order to fortify his claim that the ownership of the land remained with the Government of Maharashtra raised two fold contentions viz. (i) the 7/12 extracts clearly revealed that the assessee was only....
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....), 33(2), 36(1), 36(2) and 36(3) of the MIDC Act the State Government remained under an obligation to pay compensation on the acquisition of land. It was submitted by the Ld. A.R that the fact that the compensation was paid by the assessee corporation on behalf of the State Government was duly recognized in its 'balance sheets' for the last 40 years and was reflected as an advance recoverable/receivable from the government by the assessee corporation i.e. MIDC on the asset side. The Ld. A.R further in order to impress upon us that the assessee was only handed over the possession of the land by the State Government and as such could not be regarded as its owner, took support of the Government Regulation No. IDC/067/38498, dated 16.08.1967 placed at Page No. 860 -863 of Volume IV of assesse's "Paper book" (for short 'APB'). The Ld. A.R also took us through a resolution dated 11.09.1986 (Page 869-877) of APB-Volume IV, wherein it was provided that the assessee held the land only as an agent for the State Government for undertaking the functions assigned to it under the MIDC Act. It was submitted by the Ld. A.R that as per Sec. 18 of the MIDC Act the aforesaid resolution was binding on....
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....f the ownership of the lands by the State Government to the assessee corporation viz. MIDC, submitted that the same was a conscious legislative and administrative decision in order to ensure that the said lands were not hit by the taxation provisions of the Mumbai Municipal Corporation Act, 1888 (BMC Act) and Maharashtra Municipal Corporation Act, 1974 (BPMC Act). On the basis of his aforesaid contention, it was submitted by the Ld. A.R that under both of the aforesaid statutes the government properties were exempted from levy of property taxes. In the backdrop of the aforesaid settled position of law, it was submitted by the Ld. A.R that if the lands under consideration would had belonged to the assessee then the same would have been subjected to levy of property tax, which however was not the case. The Ld. A.R in order to demonstrate that the assessee corporation i.e. MIDC did not have any unfettered and unrestricted rights over the lands under consideration, drew our attention to Sec. 19, 39 and 56 of the MIDC Act, which revealed viz. (i) that the assessee was bound by the provisions of the MIDC Act when carrying out its function of industrial development; and (ii) the lands mad....
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....ed and only the possession is transferred. It was submitted by the Ld. A.R that the Hon'ble Apex Court in the backdrop of its aforesaid observations had concluded that the Government continued to be the owner of the land even if the same was vested with the Improvement Trust for the purpose of development. The Ld. A.R. referring to the facts of the case before the Hon'ble Apex Court, submitted that it was held by the Court that market building that was constructed on the leased land would also belong to the government. The Ld. A.R further referred to the order passed by a coordinate bench of the Tribunal in the case of City & Industrial Development Corpn. of Maharashtra Ltd. v. Asstt. CIT [2012] 138 ITD 381 (Mum.), wherein it was held that as the functions undertaken by an industrial development corporation for development of industrial infrastructure were to be regarded as carrying on of sovereign functions, hence any surplus arising therefrom would not be subject to income tax. It was the claim of the Ld. A.R that as the assessee corporation had been setup on similar lines as that of City and Industrial Development Corporation of Maharashtra Ltd., except that the latter was a com....
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....eduction for the expenditure incurred on earning of the same. The Ld. A.R. in order to fortify his aforesaid claim took us through a computation of income, which as per him would reveal the correct working of the income as per the version of the A.O (Page 878) of APB-Volume V. The Ld. A.R to support his aforesaid contention submitted that even if the sums collected by the assesses corporation were to be treated as its income, then the administrative cost incurred by it till the remitting of the entire sums collected on behalf of government were to be allowed as a deduction while computing the taxable income of the assessee corporation. The ld. A.R in support of his aforesaid contention relied on the judgment of the Hon'ble Supreme Court in the case of Calcutta Co. Ltd. v. CIT [1959] 37 ITR 1. Alternatively, it was submitted by the Ld. A.R that as the sums were to be ultimately paid to the Government of Maharashtra, therefore, the said receipts would not be taxable in the hands of the assessee due to the principle of overriding title. The Ld. A.R. in the backdrop of his claim that as the income received by the assessee on behalf of the Government of Maharashtra was parked by way of ....
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....essee, however both the A.O and the CIT(A) had erred in not following the directions of the Tribunal and had wrongly declined the depreciation of Rs. 12,34,18,456/- as claimed by the assessee. Lastly, it was submitted by the Ld. A.R that Article 298 of the Constitution of India created a distinction between carrying on of trade or business on the one hand and acquisition of property, holding and disposal of projects on the other hand. In the backdrop of his aforesaid contention, it was the claim of the Ld. A.R that by way of an analogy the "trade" or "business" referred to in the provisos to Sec. 2(15) of the Act did not cover the dealings in land carried on by the assessee corporation on behalf of the State Government. 10. Per contra, the Learned Departmental Representative (for short 'D.R') submitted that though there was no dispute as regards the principle that an income is liable to be brought to tax in the hands of the real owner alone, but as the assessee was the real owner of the lands under consideration, therefore, no infirmity did emerge from the order of the A.O in assessing the receipts viz. lease premiums, interest on bank deposits etc. as the income of the assessee. ....
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....h Court of Bombay in the case of M/s Skoda Auto India (P.) Ltd. v. State of Maharashtra [Writ Petition No. 4513 of 2010, dated 31.01.2011] (a matter relating to property tax payable to the panchayat), submitted that the High Court after observing at Para 6 of its order that the land was 'handed over to MIDC', had thereafter stated at Para 16 that the land belonged to the State Government/MIDC. Still further, the Ld. D.R taking support of the judgment of the Hon'ble Supreme Court in the case of Digamber v. State of Maharashtra [Civil Appeal No. 5346 of 2013, dated 01.08.2013], submitted that the Hon'ble Apex Court had observed at Para 9 and Para 25 of its order that the State Government had acquired the land in favour of MIDC. The Ld. D.R further referring to Sec. 32(7) of the MIDC Act, submitted that the same contemplated compulsory transfer of land by the Government to the assessee i.e. MIDC. The Ld. D.R strongly objected to the affidavit of Mrs. Vaidehi Ranade, General Manager (land acquisition) on two counts viz. (i) the affidavit though was an additional evidence, however no application seeking liberty of the Tribunal for admission of the same was filed by the assessee; and (ii....
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....e. The Ld. D.R adverting to accounting practice followed by the assessee wherein the revenue receipts had directly been taken by the assessee to its 'balance sheet', submitted that the said methodology had no sanction of law and as such could not be acted upon for deducing the true income of the assessee. It was submitted by the Ld. D.R that though the deposits received by the assessee from various plot holders for executing certain works for them could be of a capital nature for such plot holders, but the corresponding receipts were certainly revenue receipts for the assessee. In the backdrop of the aforesaid contention it was submitted by the Ld. D.R that as the method of accounting could not be decisive of determining the income of the assessee, thus the revenue receipts in the hands of the assessee had rightly been assessed as the income of the assessee by the A.O. It was further submitted by the Ld. D.R that even otherwise the assessee had not shown its entire receipts in its Income & Expenditure Account. In order to fortify his aforesaid contention, the Ld. D.R submitted that the assessee had only accounted for part of the water receipt charges in the Income & expenditure acc....
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....ting the claim of the assessee that as the Government had only vested the possession of the lands with assessee with no beneficial interest having been conferred in its favour, hence pursuant to a fiduciary relationship created between it and the government, the ownership of the sums received from leasing of the lands got diverted at source to the government. The ld. D.R in support of his aforesaid contention submitted that as per Sec. 20 of the MIDC Act the money received from the sale of plots became the assesses own money by operation of law. As regards the contention of the assessee that the A.O had erred in assessing the gross receipts as its taxable income, the Ld. D.R submitted that the said issue can be remanded for adjudication by the A.O. However, it was submitted by the Ld. D.R that in case instances of expenditure incurred for development of land which had not been subsequently let out/sold emerges, then the said expenditure could not be allowed as a deduction. The Ld. D.R further meeting out the claim of the assessee that the receipts were not liable to be taxed in its hands due to the principle of overriding title submitted that an overriding title can only be created....
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....ourt in the case of Trig Guards Force Ltd. v. MIDC [Civil Appeal Nos. 984-986 of 2005, dated 06.12.2007] submitted that on a perusal of the said judgment it could safely be gathered that MIDC was itself using the powers given under the MRTP Act. On the basis of the aforesaid contentions, it was submitted by the Ld. D.R that as the A.O had rightly assessed the receipts as the income of the assessee corporation, therefore, no infirmity did emerge from his order passed under Sec. 143(3) r.w.s. 254 of the Act while giving effect to the order passed by the Tribunal in the first round of appeal. The Ld. D.R submitted that as the appeal filed by the assessee was devoid of any merit, thus the same was liable to be dismissed. 11. We have heard the authorized representatives for both the parties at length, perused the orders of the lower authorities and the order passed by the Tribunal in the first round of appeal, as well deliberated on the exhaustive submissions placed on record and judicial pronouncements relied upon by the representatives for both the parties before us. We find that the assessee has primarily sought our indulgence in the present appeal for adjudicating the validity of t....
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....ate Government as a liability in the 'balance sheets' of the assessee corporation in the past years, and holding to the contrary and assessing the same as the income of the assessee for the year under consideration. We further find that independent of assailing the order of the lower authorities on the ground that they had erred in assessing the income arising therefrom viz. lease premiums, rent, interest income on bank deposits etc. as the income of the assessee corporation, it has also challenged the quantum of additions made in its hands viz. (i). the recovery/recoupment of costs of Rs. 32,28,67,135/-received by the assessee from the lessees and assessed as its income; (ii). the failure on the part of the lower authorities in not giving a deduction of a sum of Rs. 1042,85,70,248/- being the increase in the 'balance sheet' of the assessee; (iii). the enhancement of income carried out by the lower authorities from the original assessed income of Rs. 1,701.77 crores to an amount of Rs. 2,456.50 crores while giving effect to the order of the Tribunal; (iv) the error on the part of the lower authorities in not allowing depreciation of Rs. 12,34,18,456/- despite direction by the Tribu....
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....ra Industrial Development Corporation Act, 1961" [for short "MIDC Act"]. We find from a perusal of the MIDC Act that the assessee corporation viz. MIDC had been established for securing and assisting rapid and orderly establishment and organisation of industries in industrial areas and industrial estates in the State of Maharashtra. On a perusal of Sec. 3(2) of the MIDC Act, it emerges that the assessee corporation viz. MIDC is competent to acquire, hold and dispose off property, both moveable and immovable, and to contract and do all things necessary for the purposes of the Act. Still further, a perusal of the functions of the assessee corporation as contemplated in Sec. 14(ii) of the MIDC Act reveals that the same particularly includes viz. (i). establishing and managing industrial estates at places selected by the state government; (ii). developing industrial areas selected by the State Government for the purpose and make them available for undertakings to establish themselves; and (iii). undertaking schemes or works, either jointly with other corporate bodies or institutions, or with Government or local authorities, or on an agency basis, in furtherance of the purpose for which....
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...., drainage, water supply, providing of street lighting etc in such industrial estates and industrial areas on the plot holders or other persons receiving benefit of said services or amenities. Further, perusal of Sec. 19 of the MIDC Act reveals that the property, fund and other assets vesting in the assessee corporation shall be held and applied by it, subject to the provisions and the purposes of the said Act. 14. We further find from a perusal of Sec. 32 of the MIDC Act that in case the State Government is of the opinion that any land is required for the purpose of development by the assessee corporation, or for any other purpose in furtherance of the objects of the said Act, then after putting the owner of the land or any other person interested therein to notice as regards its decision of acquiring such land, calling for his objections and disposing off the same after affording an opportunity of being heard to such person, the State Government shall acquire such land by publishing a notice in the official gazette. On a perusal of sub-section (4) of Sec. 32 of the MIDC Act, it emerges that when a notice under Sec. 32(1) of the Act is published in the official gazette, the land ....
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....rest determined at the rate of four percent per annum from the date of taking of possession of the same till the said amount is paid or deposited. 15. We thus, in the backdrop of our aforesaid observations that the land acquired is vested with the State Government, therein deliberate upon the issue that on the transfer of the land to the assessee corporation for the purpose for which it was acquired by the State Government under Sec. 32 of the MIDC Act, or placing of the land vested in the State Government at the of the assessee corporation within the meaning of Sec. 43-1A of the MIDC Act, can in either of the situations be construed as a 'transfer' of the ownership of the land to the assessee corporation, which resultantly would lead to assessing of the income arising therefrom viz. lease premiums, rent, interest income from the funds parked as deposits with the bank etc., as the income of the assessee corporation. We have perused the copy of the 7/12 extracts placed on record by the assessee (Page 338- 342 and Page 792-799 of 'APB'), which as claimed by the ld. A.R reveals that the assessee in the said revenue records is only stated to be an occupier of the land (kabzadhar), whi....
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....corporation for the furtherance of the objects of the MIDC Act viz. (i) in general to promote and assist in the rapid and orderly establishment, growth and development of industries in the State of Maharashtra, and in specific (ii). to establish and manage industrial estates at places selected by the State Government; (iii). develop industrial areas selected by the State Government for the purpose and make them available for undertakings to establish themselves; and (iv). to undertake schemes or works, either jointly with other corporate bodies or institutions, or with Government or local authorities, or on an agency basis, in furtherance of the purposes for which the corporation is established and all matters connected therewith. We are of the considered view that a bare perusal of the scheme of the MIDC Act, and the absence of any instrument of transfer evidencing vesting of the ownership of the land in favour of the assessee corporation, both militates against the observations of the lower authorities that the ownership of the land had been transferred to assessee corporation. We thus, in the backdrop of our aforesaid observations are of the considered view that as neither there....
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....o place it at the disposal of the State Government upon such terms and conditions as may be mutually agreed upon. We have deliberated at length on the aforesaid statutory provisions viz. Sec. 32 and Sec. 43-1A, and are of the considered view that in either of the situations contemplated therein viz. (i). that lands are compulsorily acquired by the State Government under Sec. 32 of the MIDC Act for development of the same by the assessee corporation, and are thereafter by way of a notification published in the official gazette transferred to the assessee corporation for the purpose for which it was acquired; or (ii). the lands vested with the State Government are by way of a notification published in the official gazette placed at the disposal of the assessee corporation, for being developed and dealt with by it in accordance with the regulations made and directions given by the State Government in this behalf, the assessee as per sub-section (3) of Sec. 43-1A remains under an obligation to place such land at the disposal of the State Government, as and when the same is required by the latter. Thus, from a careful consideration of the restrictive covenant contemplating the fettered ....
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....58 of the MIDC Act provided that in case of dissolution of the assessee all its assets would go to the State Government, hence it being a "revocable trust" would not be eligible for exemption under Sec. 11 of the Income-tax Act, 1961. We find that the Tribunal expressing its disagreement with the view taken by the CIT(A) had observed that as "revocation" and "winding up" have different meaning and purpose, thus the fact that dissolution clause viz. Sec. 58 of the MIDC Act only provided for the manner of distribution of assets in the case of winding up, and every trust deed or memorandum is expected to have such kind of clause, therefore, the same cannot be construed for characterising the assessee as a "revocable trust" and therein disentitling the assessee of its claim of exemption under Sec. 11 of the Income-tax Act, 1961 on the said count. We find that the aforesaid observations which were recorded by the Tribunal in context of Sec. 58 of the MIDC Act, having been rendered in context of adjudicating the eligibility of the assessee for claim of exemption under Sec. 11 on a reading of the "dissolution clause", thus would have no bearing on our observations recorded on a perusal of....
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....icable to the contracts made by a specified authority in exercise of powers conferred by a statute. We have perused the commentary of Dr. Durga Prasad Basu and Shri. M.P Jain, to which our attention was drawn by the ld. A.R (Page 1004 and 1015 of 'APB'). On a perusal of the aforesaid commentary, which though would only be of a persuasive value, it emerges that Article 299(1) applies only to a contract made in exercise of the executive power of the Union or State and would not thus include a contract which is made by a specified statutory authority in exercise of the executive power of the Union or of a State. We find that the Hon'ble Supreme Court in the case of State of Haryana v. Lal Chand 1984 AIR 1326, vide its order dated 02/05/1984, had observed that Article 299(1) applies to a contract made in exercise of the executive power of the Union or the State, but not to a contract made in exercise of a statutory power. In the backdrop of the aforesaid settled position of law, we are of the considered view that as the assessee corporation is authorised to enter into lease agreements by virtue of Sec. 14, 15 and 37 of the MIDC Act, thus the contracts made thereof being of a statutory ....
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....et is devoid of any force, hence the same is rejected. 19. We shall now deliberate on the reliance placed by the ld. D.R on the judgment of the Hon'ble High Court of Bombay in the case of Skoda Auto India (P.) Ltd. (supra). As regards the reference to Para 6 of the said decision, we find that the High Court while referring to the facts of the case had observed that the State Government of Maharashtra after acquiring the land after following the due process under Sec. 32(2) of the MIDC Act, vide notification dated 04.12.1997, had handed over the same to the assessee corporation viz. MIDC, which thereafter had leased the same to Skoda Auto India Pvt. Ltd. We are of the considered view that such acquiring of land by the State Government and handing over of the same to the assessee corporation, which thereafter had leased it to the aforementioned private party is absolutely in accord with the scheme of the MIDC Act, as had been averred by the assessee before us. We are unable to comprehend that as to how the ld. D.R had construed the said facts for arriving at a self suiting, but a baseless observation that the same proved that the assessee corporation was the owner of the land under ....
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....the reference to the aforesaid facts involved in the case before the Hon'ble Supreme Court would advance the case of the revenue in context of the issue under consideration?. As regards the observations of the Hon'ble Supreme Court at Para 25 of its decision as had been relied upon by the ld. D.R, wherein the court had directed MIDC to issue the demand draft in respect of the compensation to the appellant, we are of the considered view that the same also would not advance the case of the revenue and therein prove that the assessee corporation was held to be the owner of the land under consideration. We may herein observe, that a perusal of the accounts of the assessee corporation which are subject to audit by C & AG, reveals that the assessee corporation had consistently been making payments/advances on behalf of the State Government which are reflected as recoverable on the asset side of its 'balance sheet'. Thus, in the backdrop of the aforesaid facts, in the absence of details as regards the treatment given by the assessee corporation to the aforesaid payment, the claim of the revenue that the assessee corporation is proved to be the owner of the land cannot be accepted. 21. We....
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....ensed with the requirement of filing an application under Rule 29 of the Appellate Tribunal Rules, 1963 for admission of the said affidavit, therefore, we are constrained to decline to consider the same. Be that as it may, we are of the considered view that not only the aspect as regards publishing of a notification contemplated in Sec. 32(7) r.w Sec. 43-1A of the MIDC Act could be successfully established or dislodged by the parties before us in support of their respective claims raised to the contrary, but even otherwise, to our understanding the adjudication of the issue under consideration i.e as to whether there was a transfer of the ownership of the lands acquired by/vested with the State Government to the assessee corporation by placing the same at its disposal for the furtherance of the objects of the MIDC Act, has to gathered on a perusal of the scheme of the said Act. 22. We have further deliberated on the contention of the ld. D.R that as Sec. 39(1)(a) of the MIDC Act empowers the assessee to dispose off the land transferred to it without development, hence it could safely be concluded that the assessee was the owner of the said land. We are unable to persuade ourselves....
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....nt to acquisition of the same from a private party was vested with the State Government of Maharashtra as the owner of the same. In this regard it would be relevant to refer to Para VIII of the said document, which reads as under: " VIII. As full compensation is now being paid in respect of these lands, rights should be extinguished and the lands should be shown in the name of the State Government in Industries and Labour Department, if not already done. Action should also be taken for reduction of land revenue on said lands." On a careful perusal of the aforesaid notings, we are of the considered view that not only the claim of the revenue that the land under consideration had been acquired on behalf of the assessee corporation as an owner fails, but rather the claim of the assessee corporation that the land acquired was owned by the State Government and only possession of the same was delivered to it for the purpose of furtherance of the objects of the MIDC Act, stands further substantiated. 24. The ld. D.R by referring to the Government of Maharashtra, Resolution No. IDC 1067/38498-IND I; dated 16.08.1967 (Page 860-861 of 'APB') in support of his contention that the State Go....
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....e objects of the MIDC Act. 25. We shall now advert to the government regulations viz. (i) Government Regulation No. IDC/067/38498; dated 16.08.1967; and (ii). Government Regulation No. IDC/1079(1966)/-IND-14; dated 11.09.1986 as had been relied upon by the ld. A.R to drive home his contention that the assessee which was only handed over the possession of the land could not be regarded as the owner of the same. We find that Government Regulation No. IDC/067/38498; dated 16.08.1967 (Page 860-863 of 'APB') and Government Regulation No. IDC/1079(1966)/-IND-14; dated 11.09.1986 (Page 869-877 of 'APB') both provides that as the assessee is only put into possession of the land for development of industrial areas and for similar other purposes under the MIDC Act, hence merely on the said count it could not be held as the owner of the same. We find that the ld. D.R had objected to the reliance placed by the assessee on the aforesaid government regulations for the reason that the Tribunal in the first round of appeal had concluded that the regulations cannot override the MIDC Act. We are unable to find ourselves as being in agreement with the said objection of the revenue. We find that the ....
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....t the lessees of the assessee corporation viz. MIDC were government lessees as they were exempted from paying the non-agricultural assessment. We have perused the aforesaid judgment and find that in the case before the Hon'ble Apex Court the appellant viz. Tata Motors Ltd. had taken on lease land measuring 164.5 acres in Sectors No. 15 and 15-A in Village Chikhali, Taluka: Haveli, District: Pune for a term of 99 years commencing from 21.11.1994 from Pimpri-Chinchwad New Town Development Authority (for short "the Development authority"), which was converted to industrial use. Still further, the assessee had also taken an adjoining plot on lease from the assessee corporation viz. MIDC for construction of its factory. The appellant was served with a demand notice dated 26.02.2002 by the Gar Kamgar Talathi, Chikhali, demanding a payment of Rs. 45,25,538/- as non-agricultural cess and additional non-agricultural cess, for the period 1995-96 to 2001-02. On an appeal assailing the liability to pay the aforesaid amount, it was observed by the Hon'ble Apex court that a government lessee was not liable to pay any land revenue. In the backdrop of the aforesaid observation it was held that in ....
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....law the scheme of the "New Fruit & Vegetable Market" as proposed in the resolution, subject to the remarks viz. (i). that "the whole of the land required for the construction of the market is the property of the Government", and (ii). that "the trust will administer the new market on its completion". That pursuant to litigation emerging from the action thereafter taken by the Trust for evicting the plaintiff from the market, the issue came up before the Hon'ble Supreme Court that as to whether the property in dispute belonged to the Government within the meaning of Section 3(a) of the Rent Control Act, 1952. It is in the backdrop of the aforesaid issue that the Hon'ble Apex Court deliberating on the scope and gamut of the term "vest", observed that the said term has not got a fixed connotation, meaning in all cases that the property is owned by the person or the authority in whom it vests. It may vest in title, or it may vest in possession, or it may vest in a limited sense, as indicated in the context in which it may have been used in a particular piece of legislation. On the basis of its aforesaid deliberations, the Hon'ble Apex Court referring to the provisions of the Improvemen....
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....duciary relation under trust was clearly dislodged. The ld A.R had rebutted the said contention of the revenue on the ground that Sec. 20 of the MIDC Act only empowered the assessee corporation to keep with it the funds received on sale of land, and the same could by no stretch of imagination be construed as vesting of ownership over the said sale receipts with the assessee corporation. We have carefully perused Sec. 20 of the MIDC Act and find substantial force in the contention advanced by the ld. A.R. We find that Sec. 20 of the MIDC Act only contemplates maintaining by the assessee corporation of its "Own fund" to which the receipts specified therein are to be credited. As per Clause (c) of Sec. 20(1) of the MIDC Act, all monies received by the corporation from the disposal of lands, buildings and other properties movable and immovable, and other transactions is permitted to be credited. There is nothing which could persuade us to conclude that the ownership of the receipts credited by the assessee in the aforesaid fund would stand vested with the assessee corporation. Rather, on the contrary a perusal of Sec 19 of the MIDC Act reveals that all property, fund and other assets v....
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....ed that the assessee had never claimed that its case was covered under Sec. 113(3-A) of the MRTP Act. It was submitted by the ld. A.R that as the land under consideration was not acquired under the MRTP Act but under the MIDC Act, hence the provisions of the MRTP Act would not be applicable in its case. It was averred by the ld. A.R that the revenue had failed to show that the land under consideration was acquired for the purpose of MIDC Act under the MRTP Act. In the backdrop of his aforesaid submissions, it was the claim of the ld. A.R that while for the scope and ambit of the MIDC Act was in respect of acquisition and development of industrial lands, whereas the MRTP Act governed the planning and development of the identified town/area. It was submitted by the ld. A.R that the assessee corporation does not exercise jurisdiction under the MRTP Act to acquire any land that is required for development. The ld. A.R further submitted that the exercise of powers under the MRTP Act by the assessee were only to the extent of the notified towns falling under the industrial areas developed by the assessee. We have given a thoughtful consideration to the issue before us and find substantia....
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....esaid observations. 31. We shall now advert to the contention of the assessee that the A.O while giving effect to the order dated 27.03.2015 passed by the Tribunal in the first round of appeal has traversed beyond the directions given by the Tribunal and had enhanced the income of the assessee, as against that assessed in the course of the original proceedings. The ld. A.R in support of his contention that no such enhancement of income was permissible, relied on the judgment of the High Court of Mysore in the case of Pathikonda Balasubba Setty (supra) and the order of the ITAT, Mumbai in the case of Kellogg India (P) Ltd. v. ACIT (2012) 19 ITR (T) 220 (Mum). We have deliberated at length on the issue under consideration. We find from a perusal of the records that the income of the assessee corporation was originally assessed by the A.O at Rs. 1701,76,74,360/-, vide his order passed under Sec. 143(3), dated 28.02.2014. The appeal filed by the assessee was dismissed by the CIT(A) by his order dated 29.09.2014. Subsequently, on further appeal by the assessee though the order of the CIT(A) was upheld by the Tribunal, however for two issues viz. (i). considering the claim of the assess....
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...., but the exercise of the said power has to be exercised in aid of the main power and not in excess of it. We find that our aforesaid view is fortified by the judgment of the High Court of Mysore in the case of Pathikonda Balasubba Setty (supra) and the order of the ITAT, Mumbai in the case of Kellogg India (P) Ltd. (supra) We thus, in the backdrop of our aforesaid observations are of the considered view that the income of the assessee after having been set aside by the Tribunal to the file of the A.O on the aforementioned limited issues, in any case could not have been assessed at an amount in excess of that at which was originally assessed by making fresh additions which were not there in the impugned order. In terms of our aforesaid observations we direct the A.O to consider our aforesaid observations while giving appeal effect to our order passed while disposing off the present appeal. The Ground of appeal No. 12 is allowed for statistical purposes in terms of our aforesaid observations. 33. We shall now advert to the claim of the assessee that even if it was to be assumed, though not admitted, that the assessee corporation was carrying on trade or commerce, even then it would....