TaxTMI 
TaxTMI 
2020 (11) TMI 483
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.... The subject matter of the appeal pertains to the Assessment year 2009-10. The appeal was admitted by a Bench of this Court vide order dated 9-8-2017 on the following substantial question of law: "Whether, on the facts of the case, the Tribunal is right in law in holding that the proviso to Section 2(15) of the Income-tax Act, 1961 is not applicable to assessee?" 3. The facts leading to filing of this appeal briefly stated are that the assessee, namely, Karnataka Industrial Area Development Board is a statutory body constituted under section 5 of the Karnataka Industrial Area Development Act, 1966 (hereinafter referred to as 'the KIAD Act' for short). The assessee filed the returns of the income on 24-2-2010 for the asse....
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....e revenue submitted that the Assessing Authority by detailed order had inter alia found that the assessee was systematically involved in the commercial activities by buying and selling of plots for industrial purpose, more over most of which was done through open auctions. It was also argued that the assessee has earned profit more than 18 crores from sale of land, which is significantly more than the prescribed limit of Rs. 10 lakhs and therefore, the same is hit by Proviso to section 2(15) of the Act. It is also argued that the Assessing Officer has rightly held that the net profit of the assessee was Rs. 155,76,64,004/-, which works out to 80% of the turn over and which is more than even a private builder or developer could earn. It was ....
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....passing the impugned order, the Tribunal has misinterpreted the ratio of the decision rendered by the Hon'ble High Court of Delhi in the aforesaid decision and has not met with the findings recorded by the Assessing Officer and therefore, the matter in any case deserves to be remitted for consideration afresh before the Income-tax Appellate Tribunal. In support of the submissions, learned counsel for the revenue has placed reliance on the decisions of the Hon'ble Apex Court in the cases of Aditanar Educational Institution v. Addl. CIT [1997] 90 Taxman 528/224 ITR 310 and Indian Chamber of Commerce v. CIT [1975] 101 ITR 796. 6. On the other hand, learned counsel for the assessee, at the outset submitted that no substantial questio....
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....ed by the decisions of the various High Courts. In this connection, learned counsel for the assessee has invited our attention to the following decisions rendered by the different High Courts: (a) CIT v. Gujarat Industrial Development Corpn. [2017] 83 taxmann.com 366 (Guj.); (b) Greater Noida Industrial Development Authority v. Union of India [2018] 91 taxmann.com 352/254 Taxman 289/406 ITR 418 (Delhi); (c) CIT v. Lucknow Development Authority, Gomti Nagar' [2013] 38 taxmann.com 246/219 Taxman 162 (All.); (d) CIT v. Jodhpur Development Authority [2017] 79 taxmann.com 361 (Raj.); (e) CIT (Exemption) v. Yamuna Expressway Industrial Development Authority [2017] 81 taxmann.com 208/395 ITR 18 (All....
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..... Thus, the assessee is virtually controlled by the State Government. From perusal of section 13 of the Act, it is evident that the function of the Board is to promote and assist in the rapid and orderly establishment, growth and development of Industries and to provide industrial infrastructural facilities and amenity in the industrial areas. The Board of the assessee is also under the obligation to undertake schemes or programmes jointly with the Government or local or statutory authorities or on an agency basis as it considers necessary. Section 17 of the KIAD Act empowers the State Government to issue directions to the Board for carrying out the purposes of the Act which are binding on the Board. Section 18 of the Act mandates that all ....
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....een held that the State Government acquires the land for the scheme of the assessee and hand over the same to the assessee after the acquisition for the development of the industrial area. The Tribunal has further held that the profit making is not the driving force or objective of the assessee. The Tribunal has therefore, recorded the conclusion that the assessee is engaged in the charitable activity through advancement of an object of general public utility and therefore, has concluded that the Proviso to section 2(15) of the Act is not applicable to the case of the assessee and has further held that the assessee is entitled to benefit of Section 11 of the Act. It has also been noticed that the Assessing officer has not disputed that the ....