TaxTMI 
TaxTMI 
2025 (7) TMI 365
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....rutiny and notice u/s. 143(2) of the Income Tax Act, 1961 ("the Act") dated 29.06.2021 was issued to the assessee. After considering the submission of the assessee, the Learned Assessing Officer ("Ld. AO") completed the assessment u/s. 143(3) r.w.s. 144B of the Act on 30.09.2022 assessing the total income at Rs. 72,96,60,104/-. 3. Aggrieved with the order of Ld. AO, the assessee filed appeal before the Ld. CIT(A), who partly allowed the appeal of the assessee. Against the impugned order of Ld. CIT(A), both the assessee as well as the revenue have filed cross appeals before us. ITA No.581/Hyd/2024 (Assessee's Appeal) 4. The assessee has raised the following grounds of appeal: 1. The order of the learned Commissioner of Income-Tax (Appeals) is erroneous both on facts and in law. 2. The learned Commissioner of Income-Tax (Appeals) erred in holding that the scrutiny proceedings have taken place for scrutiny of all the issues whereas the Assessing officer mentioned clearly that the case is selected for scrutiny of 11 items only. 3. The learned Commissioner of Income-Tax (Appeals) erred 'in confirming the action of the Assessing officer in treating....
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....e case of the assessee was selected for scrutiny for limited purpose which has been captured by Ld. AO at page nos.1 & 2 of his order which is to the following effect : "Reason of selection : i) Sale consideration of property in ITR is less than sale consideration report in Form 26QB. ii) Sale of high value immovable property. iii) Ratio of expenditure on Establishment and Administration, to Expenditure on objects of the trusts is high. iv) Large capital expenditure for charitable purposes. v) Large receipts reported by trust for charitable purposes. vi) Claim of large value refund. vii) Large receipts from other income. viii) Trust executing contracts, providing professional services, earning commission incomes or rent (verification as per proviso to section 2(15) or any other section). ix) High refund claimed by Trust. x) Large amount of income accumulated or set apart by Trust. xi) Large claim of depreciation for Trust - Whether asset itself has been claimed as application of income." 7.1 The Ld. AR further submitted that, the Ld. AO had made certain additions on accoun....
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....t, as the assessee had no liberty to expend 85% of the receipts, the same cannot be treated as revenue receipts in the hands of the assessee. In support of their claim, the assessee relied on the decision of Hon'ble Bombay High Court in the case of City and Industrial Development Corporation of Maharashtra Limited Vs. ACIT (2023) 157 taxmann.com 603 (Bombay) and the co-ordinate bench of the Tribunal in the case of DCIT Vs. Andhra Pradesh Capital Region Development Authority in ITA nos.26 to 29/Viz/2023 dated 21.04.2023. Accordingly, the Ld. AR prayed before the bench to delete the addition made by the Ld. AO on account of development charges. 8.2 Per contra, the Ld. DR invited our attention to para no.3 of G.O. no.439 (supra) and submitted that, there was no restriction from the state government that the assessee cannot use the 85% of the collection on account of development charges. The only restriction imposed by the said G.O. no.439 (supra) was that, the assessee shall utilise 85% of the receipts to implement the provisions of master plan viz. a) traffic improvement (b) construction of bridges (c) development of green belts and parks, etc. ("specified objects") . Therefor....
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....remaining 15% can be utilised for administration and other maintenance. In the said G.O., there is no restriction that the assessee cannot utilise 85% of the development charges or the assessee has no liberty over 85% of development charges. The restriction has been made for utilisation of 85% for some specified objects i.e. a) traffic improvement (b) construction of projects. (c) development of green belt and parks, etc. We have also gone through page no.23 of the paper book which is to the following effect: HYDERABAD METROPILITAN DEVELOPMENT AUTHORITY Computation of Income Assessment Year 2020-21 Assessee's version Rupees Income :- Revenue Receipts Advertisement & Hoardings 38,76,809 Income from Parks 20,96,64,229 Interest 57,66,70,227 Rental Income 12,33,26,012 Prior Period income 14,20,452 Other Receipts 62,24,669 Development Charges 5,21,67,82,555 92,11,82,398 ....
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....aharashtra Ltd. Vs. ACIT (supra), wherein at para no.10 of its order, the Court has held as under : "10. The ITAT in its order dated 8th August 2012 for A.Y. 2006-2007 while considering the issue whether petitioner should be held to be "an agent" of the State or an "arm" of the State, working solely under the authority and guidelines issued through various notifications by the State, i.e. the Government of Maharashtra has come to a finding that the resolutions taking back to 1970 make it clear that petitioner is an agent and functions as an arm of the State Government because petitioner can only work under the control and supervision of the State Government meaning thereby petitioner cannot make / take any decisions suo motu." 8.7 On perusal of above, we found that the decision of Hon'ble Court has been given under different set of facts, where the assessee is an agent and functions as an arm of the state government. However, the facts in the present case are different. Hence, the decision of Hon'ble Court(supra) is not applicable to the issue before us. 8.8 We have also gone through the decision of co-ordinate bench of Tribunal in the case of DCIT Vs. Andhra....
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....ear actually incurred the expenditure which was more than the Sinking Fund created during the year. It is normal accounting practice under the Accrual System of Accounting any future expenditure needs to be provided in the books of accounts in the relevant assessment year. It is not necessary that deduction shall be permissible only in case of amounts actually expended or paid. Further, it is also noticed that the assessee is supposed to expend 85% of the amount to developmental activities as approved by the Government of Andhra Pradesh in accordance with the Master Plan revised. It can be concluded that the assessee as formed under the Andhra Pradesh Urban Areas (Development) Act is bound by the directions of the Government in the collection and execution of development charges. It is also found that the assessee after getting necessary approvals and permissions from the Government of Andhra Pradesh has to expend 85% of the Development Charges collected by them to implement the provisions of the Master Plan. In view of the above discussions, we are of the considered view that the assessee being a non-profit oriented organization established for the purpose of implementing the prov....
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....rities have rejected the claim of the assessee primarily on the ground that the income against which TDS was deducted i.e. the sale of land, was not offered as income by the assessee. It was also held by the revenue authorities that, when the corresponding receipts are not recognised as income in the hands of the assessee, the claim of TDS as application of income cannot be allowed. The Ld. AR contended that, in such cases the amount not available with the assessee should be considered as applied for the purpose of section 11 of the Act. Accordingly, the Ld. AR prayed before the bench to allow the amount of TDS as application of income. 9.2 Per contra, the Ld. DR submitted that the TDS was primarily deducted on the sale of land. The assessee is only an agent of state government as far as the receipt of sale proceeds of land is concerned, and as such the assessee has not offered the same as its income. Therefore, no deduction of TDS should be allowed as application of income on such amount. 9.3 In rejoinder, the Ld. AR invited our attention to the details of TDS placed at page nos.24 & 25 of the paper book and submitted that the TDS in question is not entirely related to sale ....
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....ssessee by observing that the amount has already been utilized for the object in earlier year and hence could not be treated as application of income in the year of repayment. During the appellate proceedings before the Ld. CIT(A), the Ld. CIT(A) affirmed the action of the Ld. AO on the ground that the application of loan amount would have already been claimed in the year of actual utilization. The Ld. AR contended that, in fact, the assessee had not claimed the same as application of income in the year of utilization. Accordingly, the Ld. AR prayed before the bench to allow their claim. 10.2 Per contra, the Ld. DR relied upon the orders of revenue authorities and submitted that, the claim of the assessee is liable to be rejected. 10.3 We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. It has been submitted by the Ld. AR that, the assessee had availed loan from HUDCO for construction of express highway, the proceeds of which were utilized towards the object of the assessee. It has been specifically contended by the Ld. AR that in the year of utilization of loan amount, the assessee had not claimed the same....
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....venue authorities and prayed before the bench to uphold the same. 11.2 We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. We have gone through Explanation 5 to section 11(1) of the Act, which has been inserted by Finance Act, 2021 w.e.f. A.Y. 2022-23 wherein the statute has restricted the set off of b/f deficit against the income of current year. We are of the considered opinion that, the restriction imposed by Explanation 5 to section 11(1) of the Act is prospective and applicable only from A.Y. 2022-23 onwards. We are also of the opinion that, the law prior to insertion of Explanation 5 to section 11(1) clearly permitted the charitable institution to set off b/f deficit of earlier year against the income of current year. Therefore, for the year under consideration, we hold that the Ld. AO has erred in denying the claim of the assessee on account of set off of b/f deficit against the income of the current year. However, we are of the considered view that, the set off of b/f deficit claimed by the assessee needs to be verified with the record of the assessee to ensure correctness and arithmetical accuracy. Ac....
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....Assessment Order that the assessee has not offered the income to tax in the ITR on which the GST was paid by the assessee. 5. Any other ground that may be urged at the time of hearing." 15. The solitary issue raised by revenue against the order of Ld. CIT(A) is, deleting the disallowance made by the Ld. AO on account of GST & Service Tax ("GST/ST") claimed as deduction by the assessee. 15.1 In this regard, the Ld. DR submitted that the assessee has paid GST/ST in respect of receipts arising from sale of land and collection of development charges. However, the assessee has not offered the corresponding receipts as income in its books of account. Therefore, it was contended that if the underline revenue has not been offered to tax, then the GST/ST paid in relation to such receipts cannot be allowed as an application for deduction. 15.2 Per contra, the Ld. AR invited our attention to Schedule III of GST Act placed at page no.128 of the paper book and submitted that, as per item no.5 of Schedule III, no GST is leviable on the sale of land. Further, it was contended that the assessee has not offered the sale proceeds of land as income, as the assessee has acted merely ....
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.... HYDFOBASED Fore-Sors 194C 1.14.524 SBNO001810 Orissa State Co-Operative Handicrafts Corporation Limited 194C 1.032 LKNSOS719A Smal Industries Development Bank Of india (Sidbi), Head Office 194C 876 HYD503940F Society For Elimination Of Rural Poverty 1940 1.153 MUMS86153E Stane Bank Of india 194C 2.393 HYDTOSOSGA Telangana Stale Tourism Development Corporation Linwind 194C 3.300 HYDU01367C Uida: Regional Office 194C 7.764 Document 2 4.220 Lig Housing Finance LIG Anoon Kop Logstos Pan Poezie Listed 17 400 1,52.415 1367C Ua, Rlegend Ofice 2.53.564 Aiun Ceunos R & D Co Ltd 62.335 DAIERIIE Andia iré'a Projectu & bulasiries Private Limited 7 58.332 Arion Healt Care Services 3.17,589 YDA10112G 4.40.465 B-Che Consulting Privace Limites 45.323 DELC1137SA Cas E-Governance Services Ida Limited 83.766 Cupel 42,327 YD001406G Director Of Fartaies 1,15.371 anal Mataing Office Secunderabad Tubersad Taca DI Lai Patiabe Living 1.71.827 Durgmat Inda Private Lindiel 3.06.519 Employment Gerwation And Madetng Mission 4.83.217 Entersot & Soulons Late Private Living 99.571 Honda Tock Dac....
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....on in that capacity: (ex the duties performed by any person as a Chairperson or a Member or a Director in a body established by the Central Government or a State Goverment or local authority and who is not deemed as an employee before the commencement of this clause. : Services of funetal. burial. crematorium or mortuary including transportation of the deceased. 5. Sale of land and, subject to clause (b) of paragraph 5 of Schedule IL. sale of building. h. , Actionable claims, other than "| Specified actionable claimsJ. ". "[Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering inte India. Document 4 %. (n) Supply of warehoused goods to any person before clearance for home consumption; ib) Supply of goods by the consignee to any other person, by endorsement of documents of title to the goods, after the goods have been dispatched from the port of origin located outside India but before clearance for home consumption.] 119. Activity of apportionment of co-insurance premium by the lead insurer to the co-insurer for the insurance services jointly supplied by the lend inturer and the co....