GUJARAT INDUSTRIAL DEVELOPMENTCORPORATION (ACCOUNTS DEPTT.) V. COMMISSIONER OF INCOME-TAX

ITR/246/1991

AI Insights

The case involves the Gujarat Industrial Development Corporation (GIDC) contesting the applicability of income tax on its income for the assessment year 1983-84. The primary legal questions referred to the High Court were whether the GIDC's income was exempt under Article 289 of the Constitution and whether it was exempt under Section 10(20A) of the Income-tax Act, 1961. The Supreme Court had previously ruled on a related matter, which influenced the High Court's decision. The GIDC did not press the first question as it had been previously addressed in their favor by the Supreme Court. The focus was on the second question, where the court ruled in favor of the GIDC, granting it exemption from income tax.

• Counselvise Citation: [2001] 140 COUNSELVISE.COM (IT) 693329 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 16-10-2001
• Assessment Year: misc
• Other Referred Cases: (1997) 227 ITR 414
• Laws Referred To: Constitution of India, 1950, Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: MIHIR JOSHI; MANISH BHATT
• Assessee Lawyers: R K PATEL
• Keywords: Development authority; Exemption; Income Tax; Public Purpose
• Section: 10(20A); 289

Judgement Text

" IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No 246 of 1991 For Approval and Signature: Hon'ble MR.JUSTICE M.S.SHAH and Hon'ble MR.JUSTICE D.A.MEHTA ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements? 2. To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? : NO -------------------------------------------------------------- GUJARAT INDUSTRIAL DEVELOPMENTCORPORATION (ACCOUNTS DEPTT.) Versus COMMISSIONER OF INCOME-TAX -------------------------------------------------------------- Appearance: 1. INCOME TAX REFERENCE No. 246 of 1991 MR RK PATEL for Petitioner MR MIHIR H JOSHI WITH MR MANISH R BHATT for Respondent -------------------------------------------------------------- CORAM : MR.JUSTICE M.S.SHAH and MR.JUSTICE D.A.MEHTA Date of decision: 16/10/2001 ORAL JUDGEMENT (Per : MR.JUSTICE M.S.SHAH) In this reference at the instance of the assessee, the following questions have been referred for the opinion of this Court in respect of assessment year 1983-84 :- \"(1) Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the appellant's income was not exempt under Article 289 of the Constitution of India as claimed for ? (2) Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in not exempting the appellant's income u/s. 10(20A) of the Act ?\" 2. We have heard Mr RK Patel, learned counsel for the applicant-assessee and Mr Mihir H Joshi, learned counsel for the revenue. 3. As far as question No. 1 is concerned, the learned counsel for the assessee states that the assessee does not press this question just as was not pressed before the Apex Court when the assessee had to go to the Apex court in the case which is reported in [(1997) 227 ITR 414)]. The learned counsel for the assessee points out that the aforesaid question is not required to be pressed as the Apex court has already held in favour of the assessee, on the other question about exemption available to the assessee under Section 10(2)A) of the Income-tax Act, 1961. 4. Coming to question No. 2, the learned counsel invited our attention to the decision of the Apex Court in the case of this very assessee in (1997) 227 ITR 414 wherein the Apex Court has held that the authorities constituted by law for facilitating all kinds of development of cities, towns and villages for public purposes should not be subjected to the liability to pay income-tax and that, therefore, the assessee was entitled to exemption from tax under Section 10(20A) of the Act. 5. Following the aforesaid decision, our answer to question No. 2 is in the negative i.e. in favour of the assessee and against the revenue. 6. The reference accordingly stands disposed of with no order as to costs. (M.S. Shah, J.) (D.A. Mehta, J.) sundar/- "