M/s. Ghaziabad Development Authority, New Delhi V. ACIT (Excemption), Ghaziabad

ITA 2037/DEL/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9447 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 06-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: INDER PAL SINGH BINDRA
• Assessee Lawyers: DR RAKESH GUPTA
• Keywords: Benefit of exemption; Set aside
• Section: 12A; 12AA; 263; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C: NEW DELHI BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI A.N.MISSHRA, ACCOUNTANT MEMBER ITA NO.2037/DEL/2017 (ASSESSMENT YEAR-2009-10) M/S GHAZIABAD DEVELOPMENT AUTHORITY, VIKAS PATH, HAPUR ROAD, GHAZIABAD. PAN AAALG 0072C VS. ACIT- (EXEMPTION), GHAZIABAD. (APPELLANT) (RESPONDENT) APPELLANT BY DR. RAKESH GUPTA, ADV. RESPONDENT BY SH. INDER PAL SINGH BINDRA, CIT-DR DATE OF HEARING 02.01.2020 DATE OF PRONOUNCEMENT 08.01.2020 ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER: THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST THE ORDER DATED 28.02.2017 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-GHAZIABAD {CIT(A)} FOR ASSESSMENT YEAR 20 09-10. 2.0 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN AUTHORITY CONSTITUTED UNDER THE UTTAR PRADESH URBAN PLANNING AND DEVELOPMENT ACT, 1973 TO PROMOTE AND SECURE THE DEVELOPMENT OF AREAS ACCORDING TO ITA NO.2037/DEL/2017 (ASST. YEAR: 2009-10) PAGE | 2 PLAN AND FOR THAT PURPOSE, THE AUTHORITY HAS BEEN E MPOWERED TO ACQUIRE, HOLD, MANAGE AND DISPOSE LAND AND OTHER PROPERTIES TO CARRY OUT BUILDING ACTIVITIES, ENGINEERING, MINING AND OTHER OPERATION S, TO EXECUTE WORKS IN CONNECTION WITH THE SUPPLY OF ELECTRICITY AND WATER , TO DISPOSE OF SEWAGE AND TO PROVIDE AND MAINTAIN OTHER SERVICES AND AMEN ITIES AND GENERALLY TO DO ANYTHING NECESSARY OR EXPEDIENT FOR THE PURPOSE OF SUCH DEVELOPMENT. THE ASSESSEE WAS ENJOYING EXEMPTION U/S 10(20A) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT) TILL 01.04.2 003 AND, SUBSEQUENTLY, THE ASSESSEE WAS GRANTED REGISTRATION U/S 12A OF THE AC T VIDE ORDER DATED 29.09.2010 W.E.F 31.03.2003. THE RETURN OF INCOME F OR THE YEAR UNDER CONSIDERATION WAS FILED DECLARING NIL INCOME AFTE R CLAIMING BENEFIT OF EXEMPTION U/S 12AA OF THE ACT. THE ASSESSMENT U/S 1 43(3) OF THE ACT WAS COMPLETED AT A LOSS OF RS.1,33,17,11310/- BY DISALL OWING THE ASSESSEES CLAIM U/S 12AA. SUBSEQUENTLY, THE ORDER OF ASSESSME NT WAS SUBJECTED TO REVISION U/S 263 OF THE ACT WHEREIN THE LEARNED CIT , GHAZIABAD SET ASIDE THE ASSESSMENT ORDER AND DIRECTED THE ASSESSING OFF ICER TO RE-COMPUTE THE INCOME OF THE ASSESSEE AFTER CONSIDERING THE ACCRUE D INTEREST ON LOAN ADVANCED BY THE ASSESSEE TO HAPUR PILKHUWA DEVELOPM ENT AUTHORITY. THIS ORDER U/S 263 WAS PASSED ON 31.03.2014 AND SUBSEQUE NT TO THE ITA NO.2037/DEL/2017 (ASST. YEAR: 2009-10) PAGE | 3 DIRECTIONS OF THE LEARNED CIT, THE ASSESSMENT WAS R EVISED TO A LOSS OF 1,27,17,11,310/- AFTER MAKING AN ADDITION OF RS. 6. 0 CRORE ON ACCOUNT OF INTEREST INCOME. THE LEARNED CIT (APPEALS), ON APPE AL, ALLOWED MARGINAL RELIEF TO THE ASSESSEE BY DIRECTING THAT THE INTERE ST BE COMPUTED @ 9% INSTEAD OF 12% AS APPLIED BY THE ASSESSING OFFICER. 2.1 AGGRIEVED BY THIS ORDER OF THE LEARNED CIT ( APPEALS), THE ASSESSEE IS NOW BEFORE THIS TRIBUNAL AND HAS RAISED THE FOLLOWI NG GROUNDS OF APPEAL: 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMST ANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. AO IN NOT ALLOWING THE BENEFIT OF EXEMPTION U/S 11 AND 12 AS CLAIMED BY THE ASSESSEE AND FURTHER ERRED IN OBSERVING AS UNDER: - THAT THE ASSESSEE AUTHORITY IS COVERED UNDER THE PR OVISO TO SECTION 2(15) THAT THE ACTIVITIES OF THE ASSESSEE AUTHORITY ARE COMMERCIAL IN NATURE AND ARE WHOLLY OR PARTIALLY CA RRIED ON WITH A MOTIVE OF PROFIT. THAT THE ASSESSEE WAS ENGAGED DOMINANTLY IN THE ACTIVITY OF DEVELOPMENT AND SALE OF PROPERTIES. 2. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, AC TION OF LD. CIT(A) IN CONFIRMING THE ACTION OF LD. AO IN DENYING THE BENE FIT OF EXEMPTION U/S 11&12, IS BAD IN LAW AND AGAINST THE FACTS AND CIRC UMSTANCES OF THE CASE AND WITHOUT OBSERVING THE PRINCIPLES OF NATURAL JUS TICE. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT DELETIN G THE ADDITION OF RS.6,00,00,000/- FULLY AS MADE BY LD. AO ON ACCOUNT OF INTEREST RECEIVED FROM HPDA AND FURTHER ERRED IN SUSTAINING THE SAME TO THE EXTENT OF RS.4,50,00,000/- (I.E. 9% OF RS.50,00,00,000/-) 4. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACT ION OF LD. CIT(A) IN SUSTAINING THE ADDITION TO THE EXTENT OF RS.4,50,00 ,000/- (9% OF RS.50,00,00,000/-) ON ACCOUNT OF INTEREST ON LOAN O F RS. 50,00,00,000/- ITA NO.2037/DEL/2017 (ASST. YEAR: 2009-10) PAGE | 4 GIVEN TO HPDA, IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD. CIT(A) IN CONFIRM ING THE ACTION OF LD. AO IN NOT ALLOWING THE EXEMPTION U/S 11&12 ON THE AMOUNT OF ADDITION MADE IN THE ASSESSMENT ORDER. 6. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD. CIT(A) IN CONFIRM ING THE ACTION OF LD. AO IN NOT TREATING THE ALLEGED INCOME ELIGIBLE FOR APPLIC ATION, MORE SO WHEN THE SAME AMOUNT HAVING BEEN APPLIED FOR CHARITABLE PURP OSE. 7. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT GRANTING THE BENEFIT OF EXPENSE S AND IN NOT COMPUTING THE INCOME AS PER GENERALLY ACCEPTED COMMERCIAL ACC OUNTING PRINCIPLES AFTER REJECTING THE CLAIM OF REGISTRATION U/S 12AA 8. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MODIFY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 3.0 AT THE OUTSET, THE LEARNED AUTHORIZED REPRESENTA TIVE (AR) SUBMITTED THAT THE ASSESSEE HAD APPROACHED THE ITAT AGAINST THE ORDER PASSED U/S 263 OF THE ACT AND THE ITAT HAS SINCE, V IDE ORDER DATED 10.06.2019 IN ITA NO. 2399/DEL/2014, QUASHED THE PR OCEEDINGS U/S 263. A COPY OF THE SAID ORDER OF THE TRIBUNAL WAS FILED BEFORE THE BENCH. IT WAS SUBMITTED THAT IN VIEW OF THE REVISIONARY ORDER PAS SED U/S 263 OF THE ACT BEING QUASHED BY THE ITAT, THE CONSEQUENTIAL ASSESS MENT DOES NOT SURVIVE AND THE SAME IS ALSO LIABLE TO BE NULLIFIED . ITA NO.2037/DEL/2017 (ASST. YEAR: 2009-10) PAGE | 5 4.0 THE LEARNED CIT-DR FAIRLY ACCEPTED THAT THE IMPUGNED ASSESSMENT DOES NOT SURVIVE IN VIEW OF THE QUASHING OF THE ORD ER PASSED U/S 263 OF THE ACT. 5.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALSO PERUSED THE MATERIAL ON RECORD. WE AGREE WITH THE CONTENTION OF THE LEARNED AUTHORIZED REPRESENTATIVE (AR) THAT THE ORDER PASSED U/S 263 O F THE ACT HAS SINCE BEEN QUASHED BY THE CO-ORDINATE BENCH OF THIS TRIBU NAL IN ITA NO. 2399/DEL/2014, WHEREIN THE TRIBUNAL HAS QUASHED THE 263 ORDER VIDE ORDER DATED 10.06.2019. THIS PRESENT APPEAL IS AGAI NST THE CONSEQUENTIAL ASSESSMENT ORDER PASSED AFTER THE 263 PROCEEDINGS A ND, THEREFORE, WHEN THE VERY FOUNDATION OF THE REVISION HAS BEEN DEMOLI SHED BY THE ORDER OF THE TRIBUNAL, THE CONSEQUENTIAL ASSESSMENT PROCEEDI NGS ALSO DO NOT STAND. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO DEL ETE THE IMPUGNED ADDITION. 6.0 IN THE FINAL RESULT, THE APPEAL OF THE ASSESSEE S TANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/01/2020 . SD/- SD/- (A.N.MISSHRA) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 08/01/2020 PK/PS ITA NO.2037/DEL/2017 (ASST. YEAR: 2009-10) PAGE | 6 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI