The Dy. CIT, Gandhinagar Circle, Gandhinagar V. Gujarat Water Supply and Sewerage Board, Gandhinagar

ITA 2751/AHD/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6178 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 07-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P SHARMA
• Keywords: Set aside
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 2751/AHD/2017 (ASSESSMENT YEAR: 2013-14) DY. CIT, GANDHINAGAR CIRCLE, GANDHINAGAR V/S GUJARAT WATER SUPPLY AND SEWERAGE BOARD JALSEVA BHAVAN, SECTOR-10A, GANDHINAGAR-382010 (APPELLANT) (RESPONDENT) PAN: AACCG 3119R APPELLANT BY : SHRI O.P. SHARMA, CIT/DR RESPONDENT BY : SMT. ARTI N. SHAH ( )/ ORDER DATE OF HEARING : 24-09-2019 DATE OF PRONOUNCEMENT : 09 -10-2019 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE LD. CIT(A), GANDHINAGAR, AHMEDABAD DATED 18.09.2017 PER TAINING TO A.Y. 2013- 14 AND FOLLOWING GROUNDS HAVE BEEN TAKEN: ITA NO. 2751 /AHD/2017 . A.Y. 2013-14 2 1. WHETHER ON THE FACTS & CIRCUMSTANCES OF THE CASE, THE LD CIT(A) WAS JUSTIFIED IN DELETING THE DETERMINED BOOK PROFIT U/ S. 115JB OF THE IT ACT OF RS.3608.62 LACS/-. 2. 'WHETHER ON THE FACTS & CIRCUMSTANCES OF TH E CASE, THE LD CIT(A) HAS JUSTIFIED IN TREATING THE ASSESSEE AS A LOCAL AUTHO RITY.' 3. 'WHETHER ON THE FACTS & CIRCUMSTANCES OF THE CASE, THE HON'BLE ITAT HAS JUSTIFIED IN HOLDING THAT THE BOARD NOT BEING A COM PANY UNDER THE COMPANIES ACT 1956 IS NOT COVERABLE U/S.115JB OF THE I.T.ACT EVEN THOUGH THE ASSESSEE BOARD WAS A BODY CORPORATE UNDER THE GWSSB ACT 1979.' 4. IT IS, THEREFORE PRAYED THAT THE ORDER OF T HE LD.COMMISSIONER OF INCOME- TAX(APPEALS) MAY BE SET ASIDE AND THAT OF THE ASSES SING OFFICER BE RESTORED. 5. THE APPELLANT PRAYS FOR LEAVE, TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. FACTS OF THE CASE ARE THAT ASSESSEE COMPANY ESTABLI SHED UNDER THE GUJARAT WATER SUPPLY & SEWERAGE BOARD ACT, 1978 AND IS A GU JARAT GOVERNMENT UNDERTAKING. IN THE NOTES FORMING PART OF AUDITED BALANCE SHEET-A ND INCOME & EXPENDITURE ACCOUNT FOR THE YEAR ENDED ON 31ST MARC H, 2011, FT IS STATED THAT SECTION 42(2) OF THE GUJARAT WATER SUPPLY & SEWERAGE BOARD ACT, 19 78 (GWSSB ACT) STIPULATES THAT ASSESSEE SHALL PREPARE BALANCE SHEET IN SUCH FORM AN D MANNER AS THE REGULATION REQUIRES. FURTHER, SECTION 77 OF THE .SAID ACT STATES THAT BO ARD IS EMPOWERED TO MAKE REGULATION WITH APPROVAL BUT NO SUCH REGULATION IS SO FAR MADE. CONS IDERING THE SAME, APPELLANT HAD PREPARED ITS MANUAL FOR MAINTAINING BOOKS, OF ACCOUN T AND HAS PREPARED ITS ACCOUNTS AS PER SUCH MANUAL. THUS, IT IS EVIDENT THAT APPELLANT HAS PREPARED INCOME & EXPENDITURE ACCOUNT AND NOT PREPARED PROFIT & LOSS ACCOUNT AS PER PART :- II AND III OF SCHEDULE - VI TO THE COMPANIES ACT, 1956. FURTHER, IT IS AN UNDISPUTED FA CT THAT APPELLANT IS ESTABLISHED UNDER SECTION 3 OF THE GWSSB ACT ARID AS PER SUB-SECTION (3) OF SECTION 3, APPELLANT IS ACCORDED A STATUS OF LOCAL AUTHORITY AS DEFINED IN BOMBAY GENERA L CLAUSE ACT, 1904 AND IT IS NOT- FLOATED/REGISTERED AS PER PROVISIONS OF COMPANIES AC T 1956, FURTHER, APPELLANT IS NOT HAVING SHARE CAPITAL IN THE ANNUAL ACCOUNTS BUT IS HAVING A CORPUS AND ALL THE ACTIVITIES OF THE ITA NO. 2751 /AHD/2017 . A.Y. 2013-14 3 BOARD ARE UNDERTAKEN/MAINTAINED FROM GRANTS RECEIVE D FROM CENTRAL GOVERNMENT, STATE GOVERNMENT NATIONAL AND INTER NATIONAL AGENCIES, ETC., WHICH FURTHER PROVES THAT APPELLANT IS NOT A COMPAN Y REGISTERED UNDER THE COMPANIES ACT, 1956 AND MADE AN ADDITION OF RS. 360 8.62 LACS. 3. AGAINST THE SAID ORDER, ASSESSEE PREFERRED FIRST ST ATUTORY APPEAL BEFORE THE LD. CIT(A) WHO ALLOWED THE APPEAL OF THE ASSESSEE. 4. NOW REVENUE HAS COME BEFORE US. 5. NOW QUESTION IS BEFORE US IS THAT WHETHER MAT IS AP PLICABLE TO THE ASSESSEE AND WHETHER ASSESSEE IS SUPPOSED TO PREPARE ACCOUN T AS PER SCHEDULE-VI OF COMPANIES ACT. 6. SIMILAR MATTER CAME BEFORE THE CO-ORDINATE BENCH IN ASSESSEES OWN CASE FOR A.Y. 2010-11 IN ITA NO. 51/AHD/2014 WHEREIN ON SIMI LAR FACTS AND CIRCUMSTANCES APPEAL OF THE REVENUE WAS DISMISSED W ITH THE FOLLOWING OBSERVATION: 8, AFTER CONSIDERATION OF ENTIRE FACTS AND DETAILS AND DECISION DISCUSSED HEREINABOVE, IT IS FOUND THAT APPELLANT IN GUJARAT GOVERNMENT UNDERTAKING ESTABLISHMENT UNDER GWSSB ACT, 1978 OF THE LO CAL AUTHORITY AND NOT A COMPANY AS PER PROVISION OF COMPANIES ACT, 1956, IT IS NOT REQUIRED TO. FILE ITS ARTICLE & MEMORANDUM OF ASSOCIATION WITH ROC AND AL SO NOT REQUIRED TO PREPARE ITS ACCOUNTS AS PER SCHEDULE-VI OF THE COMPANIES AC T, THE APPELLANT HAS PREPARED ITS ACCOUNTS INCLUDING INCOME & EXPENDITURE ACCOUNT AS PER RELEVANT SECTION OF GWSSB ACT. EVEN THOUGH IT HAS FILED RETURNS IN 1TR- 6 APPLICABLE TO COMPANY AS IT IS LIABLE TO TAX AS SUCH UNDER NORMAL PROVISIONS OF THE ACT, BUT DEEMING-PROVISIONS OF SECTION 115JB WHICH PROVIDES FOR SPECIAL TAXATIO N ARE NOT APPLICABLE TO THE PRESENT CASE, AS DISCUSSED HEREINABOVE. ITA NO. 2751 /AHD/2017 . A.Y. 2013-14 4 9. LD. AR HAS FILED AN ORDER OF THE CO-ORDINATING B ENCH IN ITA NO.2L59/AHD/2006, IN THE MATTER OF ITO VS. GUJARAT STATE ROAD TRANSPO RT CORPORATION LTD. IN SIMILAR MATTER APPEAL WAS ALLOWED BY THE HON'BLE MEMBERS HO LDING THAT IN THESE SIMILAR MATTERS HON'BLE KARNATKA HIGH COURT IN THE CASE KER ALA STATE ELECTRICITY BOARD VS. DCIT [2010] 329 ITR 91 (KER), IN VIEW OF THE DECISI ON, CASE WAS DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 10. IN SUPPORT OF ITS CONTENTION ASSESSEE HAS A LSO FILED A COPY OF 'JUDGMENT DAMODAR VALLEY CORPORATION VS. ACIT [2016] 157 ITD 415/66 TAXMANN,COM25(KOLKATA - TRIB) IN SIMILAR CIRCUMSTAN CES, THE CASE WAS ALLOWED IN FAVOUR OF THE ASSESSEE. 11. IT WAS HOLD THAT THE ASSESSEE IS A STATUTORY CO RPORATION NOT. REGISTERED UNDER THE COMPANIES ACT SECTION 115JB OF THE ACT ARE- NOT APPLICABLE TO THE ASSESSEE CORPORATION; 12. WE ARE OF THE CONSIDERED OPINION AND RESPECTFUL LY FOLLOWING THE ORDER OF THE HON'BLE TRIBUNAL AND JUDGMENT OF KERALA HIGH COURT. WE DISMISSED THE APPEAL OF THE DEPARTMENT. 7. IN PARITY WITH THE CO-ORDINATE BENCH ORDER, WE DISM ISSED THE APPEAL OF THE REVENUE. 8. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN OPEN COURT ON 09- 10- 2019 SD/- SD/- (PRADIP KUMAR KEDIA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 09 /10/2019