Gujarat Maritime Board, Gandhinagar V. The Addl.CIT., GNR Range, Gandhinagar

ITA 2933/AHD/2009

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1770 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 03-02-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 28-10-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS VIBHA BHALLA
• Keywords: Business income; Depreciation; Charitable institution; Retrospective amendment; Question of law; Capital receipt; Revised return; Revenue expenditure; Capital expenditure
• Section: 43B; 143(3); 142(1); 12A; 12AA; 148; 37; 63; 12

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO. 2933/AHD/2009 / ASSESSMENT YEAR: 2003-04 GUJARAT MARITIME BOARD, GMB BHAVAN, SECTOR 10A, OPP. AIR FORCE STATION, GANDHINGAR-382010 PAN : AABCG 6676 L VS. ACIT, GANDHINAGAR RANGE, GANDHINAGAR [ / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI S.N. SOPARKAR WITH SHRI H.P.SINGH REVENUE BY : MRS. VIBHA BHALLA, CIT-DR !'# / DATE OF HEARING : 03/02/2016 / DATE OF PRONOUNCEMENT: 27/04/2016 / O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER: THIS APPEAL IS DIRECTED AT THE INSTANCE OF THE AS SESSEE AGAINST THE ORDER OF THE LD. COMMISSIONER INCOME-TAX (APPEALS), GANDHINA GAR VIDE APPEAL NO.CIT(A)GNR/291/008-09, ORDER DATED 18.08.2009 PA SSED FOR ASSESSMENT YEAR 2003-04. ASSESSMENT U/S 143(3) OF THE INCOME- TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2003- 04 WAS FRAMED ON 28.12.2007 BY ACIT, GANDHINAGAR RANGE, GANDHINAGAR. 2. THIS APPEAL WAS FILED ON 28.10.2009 RAISING FIVE GROUNDS OF APPEAL AND THEREAFTER THE ASSESSEE HAS FILED AN ADDITIONAL GRO UND OF APPEAL NO.6 ON 02.01.2012. THEREAFTER ON 13.03.2012, THE ASSESSEE HAS SUBMITTED THE MODIFIED GROUNDS OF APPEAL AND FINALLY MODIFIED GROUNDS OF A PPEAL WERE AGAIN FILED ON 08.04.2015. WHILE ADJUDICATING THIS APPEAL, WE WIL L DEAL WITH MODIFIED GROUNDS OF APPEAL FILED BY THE ASSESSEE ON 08.04.2015, WHIC H READ AS UNDER:- ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 2 1. THE LD. CIT(A) HAS ERRED IN FRAMING ASSESSMENT AT AN INCOME OF RS.64,80,62,360/- BY CLUBBING INCOME UNDER TWO PROV ISIONS. HE HAS ERRED IN FRAMING THE ASSESSMENT UNDER SECTION 11(1) AND ALSO UNDER SECTION 11(4) WITHOUT APPRECIATING THE SAID INCOME IS BEING ASSESSED TWIC E OVER. THERE IS NO PROVISION UNDER THE INCOME-TAX ACT, 1961 TO HAVE SUCH DOUBLE ASSESSMENTS OF THE SAME INCOME. 2.0 ASSESSMENT UNDER SECTION 11(1). 2.1 THE LD. CIT(A) HAS ERRED IN LAW AND ON FA CTS IN CONFIRMING DISALLOWANCE OF RS.44,38,23,000/- CLAIMED BY THE APPELLANT AS CH ARGES ON REVENUE AS APPLICATION OF INCOME BY AGREEING IN PRINCIPLE THE SAME TO BE ALLOWABLE EXPENSE U/S 37 OF THE ACT BUT FURTHER HOLDING THAT THE APPE LLANT WAS DUTY BOUND TO QUANTITY THE SAME AS PER NEWLY INTRODUCED PROVISION S OF SECTION 22A OF THE GUJARAT MARITIME BOARD ACT. LD. CIT(A) HAS ERRONEOU SLY HELD THE SAME TO BE ALLOWABLE UNDER THE PROVISION OF SECTION 43B OF THE ACT AND ONLY IN THE YEAR OF PAYMENT. 2.2 ALTERNATIVELY, LD. CIT(A) HAS ERRED IN NO T APPRECIATING THE ASSESSMENT OF THE APPELLANT, BEING A CHARITABLE INSTITUTION, IS T O BE FRAMED ON THE BASIS 'APPLICATION OF INCOME' AND HENCE SECTION 43B WOULD HAVE NO APPLICATION AT ALL. 2.3 ALTERNATELY, EVEN IF SECTION 43B IS APPLICA BLE DEDUCTION OF RS.35 CRORES PAID ON 22 ND JULY 2003 OUGHT TO HAVE BEEN ALLOWED. FURTHER AMOU NT OF RS.1.26 CRORES WAS PAID ON 11 TH JULY 2003, THE SAME ALSO OUGHT TO HAVE ALLOWED. 2.4 LD. C'IT(A) HAS ERRED IN LAW AND ON FACTS I N CONFIRMING THE ADDITION MADE BY AO OF RS. 12,92,00,000 AS NOTIONAL INCOME ON ACC OUNT OF PREMIUM OF ALANG PLOTS. BOTH THE LOWER AUTHORITIES HAVE FAILED TO AP PRECIATE THE FACT THAT THE ASSESSEE BECAME ENTITLED TO RECEIPT OF AND ACTUALLY RECEIVED, PREMIUM ON ALLOTMENT OF THE PLOTS AT THE TIME WHEN THE STATUS OF THE APPELLANT WAS OF A LOCAL AUTHORITY U/S 10(20) OF THE ACT AND HENCE THE RECEI PT WERE DULY ACCOUNTED FOR AS RESERVE/CAPITAL RECEIPT. LEARNED CIT(A) OUGHT TO HA VE QUASHED THIS ACTION OF AO OF REJECTING ACCOUNTING POLICY FOLLOWED BY THE APPE LLANT AND CONFIRMING ADDITION OF NOTIONAL INCOMES. 2.5 THE LD. CIT(A) HAS ERRED IN NOT ALLOWING DEDU CTION IN RELATION TO INCREASE IN THE FIXED ASSETS BEING APPLICATION OF INCOME AMO UNTING TO RS.20,68,73,986. 2.6 LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN N OT GRANTING DEDUCTION FOR ACCUMULATION OF INCOME U/S 11(1) OF THE ACT AT ALL. 3.0 ASSESSMENT U/S 11(4) 3.1 LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE VIEW TAKEN BY AO IN HOLDING THAT THE ACTIVITIES CARRIED OUT BY TH E APPELLANT WERE IN THE NATURE OF BUSINESS AND FURTHER PROCEEDED TO COMPUTE THE SU RPLUS ARISING OUT OF THE ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 3 ACTIVITY AS INCOME FROM BUSINESS AS PER THE MANNER PRESCRIBED U/S 11(4) OF THE ACT. BOTH THE LOWER AUTHORITIES HAVE NOT APPRECIATE D THE FACT THAT THE APPELLANT HAS BEEN GRANTED REGISTRATION U/S I2A OF THE ACT QU ALIFYING ITS INCOME EXEMPT FROM TAXATION AS TOTAL EXPENDITURE (CAPITAL AND REV ENUE) INCURRED BY THE APPELLANT IS FOR 'ADVANCEMENT OF THE OBJECT OF GENE RAL PUBLIC UTILITY.' 3.2 WITHOUT PREJUDICE TO THE CONTENTIONS OF THE A PPELLANT THAT NO DISALLOWANCE U/S 11(4) IS PERMISSIBLE OR THAT IT AMOUNTS TO DUPL ICATION OF THE INCOME, THE ID. CIT(A) HAS ERRED IN FRAMING ASSESSMENT U/S 11(4) IN ASMUCH AS HE HAS NOT GRANTED DEPRECIATION AMOUNTING TO RS.36,86,34,716/- . 4. LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN C ONFIRMING THE VIEW TAKEN BY AO IN COMPUTING THE 15% OF INCOME ALLOWED FOR ACCUM ULATION U/S. 11(1) ON 'NET INCOME' INSTEAD OF 'GROSS RECEIPTS' 5. LD. CIT(A) OUGHT TO HAVE WORKED OUT THE DEFIC IENCY AND PERMITTED THE SAME TO BE CARRIED FORWARD. 6. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALT ER, EDIT, DELETE, MODIFY OR CHANGE ALL OR ANY OF THE GROUNDS OF APPEAL AT THE T IME OF OR BEFORE THE HEARING OF THE APPEAL. 3. BRIEFLY STATED FACTS, AS CULLED OUT FROM THE ASS ESSMENT RECORDS, ARE THAT THE ASSESSEE IS A STATUTORY BODY GOVERNED BY GUJARAT MA RITIME BOARD ACT, 1981 AND ENGAGED IN THE ACTIVITY OF ADVANCEMENT OF THE OBJEC T OF GENERAL PUBLIC UTILITY BY WAY OF ADMINISTERING, CONTROL AND MANAGING MINOR PO RTS IN THE STATE OF GUJARAT. IN THE INSTANT CASE, THE CIT, GANDHINAGAR VIDE HIS ORDER DATED 15.06.2005 HAS GRANTED THE REGISTRATION U/S 12AA TO THE ASSESSEE WITH RETROSPECTIVE EFFECT FROM 01.04.2002. 4. THE ASSESSEE FILED ITS RETURN OF INCOME ON 29.11 .2003 SHOWING THE TOTAL TAXABLE INCOME AT RS. NIL. THE PROCESSING U/S 143( 1)(A) OF THE ACT WAS COMPLETED ON 27.0.2004. THEREAFTER, THE CASE WAS S ELECTED FOR SCRUTINY AND ASSESSMENT ORDER U/S 143(3) WAS PASSED ON 31.03.200 6 AT RETURNED INCOME. SUBSEQUENTLY, THE ASSESSMENT WAS RE-OPENED AND NOTI CE WAS ISSUED U/S 148 OF THE ACT ON 15.02.2007, IN RESPONSE TO WHICH THE ASS ESSEE FILED THE REVISED RETURN ON 23.3.2007 DECLARING TOTAL INCOME AT RS. NIL. TH EREAFTER, NOTICE U/S 143(2) AND 142(1) WERE ISSUED AND DULY SERVED ON THE ASSESSEE IN TIME. THEREAFTER, LD. ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 4 ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143( 3) R.W.S. 147 OF THE INCOME- TAX ACT, AFTER MAKING FOLLOWING OBSERVATIONS;- I. NOT TREATING THE ASSESSEE AS A TRUST RUNNING FOR CH ARITABLE PURPOSES; RATHER TREATED IT AS CARRYING ON BUSINESS ACTIVITY AND ACCORDINGLY DID NOT ALLOW THE ASSESSEE TO CONSIDER THE PAYMENT OF RS.44 ,38,23,000/- PAID TO GOVERNMENT OF GUJARAT AS CHARGES ON REVENUE U/S 12A OF GUJARAT MARITIME BOARD ACT, AS THE PAYMENTS TOWARDS THE CHA RITABLE PURPOSES OF THE INSTITUTION. II. REDUCED THE CLAIM OF DEPRECIATION FROM RS.52,67,27, 832/- TO RS.42,28,21,795/-, THEREBY ALLOWING LESS CLAIM OF R S.10,39,06,037/-. III. ADDITION ON ACCOUNT OF NON-DISCLOSURE OF PREMIUM RE CEIVED ON PLOTS AT ALANG AND WATERFRONT/JETTY AT RS.12,92,00,000/-. IV. DETERMINATION OF INCOME OF THE ASSESSEE U/S 11(1) O F THE INCOME-TAX ACT AS WELL AS U/S 11(4) OF THE INCOME-TAX ACT AT RS.38 .79 CRORES U/S 11(1) OF THE ACT AND NEGATIVE INCOME U/S 11(4) OF THE ACT. AFTER MAKING ALL THE ABOVE OBSERVATIONS, THE ASSESS MENT WAS COMPLETED AT THE INCOME DETERMINED U/S 11(A) OF THE ACT AT RS.38 ,79,23,874/-. AGGRIEVED THE ASSESSEE WENT IN APPEAL BEFORE THE LD. CIT(A) WHO E NHANCED THE INCOME OF THE ASSESSEE FROM RS.38,79,23,874/- TO RS.64,80,62,360/ -. 5. AGGRIEVED THE ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 6. THE ASSESSEE HAS RAISED VARIOUS GROUNDS OF APPEA L WHICH ARE INTER- CONNECTED, BUT IN OUR VIEW FOLLOWING SUBSTANTIVE IS SUES HAVE BEEN TAKEN UP BY THE ASSESSEE. 1. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE VIEW TAK EN BY THE ASSESSING OFFICER IN HOLDING THAT THE ACTIVITIES CARRIED OUT BY THE APPELLANT WERE IN THE NATURE OF BUSINESS AND NOT CHARITABLE ACTIVITY FOR ADVANCEMENT OF THE OBJECT OF GENERAL PUBLIC UTILITY. ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 5 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CO NFIRMING THE DISALLOWANCE OF RS.44,38,23,000/- BY NOT ALLOWING I T AS APPLICATION OF INCOME WITHOUT APPRECIATING THE FACT THAT THIS AMOU NT OF RS.44,38,23,000/- HAS BEEN SPENT TOWARDS WATERFRONT CHARGES/ROYALTY PAID TO GOVERNMENT OF GUJARAT. 3. ALTERNATIVELY, LD. CIT(A) HAS ERRED IN NOT APPRECIA TING THE ASSESSMENT OF THE APPELLANT, BEING A CHARITABLE INSTITUTION, AND FURTHER APPLYING THE PROVISIONS OF SECTION 43B OF THE INCOME-TAX ACT ON THE PAYMENT OF ROYALTY/WATERFRONT CHARGES PAID TO GUJARAT GOVERNME NT AFTER THE DUE DATE OF FILING OF RETURN OF THE TRUST. 4. THE LD. CIT(A) HAS ERRED IN FRAMING ASSESSMENT AT A N INCOME OF RS.64,80,62,360/- BY CLUBBING INCOME UNDER TWO PROV ISIONS OF SECTION 22(1) OF THE ACT AND ALSO U/S 11(4) OF THE ACT, WIT HOUT APPRECIATING THAT THE SAID INCOME IS BEING ASSESSEE TWICE. 5. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER OF RS.12,92,00,000/- AS NOTIONAL INCOME ON ACCOUNT OF PREMIUM OF ALANG PLOTS. 6. THE LD. CIT(A) HAS ERRED IN GRANTING DEDUCTION FOR ACCUMULATION U/S 11(1) OF THE ACT ONLY ON NET SURPLUS AND NOT ON ITS GROSS RECEIPTS. 7. THE LD. CIT(A) HAS ERRED IN NOT ALLOWING THE DEDUCT ION IN RELATION TO INCREASE IN THE FIXED ASSETS BEING APPLICATION OF I NCOME AMOUNTING TO RS.20,68,73,986/-. 8. THE LD. CIT(A) HAS ERRED IN FRAMING ASSESSMENT U/S 11(1) WITHOUT GRANTING DEPRECIATION AMOUNTING TO RS.36,86,34,716/ -. 7. NOW, WE TAKE UP THE FIRST SUBSTANTIVE GROUND, WH ICH READS AS UNDER:- THE LD. CIT(A) HAS ERRED IN CONFIRMING THE VIEW TA KEN BY THE ASSESSING OFFICER IN HOLDING THAT THE ACTIVITIES CARRIED OUT BY THE A PPELLANT WERE IN THE NATURE OF ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 6 BUSINESS AND NOT CHARITABLE ACTIVITY FOR ADVANCEMEN T OF THE OBJECT OF GENERAL PUBLIC UTILITY 7.1 THE LD. ASSESSING OFFICER FRAMED THE ASSESSMENT BY TAKING BOTH THE OPTIONS OF CALCULATING THE INCOME OF THE ASSESSEE. ON ONE HAND, THE INCOME WAS COMPUTED U/S 11(1) BY TREATING THE TRUST AS AN ASSE SSEE CARRYING ON CHARITABLE ACTIVITY FOR ADVANCEMENT OF GENERAL PUBLIC UTILITY AND ON THE OTHER HAND ALSO APPLIED PROVISIONS OF SECTION 11(4) WHICH RELATES T O UNDERTAKINGS OWNED BY TRUSTS WHICH ARE ENGAGED IN THE BUSINESS ACTIVITY. THIS VIEW OF THE ASSESSING OFFICER WAS FURTHER CONFIRMED BY THE LD. CIT(A). 7.2 AGGRIEVED, THE ASSESSEE IS NOW IN APPEAL. 7.3 AT THE OUTSET, LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT SIMILAR ISSUE IN ASSESSEES OWN CASE FOR ASSES SMENT YEAR 2004-05 CAME UP BEFORE THE HONBLE CO-ORDINATE BENCH AND THEY HAVE DISMISSED THE APPEAL OF THE REVENUE AND HAS HELD THAT THE ASSESSEE IS A CHA RITABLE TRUST U/S 12A OF THE ACT, BY FOLLOWING THE DECISION OF HONBLE APEX COUR T IN ASSESSEES OWN CASE, REPORTED AT (2007) 295 ITR 561 (SC). ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE LOWER AU THORITIES. 7.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THIS SUBSTANTIVE GROUND IS THAT WHETHE R THE ASSESSEE IS TO BE ASSESSED AS A CHARITABLE TRUST DERIVING INCOME FROM PROPERTY HELD UNDER TRUST WHOLLY FOR CHARITABLE PURPOSES AND MORE SPECIFICALL Y FOR THE OBJECT OF GENERAL PUBLIC UTILITY OR TO BE ASSESSED AS A TRUST CARRYIN G ON BUSINESS ACTIVITIES. WE OBSERVE THAT THE ASSESSEE-BOARD IS ENGAGED IN THE A CTIVITY OF ADMINISTERING, CONTROLLING AND MANAGING MINOR PORTS IN THE STATE O F GUJARAT AND THE SAME IS REGISTERED U/S 12AA OF THE INCOME-TAX ACT WITH EFFE CT FROM 01.04.2002. WE FURTHER OBSERVE THAT THE CO-ORDINATE BENCH IN ITA N O.2842/AHD/2007 IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2004-05 HAS DEALT WITH THIS ISSUE AND HAS OBSERVED AS UNDER:- ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 7 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROU GH THE FACTS OF THE CASE . AT THE OUTSET WE FIND THAT THE ISSUE RAISED UNDER GROU ND NO.3 OF THE APPEAL REGARDING STATUS OF THE ASSESSEE AS A TRUST IS SET TLED BY THE HONBLE APEX COURT IN THEIR AFORESAID DECISION IN THE ASSESSEES OWN CASE, WHEREIN THE HON'BLE COURT OBSERVED 'ONE OF THE OBJECTIONS RAISED ON BEHALF OF THE DEPA RTMENT WAS THAT THE GUJARAT MARITIME BOARD IS NOT ENTITLED TO THE BENEFIT OF SE CTION 11 OF THE 1961 ACT AS AS THE SAID BOARD WAS NOT A TRUST UNDER THE PUBLC TRUS TS ACT AND THEREFORE, IT WAS NOT ENTITLED TO CLAIM REGISTRATION UNDER SECTION 12 A OF THE 1961 ACT. THE DEPARTMENT'S CASE WAS THAT THE MARTIME BOARD WAS A STATUTORY AUTHORITY. IT WAS NOT A TRUST. ITS BUSINESS WAS NOT HELD UNDER A TRUST. ITS PROPERTY WAS NOT HELD UNDER TRUST. THEREFORE, THE BOARD WAS NOT ENTI TLED TO BE REGISTERED AS A CHARITABLE REGISTERED AS A CHARITABLE INSTITUTION. IT WAS THE CASE OF THE DEPARTMENT THAT THE BOARD WAS PERFORMING STATUTORY FUNCTIONS. DEVELOPMENT OF MINOR PORTS IN THE STATE OF GUJARAT CANNOT BE TE RMED AS THE WORK UNDERTAKEN FOR CHARITABLE PURPOSES AND IN THE CIRCUMSTANCES TH E COMMISSIONER REJECTED THE BOARDS APPLICATION UNDER SECTION 12A OF THE 1961 A CT. IN THE LIGHT OF THE ABOVE CASE OF THE DEPARTMENT, WE ARE REQUIRED TO CONSIDER THE EXPRESSION ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY IN SECTION 2(15) OF THE 1961 ACT. AT THE OUTSET, WE MAY POINT OUT THAT SECTION 10(20) AND SECTION 11 OF THE 1961 ACT OPERATE IN TOTALLY DIFFERENT SPHERES. EVEN IF T HE BOARD HAS CASED TO BE A LOCAL AUTHORITY IT IS NOT PRECLUDED FROM CLAIMING EXEMPTION UNDER 11(1) OF THE 1961 ACT. THEREFORE, WE HAVE TO READ SECTION 11 (1) IN THE LIGHT OF THE DEFINITION OF THE WORDS CHARITABLE PURPOSES' AS DE FINED UNDER SECTION 2(15) OF THE 1961 ACT. THE PRESENT CASE IN OUR VIEW IS SQUARELY COVERED BY THE JUDGMENT OF THIS COURT IN THE CASE OF CIT V. ANDHRA PRADESH STATE ROAD TRA NSPORT CORPORATION [1986] 159 ITR 1 (SC) IN WHICH IT HAS BEEN HELD THAT SINCE THE CORPORATION WAS ESTABLISHED FOR THE PURPOSE OF PROVIDING EFFICIENT TRANSPORT SYSTEM, HAVING NO PROFIT MOTIVE, THOUGH IT EARNS INCOME IN THE PROCES S, IT IS NOT LIABLE TO INCOME- TAX. APPLYING THE RATIO OF THE SAID JUDGMENT IN THE CASE OF ANDHRA PRADESH STATE ROAD TRANSPORT CORPORATION [1986] 159 ITR 1 (SC), W E FIND THAT, IN THE PRESENT CASE, THE GUJARAT MARITIME BOARD IS ESTABLI SHED FOR THE PREDOMINANT PURPOSE OF DEVELOPMENT OF MINOR PORTS WITHIN THE ST ATE OF GUJARAT, THE MANAGEMENT AND CONTROL OF THE BOARD IS ESSENTIALLY WITH THE STATE GOVERNMENT AND THERE IS NO PROFIT MOTIVE, AS INDICATED BY THE PROVISION OF SECTION 73, 74 AND 75 OF THE 1981 ACT. THE INCOME EARNED BY THE BOARD IS DEPLOYED FOR THE DEVELOPMENT OF MINOR PORTS IN THE STATE OF GUJARAT. IN THE CIRCUMSTANCES, IN OUR VIEW THE JUDGMENT OF THIS COURT IN ANDHRA PRAD ESH STATE ROAD TRANSPORT CORPORATION [1986] 159 ITR 1 SQUARELY APPLIES TO TH E FACTS OF THE PRESENT CASE. ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 8 BEFORE CONCLUDING WE MAY MENTION THAT UNDER THE SCH EME OF SECTION 11(1) OF THE 1961 ACT, THE SOURCE OF INCOME MUST BE HELD UND ER TRUST OR UNDER OTHER LEGAL OBLIGATION. APPLYING THE SAID TEST IT IS CLEA R, THAT THE GUJARAT MARITIME BOARD IS UNDER LEGAL OBLIGATION TO APPLY THE INCOME WHICH ARISES DIRECTLY AND SUBSTANTIALLY FROM THE BUSINESS HELD UNDER TRUST FO R THE DEVELOPMENT OF MINOR PORTS IN THE STATE OF GUJARAT. THEREFORE, THEY ARE ENTITLED TO BE REGISTERED AS 'CHARITABLE TRUST' UNDER SECTION 12A OF THE 1961 AC T. ' 5.1 THUS, IN THE ALIGHT OF AFORESAID CONCLUSION O F THE HON'BLE APEX COURT, THE ASSESSEE BOARD IS A CHARITABLE TRUST AND IS UNDER L EGAL OBLIGATION TO APPLY THE INCOME WHICH ARISES DIRECTLY AND SUBSTANTIALLY FROM THE BUSINESS FIELD UNDER TRUST FOR THE DEVELOPMENT OF MINOR PORTS IN THE STA TE OF GUJARAT. THEREFORE, FIRST OBJECTION OF THE REVENUE IN GROUND NO.3 REGAR DING THE ASSESSEE BEING A CHARITABLE TRUST U/S 12A OF THE ACT, NO LONGER SURV IVES FOR ADJUDICATION AND IS THEREFORE, DISMISSED. 7.5 FROM GOING THROUGH THE ABOVE DECISION OF THE CO -ORDINATE BENCH WHICH IS RELIED ON THE DECISION OF HONBLE APEX COURT, TH AT TOO IN ASSESSEES OWN CASE, I.E., CIT VS. GUJARAT MARITIME BOARD, REPORTED IN ( 2007) 295 ITR 561 (SC), WHEREIN THE HONBLE APEX COURT HAS OBSERVED THAT TH E APPELLANT IS ESTABLISHED FOR THE PREDOMINANT PURPOSES OF DEVELOPMENT OF MINO R PORTS WITHIN THE STATE OF GUJARAT, THE MANAGEMENT AND CONTROL OF THE BOARD IS ESSENTIALLY WITH THE STATE GOVERNMENT AND THERE IS NO PROFIT MOTIVE, AS INDICATED BY THE PROVISIONS OF SECTION 73, 74 AND 75 OF THE 1981 ACT. THE INCOM E EARNED BY THE BOARD IS DEPLOYED FOR THE DEVELOPMENT OF MINOR PORTS IN THE STATE OF GUJARAT AND THEREFORE, THEY ARE ENTITLED TO BE REGISTERED AS CH ARITABLE TRUST U/S 12A OF THE INCOME-TAX ACT, 1961. THEREFORE, RESPECTFULLY FOL LOWING THE DECISION OF HONBLE APEX COURT AND THE CO-ORDINATE BENCH, AHMEDABAD (SU PRA) IN ASSESSEES OWN CASE, WE ARE INCLINED TO BELIEVE THAT THE ASSESSEE IS A CHARITABLE TRUST CARRYING ON ACTIVITY OF ADVANCEMENT OF PUBLIC UTILITY WITHOUT A NY PROFIT MOTIVE AND IS REQUIRED TO BE ASSESSED AS PER THE PROVISIONS OF SE CTION 11(1) OF THE INCOME-TAX ACT, 1961. ACCORDINGLY, THIS GROUND OF THE ASSESSE E IS ALLOWED. 8. SUBSTANTIVE GROUND NOS. 2 & 3 ARE INTER-CONNECTE D, WHICH READ AS UNDER:- 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF RS.44,38,23,000/- BY NOT ALLOWING IT AS APPLICAT ION OF INCOME WITHOUT ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 9 APPRECIATING THE FACT THAT THIS AMOUNT OF RS.44,38, 23,000/- HAS BEEN SPENT TOWARDS WATERFRONT CHARGES/ROYALTY PAID TO GOVERNME NT OF GUJARAT. 3. ALTERNATIVELY, LD. CIT(A) HAS ERRED IN NOT APPRE CIATING THE ASSESSMENT OF THE APPELLANT, BEING A CHARITABLE INSTITUTION, AND FURT HER APPLYING THE PROVISIONS OF SECTION 43B OF THE INCOME-TAX ACT ON THE PAYMENT OF ROYALTY/WATERFRONT CHARGES PAID TO GUJARAT GOVERNMENT AFTER THE DUE DATE OF FI LING OF RETURN OF THE TRUST. 8.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E LD. ASSESSING OFFICER OBSERVED THAT THE ASSESSEE-TRUST HAS CLAIMED EXPEND ITURE TOWARDS GOVERNMENT CHARGES ON REVENUE RELATING TO WATERFRONT/ROYALTY C HARGES PAYABLE TO GOVERNMENT OF GUJARAT AT RS.44,38,23,000/- AND FURT HER CLAIMED IT AS APPLICATION OF INCOME UNDER THE PROVISIONS OF SECTI ON 11(1) OF THE ACT. LD. ASSESSING OFFICER WAS OF THE VIEW THAT THE GUJARAT GOVERNMENT WHICH CONCEIVED, FORMULATED AND FORMED THE GUJARAT MARITI ME BOARD WHILE RE- COURSING TO LEGAL AND PROCEDURAL ASPECT AND EVENTUA LLY PROVIDING THE MUCH NEEDED CAPITAL AND LOGISTICS, QUALIFIED TO BE TERME D AS ORIGINAL FOUNDER OF THE ASSESSEE-INSTITUTION. FURTHER, AS PER THE PROVISION S OF SECTION 22A OF THE GUJARAT MARITIME BOARD ACT, 1981, WHICH STIPULATED THAT THE WATERFRONT ROYALTY HAS TO BE CALCULATED ON THE BASIS OF PER TON GOODS HANDL ED AT THE PORT AND THEREFORE, THE PAYMENT OF RS.44,38,23,000/- IS NOT A PAYMENT T OWARDS THE CHARITABLE PURPOSES AND IS NOT ELIGIBLE AS APPLICATION OF INCO ME AS MENTIONED IN SECTION 11(1A) OF THE ACT. WHEN THE ISSUE CAME IN APPEAL BE FORE THE LD. CIT(A), HE WAS OF THE VIEW THAT THE INCOME OF THE ASSESSEE NEEDS T O BE CALCULATED U/S 11(4) OF THE ACT, TREATING IT AS A BUSINESS UNDERTAKING AND DISALLOWED THE PAYMENT OF RS.44,38,23,000/- ON THE GROUND THAT LEVY OF WATERF RONT ROYALTY OF RS.44,38,23,000/- IS AN ALLOWABLE REVENUE EXPENDITU RE U/S 37 OF THE ACT SUBJECT TO THE CONDITION THAT CLAIM OF THE APPELLANT IS DUT Y BOUND TO QUANTITY THE ROYALTY AS PER THE PROVISIONS OF SECTION 22A OF THE GUJARAT MARITIME BOARD ACT AND SECTION 74(1)(GG) OF THE GUJARAT MARITIME BOARD ACT, 1981 AND THE AMOUNT SO QUANTIFIED WILL BE ALLOWED IN THE YEAR OF PAYMEN T AS PER THE PROVISIONS OF SECTION 43B. THE LD. CIT(A) FURTHER OBSERVED THAT SINCE IN THE PRESENT SITUATION NEITHER THE QUANTIFICATION HAS TAKEN PLACE NOR IS T HERE ANY RATIONALE FOR EVEN ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 10 ADHOC PROVISION MADE, THE SUM OF RS.44,38,23,000/- IS NOT ALLOWABLE AS A REVENUE EXPENDITURE FOR THE PRESENT YEAR. AGGRIEVE D, THE ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 8.2 AT THE OUTSET, LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT FOR THE ASSESSMENT YEAR 2004-05 THE REVENUE WA S IN APPEAL BEFORE THE CO- ORDINATE BENCH AGAINST THE DISALLOWANCE OF RS.71,87 ,33,566/- AS BEING HIT BY PROVISIONS OF SECTION 13(1)(C) OF THE ACT AND THE S AME WAS DECIDED AGAINST THE REVENUE AND FURTHER, REVENUE WENT IN APPEAL BEFORE THE HONBLE GUJARAT HIGH COURT IN TAX APPEAL NO.673 OF 2010. THE LD. AUTHOR IZED REPRESENTATIVE FURTHER SUBMITTED THAT IF THE DECISION OF HONBLE GUJARAT H IGH COURT IS APPLIED FOR THE YEAR UNDER APPEAL, THEN CERTAINLY THE ASSESSEE WILL BE ELIGIBLE FOR CLAIMING APPLICATION OF INCOME OF RS.44,38,23,000/-, AGAINST THE GROSS INCOME EARNED BY THE CHARITABLE TRUST. ON THE OTHER HAND, LD. DEPAR TMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 8.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE BEFORE US RAISED BY THE ASSESSEE IS THAT THE AMOUNT OF RS.44,38,23,000/-, WHICH HAS BEEN CLAIMED AS REVENU E EXPENDITURE AS APPLICATION OF INCOME BY WAY OF PAYMENT TO THE GUJA RAT GOVERNMENT TOWARDS WATERFRONT/ROYALTY CHARGES, HAVE NOT BEEN ACCEPTED BY THE LD. ASSESSING OFFICER AS APPLICATION OF INCOME UNDER THE PROVISIONS OF SE CTION 11(1A) AND LD. CIT(A) HAS DISALLOWED THE SAME ON THE GROUND THAT THIS AMO UNT WAS NOT QUANTIFIED AND ALSO NOT PAID DURING THE YEAR. WE HAVE ALREADY DECIDED, WHILE ADJUDICATING THE FIRST SUBSTANTIVE GROUND, THAT THE ASSESSEE IS A CHARITABLE TRUST ENGAGED IN THE ADVANCEMENT OF ANY OTHER OBJECT OF G ENERAL PUBLIC UTILITY ENUMERATED IN SECTION 2(15) OF THE INCOME-TAX ACT A ND IS NOT A BUSINESS UNDERTAKING. CERTAINLY, ONCE AS WE HAVE HELD THAT T HE ASSESSEE-BOARD-TRUST IS NOT GOVERNED BY PROVISIONS OF SECTION 11(4) OF THE ACT AND THE INCOME IS TO BE CALCULATED AS PER THE PROVISIONS OF SECTION 11(1) O F THE INCOME-TAX ACT, THEN ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 11 THERE REMAINS NO REQUIREMENT TO ADJUDICATE AS TO WH ETHER THE EXPENDITURE IS A REVENUE EXPENDITURE OR CAPITAL EXPENDITURE AND FURT HER PROVISIONS OF SECTION 43B WOULD HAVE NO APPLICATION AT ALL, IN VIEW OF TH E DECISION OF CO-ORDINATE BENCH, AHMEDABAD IN THE CASE OF GUJARAT INDUSTRIAL DEVELOPMENT CORPN VS. ACIT, REPORTED IN [2011] 129 ITD 73 (AHD.). 8.4 NOW, WE WILL EXAMINE AS TO WHETHER THE EXPENDIT URE OF RS.44,38,23,000/- IS APPLICATION OF INCOME AS PER THE PROVISIONS OF S ECTION 11(1) OF THE INCOME-TAX ACT. WE FIND THAT THIS ISSUE CAME UP BEFORE THE CO -ORDINATE BENCH FOR ASSESSMENT YEAR 2004-05 IN ITA NO.2842/AHD/2007 IN APPELLANTS OWN CASE, WHEREIN THE CO-ORDINATE BENCH DISMISSED THE REVENUE S GROUND BY OBSERVING AS UNDER:- NOW ADVERTING TO GROUND NO.1IN THE APPEAL REGARDIN G DISALLOWANCE OF RS. 71,87,33,566/-, BEING WATERFRONT CHARGES/ROYALTY PAID TO THE STATE GOVERNMENT, THE AO DISALLOWED THE CLAIM INVOKING PR OVISIONS OF SEC. 13(1)(C) OF THE ACT. BEFORE THE AO, THE ASSESSEE EXPLAINED IN T HEIR LETTER DATED 19/9/06 THAT THE ABOVE AMOUNT HAS BEEN PAID TO GOVERNMENT OF GUJ ARAT AS WATERFRONT CHANGES / ROYALTY AND ARE LEVIED ESSENTIALLY FOR AL LOWING GMB'S OPERATION ALONG THE COAST LINE OF GUJARAT WHICH IS UNDER THE SOVERE IGN STATUTORY JURISDICTION OF STATE OF GUJARAT . IN THIS CONNECTION, THE LD. CIT( A) NOTED THAT THE LEGISLATURE HAD CHOSEN TO LEVY AND COLLECT SUCH CHARGES AND THE SAME CANNOT BE TREATED AS A BENEFIT FOR THE GOVT. IN FACT, IT IS THE OTHER WAY AROUND AND THE ASSESSEE IS BENEFITED BY GETTING A COMMERCIAL RIGHT OVER EXPLOI TATION OF THE STATE'S ASSET FOR EARNING INCOME. AS SUCH, SINCE THERE WAS NO BENEFIT ACCRUING DIRECTLY OR INDIRECTLY TO THE GOVT. BY THE PAYMENT OF ROYALTY, THEREFORE, THE PROVISIONS OF SECTION 13(1)(C) WILL NOT APPLY,-THE ID. CIT(A) CON CLUDED. THE ID. CIT(A) FURTHER OBSERVED THAT THE ASSESSEE COULD NOT HAVE CONDUCTED ITS ACTIVITIES WITHOUT PAYMENT OF ROYALTY TO THE GOVT. AS SUCH, THE EXPEND ITURE SHALL BE CONSIDERED AS LEGITIMATE AND INCURRED FOR THE PURPOSES OF EARNING INCOME. SUCH PAYMENT SHALL BE EQUATED WITH PAYMENTS OF PROPERTY TAX, CESS, DUT Y OR OTHER TAXES LEVIED BY THE GOVT. OR STATUTORY AUTHORITIES. AS IS EVIDENT FROM THE IMPUGNED ORDERS, THE PAYMENT ON ACCOUNT OF WATER FRONT ROYALTY COMMENCED SINCE FINANCIAL YEAR 1999- 2000 I.E. MUCH BEFORE ENACTMENT OF FINANCE ACT, 200 2 AND IN ANY CASE STATE GOVERNMENT WAS PAID WATER FRONT ROYALTY ON ACCOUNT OF USE OF ITS WATER FRONT FOR THE PURPOSES OF GMB. 7.1 WE FIND THAT THE AFORESAID LEVY OF WATER FRONT LEVY HAD BEEN PAID BY THE ASSESSEE IN TERMS OF AMENDED PROVISIONS OF SEC. 22A READ WITH SEC 74(GG) OF THE GUJARAT MARITIME BOARD ACT, 1981.THESE PROVISIONS W ERE INTRODUCED BY GUJARAT ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 12 MARITIME BOARD (AMENDMENT & VALIDATION) ACT,2005 [G UJARAT ACT NO. 18 OF 2005] W.E.F 1.4.1999. IN THE LIGHT OF PROVISIONS O F THE SAID, WE ARE OF THE OPINION THAT THE FUNCTIONING OF THE BOARD FOR THE PURPOSES OF THE ACTG UNDER WHICH IT WAS ESTABLISHED DEPENDED UPON PAYMENT OF THESE CHARGES TO THE STAGE GOVERNMENT, AS PER THE PROVISIONS OF SS. 73, 74, 75 OF THE GUJARAT MARITIME BOARD ACT, 1981. IN THIS CONTEXT, IN CIT V. ESTATE OF V.L. ETHR, [1982] 136 ITR 12 (MAD), IT WAS HELD THAT INCOME FROM PROPERTIES WOULD HAVE TO BE ARRI VED AT IN THE NORMAL COMMERCIAL MANNER WITHOUT REFERENCE TO THE PROVISON S WHICH WERE ATTRACHED BY SECTION 14. IN CIT VS. JANAKI AMMAL AYYA NADAR TRU ST [1985] 153 ITR 159 (MAD), IT WAS HELD THAT PAYMENT OF TAX IS NECESSARY TO PRESERVE THE PROPERTY OF THE TRUST WHEN A DEMAND IS LAWFULLY MADE. THEREFOR E, THE EXPENDITURE INCURRED BY WAY OF PAYMENT OF TAX OUT OF THE CURRENT YEAR'S INCOME HAS TO BE CONSIDERED AS APPLICATION FOR CHARITABLE PURPOSES. LIKEWISE IN CI T V. JAYASHREE CHARITY TRUST [1986] 159 ITR 280, MORALE CALCUTTA HIGH COURT HELD THAT THE INCOME TO BE CONSIDERED WILL BE THAT WHICH IS ARRIVED AT IN THE CONTEXT OF WHAT IS AVAILABLE IN THE HANDS OF THE ASSESSEE SUBJECT TO AN ADJUSTMENT OF ANY EXPENSES EXTRANEOUS TO THE TRUST. IN OUR VIEW, INCOME APPLIED TO MEET EXPE NSES, SUCH AS NORMAL EXPENSES OF MANAGEMENT MAY NOT, STRICTLY SPEAKING, BE CHARIT ABLE BUT ARE INCIDENTAL TO THE CARRYING OUT OF CHARITABLE PURPOSES AND THEREFORE, SUCH EXPENSES CANNOT BE EXCLUDED FROM EXEMPTION. THE PAYMENT OF WATERFRONT CHARGES/ROYALTY PAID TO THE STATE GOVERNMENT BEING SINE QUA NON FOR THE FUNCTIO NING OF THE ASSESSEE BOARD, HAS TO BE TREATED AS APPLICATION OF INCOME TOWARDS THE OBJECTS OF THE TRUST ENSHRINED IN GUJARAT MARITIME BOARD ACT, 1981. IN VIEW OF THE FOREGOING, ESPECIALLY WHEN THE REVENUE HAVE NOT PLACED BEFORE US ANY MATERIAL IN ORDER TO CONTROVERT THE AFORESAID FINDINGS OF THE ID. CIT(A) , WE HAVE NO ALTERNATIVE BUT TO UPHOLD HIS FINDINGS. THUS, GROUND NO.1 IS DISMISSE D. WE FURTHER FIND THAT THAT FOR ASSESSMENT YEAR 2004 -05 REVENUE WENT IN APPEAL BEFORE THE HONBLE GUJARAT HIGH COURT BEING AGGRIEVED BY THE DECISION OF CO-ORDINATE BENCH, AHMEDABAD. THE HONBLE GUJAR AT HIGH COURT, VIDE ORDER DATED 30.08.2011 IN TAX APPEAL NO.673 OF 2010 , DISMISSED THE REVENUES APPEAL BY OBSERVING AS UNDER WITH REFERENCE TO DISA LLOWANCE OF RS.71,87,33,566/- BEING WATERFRONT ROYALTY CHARGES PAID TO THE STATE GOVERNMENT.:- 4. ON HEARING LEARNED COUNSEL MRS. MAUNA BHATT FOR THE REVENUE AND ON PERUSAL OF THE RECORD, IT CAN BE NOTED THAT IN TAX APPEAL NO.1433 OF 2005 THE QUESTION WITH REGARD TO THIS ASSESSEE FULFILLING TH E CONDITIONS ENVISAGED IN SECTION 12AA FOR ITS REGISTRATION UNDER SECTION12A OF THE ACT, HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. THE TRIBUNAL HAS ALSO TA KEN NOTE OF THIS FACT. IT ALSO HAS REFERRED TO THE JUDGMENT OF THE APEX COURT WHICH CO NFIRMED THAT THE ASSESSEE BEING A CHARITABLE TRUST UNDER SECTION 12A, IT WAS UNDER A LEGAL OBLIGATION TO ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 13 APPLY INCOME WHICH ARISES DIRECTLY AND SUBSTANTIALL Y FROM THE BUSINESS HELD UNDER THE TRUST FOR THE DEVELOPMENT OF MINOR PORTS FOR THE STATE OF GUJARAT. 5. THE TRIBUNAL, WITH REGARD TO THE QUESTION UNDER CONSIDERATION, HAS NOTED THE FINDINGS OF CIT(APPEALS) THAT 'THE ASSESSEE CAME IN TO EXISTENCE BY AN ACT OF THE LEGISLATURE '. THERE IS NO PERSON WHO CAN BE NAMED AS FOUNDER, AUTHOR OR SETTLER. SINCE NO INDIVIDUAL IS A FOUNDER, AUTHOR OR SETTLER OF THE ASSESSEE, QUESTION OF FURNISHING THE NAME AND ADDRESS OF THE FOUNDER, AUT HOR OR SETTLER BY THE ASSESSEE DOES NOT ARISE. THE TRIBUNAL ALSO NOTED THAT FOR TH E PURPOSE OF DEVELOPMENT AND MAINTENANCE OF MINOR PORTS UNDER THE GUJARAT MARITI ME BOARD ACT, 1981, THE SAID BOARD HAS BEEN ESTABLISHED. IT WAS ALSO NOTED THAT IN THE PREAMBLE IT GETS REFLECTED THAT THE BOARD ALSO RENDERS SERVICES LIKE STEVEDORING, TRANSPORT OF GOODS, STORAGE, SHIPPING, ETC. BUT THE MAIN OBJECT OF THE TRUST UNDER THE ACT IS THE DEVELOPMENT OF MINOR PORTS OF THE STATE OF GUJARAT. THE INCOME ACCRUING ARE REQUIRED TO BE DEPLOYED AND CREDITED TO SEPARATE FU ND TO BE UTILIZED FOR THE DEVELOPMENT OF MINOR PORTS WITHIN THE STATE. THEREF ORE, UPHOLDING THE FINDINGS OF CIT(APPEALS) THE TRIBUNAL NOTED THAT SINCE THERE WAS NO FOUNDER AND THE ASSESSEE RESPONDENT HAS BEEN CREATED BY THE LEGISLA TURE AND BEING A STATUTORY BODY, THE PROVISIONS OF SECTION 13(3) OF THE ACT WO ULD NOT BE ATTRACTED IN THE CASE OF THE ASSESSEE RESPONDENT. 6. THIS COURT ALSO FINDS, BY CLOSELY LOOKING AT THE PROVISIONS OF THE INCOME TAX ACT, THAT THE PROVISIONS OF SECTION 13(3) OF THE AC T IN THE CASE OF THE ASSESSEE IS NOT APPLICABLE AS THERE IS NO INCOME, WHICH CAN BE APPLIED WITHIN THE MEANING OF SECTION 12(1)(C) OF THE INCOME TAX ACT. THE TRIBUNA L HAS CORRECTLY INTERPRETED AND SUSTAINED THE ORDER OF CIT(APPEALS) BY NOTING T HAT PAYMENT MADE TO THE STATE GOVERNMENT TOWARDS WATER FRONT ROYALTY CHARGE S WAS INEVITABLE FOR FUNCTIONING OF THE ASSESSEE TRUST AND THAT SUCH A P AYMENT MADE TOWARDS OBJECTION OF THE TRUST AS ENSHRINED IN GUJARAT MARI TIME BOARD ACT, 1981 IS TOWARDS FULFILLMENT OF OBJECTION. THIS WAS RIGHTLY FOUND TO HAVE BEEN LEVIED BY VIRTU E OF STATUTORY PROVISIONS FOR ALLOWING THE ASSESSEE TO EXPLORE AND EXPLOIT ASSET OF THE STATE FOR COMMERCIAL PURPOSE. AND, SO DIRECT OR INDIRECT BENE FIT ALSO WAS FOUND TO HAVE ACCRUED TO THE GOVERNMENT DUE TO SUCH PAYMENT OF RO YALTY CHARGES AND THUS, APPLICATION UNDER SECTION 13(3) WAS JUSTIFIABLY DEN IED BY THE AUTHORITIES. 7. THERE ARE NO OTHER ASPECTS POINTED OUT BY THE RE VENUE FOR THIS COURT TO TAKE ANY OTHER STAND THAN ALREADY TAKEN, THIS TAX APPEAL THEREFORE, DESERVES NO FURTHER CONSIDERATION. THERE IS NO QUESTION OF LAW TO BE DECIDED AND HENCE THE SAME IS DISMISSED. 8.5 WE FURTHER FIND THAT THE REVENUE WENT IN APPEAL BEFORE THE HONBLE SUPREME COURT OF INDIA AGAINST THE DECISION OF THE HONBLE GUJARAT HIGH COURT ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 14 DATED 30.08.2011 AND SPECIAL LEAVE PETITION WAS DIS MISSED BY THE HONBLE APEX COURT VIDE ORDER DATED 27.08.2012. RESPECTFULLY FO LLOWING THE DECISION OF HONBLE APEX COURT, GUJARAT HIGH COURT AND THE CO-O RDINATE BENCH IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2004-05 AND APPLYING THE RATIO OF DECISION, WE ARE OF THE VIEW THAT THE ASSESSEE, BEI NG A CHARITABLE TRUST U/S 12A, WAS CERTAINLY UNDER LEGAL OBLIGATION TO MAKE PAYMEN T TO THE STATE GOVERNMENT TOWARDS WATERFRONT/ROYALTY CHARGES WHICH WAS INEVIT ABLE FOR THE FUNCTIONING OF THE ASSESSEE-TRUST AND SUCH PAYMENT WAS MADE TOWARD S THE OBJECT OF THE TRUST EMBEDDED IN THE GUJARAT MARITIME BOARD ACT, 1981 AN D CERTAINLY THESE PAYMENTS WHICH HAVE BEEN MADE TO THE STATE GOVERNME NT HAVE BEEN APPLIED FOR THE PUBLIC WELFARE PROJECTS WHICH IN THIS CASE IS WATERFRONT PROJECT. THEREFORE, THE ASSESSEE IS ELIGIBLE TO CLAIM RS.44, 38,23,000/- AS APPLICATION OF INCOME AGAINST THE GROSS INCOME RECEIVED AND THE SA ME SHOULD BE ACCOUNTED WHILE CALCULATING 85% OF THE GROSS INCOME WHICH NEE DS TO BE APPLIED FOR CHARITABLE ACTIVITIES BY THE ASSESSEE-TRUST. 8.6 AS REGARD THE APPLICABILITY OF PROVISIONS OF SE CTION 43B, WHICH REMAINS TO BE ACADEMIC IN THE PRESENT CASE AS WE HAVE HELD THA T THE ASSESSEE IS A CHARITABLE TRUST AND IS ELIGIBLE FOR CLAIM OF APPLICATION OF I NCOME OF RS.44,38,23,000/-; MORE SO THAT WE OBSERVE THAT THIS ISSUE CAME UP BEFORE T HE CO-ORDINATE BENCH IN THE CASE OF GUJARAT INDUSTRIAL DEVELOPMENT CORPORATION VS. ACIT, (2011) 129 ITD 73 (AHD), DATED 03.12.2010, WHEREIN THE FOLLOWING G ROUNDS WERE RAISED AND ADJUDICATED AS UNDER:- 15. GROUND NOS. 5, 6 AND 7 READ AS UNDER : '5. THE LEARNED CIT(A), GANDHINAGAR HAS ALSO ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE OF THE APPELLANT BY HOLDING THAT OUT OF THE DEPOSITS SHOWN UNDER THE HEAD CURRENT LIABILITIES AND PROVISIONS I N THE BALANCE SHEET OF THE APPELLANT, DEPOSITS OBTAINED IN CONNECTION WITH ALL OTMENT OF LAND OR STRUCTURE AND PERTAINING TO SALE/LEASE/LICENCE OF LAND AND ST RUCTURE BE ADDED IN THE INCOME AS BUSINESS INCOME OF THE APPELLANT. 6. THE LEARNED CIT(A), GANDHINAGAR HAS ALSO ERRED I N LAW AS WELL AS ON THE FACTS OF THE CASE OF THE APPELLANT BY CONFIRMING DI SALLOWANCE MADE BY THE ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 15 LEARNED AO OF RS. 5,37,26,241 FOR UNPAID AMOUNT AS SHOWN IN THE TAX AUDIT REPORT FILED BY THE APPELLANT UNDER PROTEST, ON THE GROUND THAT PROVISIONS OF S. 43B OF THE IT ACT, 1961 ARE APPLICABLE AS INCOME OF THE APPELLANT IS ASSESSABLE AS BUSINESS INCOME. 7. THE LEARNED CIT(A), GANDHINAGAR HAS ALSO ERRED I N LAW AS WELL AS ON THE FACTS OF THE CASE OF THE APPELLANT BY CONFIRMING DI SALLOWANCE MADE BY THE LEARNED AO OF RS. 4,67,46,181 FOR UNPAID AMOUNT OF LEAVE ENCASHMENT AS SHOWN IN THE TAX AUDIT REPORT FILED BY THE APPELLAN T UNDER PROTEST, ON THE GROUND THAT PROVISIONS OF S. 43B OF THE IT ACT, 196 1 ARE APPLICABLE AS INCOME OF THE APPELLANT IS ASSESSABLE AS BUSINESS INCOME.' 15.1 THESE GROUNDS HAVE ALSO BECOME REDUNDANT ON AC COUNT OF THE PRINCIPLE LAID DOWN HEREINABOVE THAT THE PROFITS EARNED BY THIS AS SESSEE ARE NOT SUBJECT TO TAX BEING OUT OF THE AMBIT OF S. 11(4) OF THE IT ACT BE CAUSE THE APPLICATION OF INCOME WAS NOT QUESTIONED BY THE AO. THE ENTIRE INCOME OF THIS ORGANIZATION BEING HELD AS EXEMPT, THEREFORE, THESE GROUNDS GET AUTOMATICAL LY ALLOWED. RESPECTFULLY APPLYING THE RATIO OF CO-ORDINATE BEN CH, WE ARE OF THE VIEW THAT, AS PROFIT EARNED BY THE ASSESSEE ARE NOT SUBJ ECT TO TAX BEING OUT OF THE AMBIT OF PROVISIONS OF SECTION 11(4) OF THE INCOME- TAX ACT AND THE INCOME OF THE ORGANIZATION BEING EXEMPT AS PER THE PROVISIONS OF SECTION 11(1) OF THE INCOME- TAX ACT, THIS GROUND HAS BECOME REDUNDANT AND ACCOR DINGLY THE PROVISIONS OF SECTION 43B OF THE ACT ARE NOT APPLICABLE ON THE PA YMENT OF RS.44,38,23,000/-. THUS, THIS GROUND OF THE ASSESSEE IS ALLOWED. 9. NOW WE TAKE-UP SUBSTANTIVE GROUND NO.4, WHICH RE ADS AS UNDER:- 4. THE LD. CIT(A) HAS ERRED IN FRAMING ASSESSMENT AT A N INCOME OF RS.64,80,62,360/- BY CLUBBING INCOME UNDER TWO PROV ISIONS OF SECTION 22(1) OF THE ACT AND ALSO U/S 11(4) OF THE ACT, WITHOUT A PPRECIATING THAT THE SAID INCOME IS BEING ASSESSEE TWICE. 9.1 THE LD. CIT(A) WHILE FRAMING THE APPELLATE ORDE R ENHANCED THE INCOME OF THE ASSESSEE TO RS.64,80,62,360/- AS AGAINST RS.38, 79,23,874/- ASSESSED BY THE LD. ASSESSING OFFICER BY CALCULATING THE INCOME U/S 11( 4) OF THE ACT AS WELL AS INCOME U/S 11(1) OF THE ACT AT RS.30,27,76,028/- AN D RS.34,52,86,332/- RESPECTIVELY AND FINALLY ARRIVING AT THE INCOME DEE MED NOT APPLIED FOR THE ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 16 CHARITABLE PURPOSES OF THE BOARD AT RS.64,80,62,360 (RS.30,27,76,028 + RS.34,52,86,332/-). AGGRIEVED, THE ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 9.2 THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THA T THE LD. CIT(A) HAS ERRED IN ASSESSING THE INCOME UNDER THE PROVISIONS OF SECTION 11(1) OF THE ACT AS WELL AS SECTION 11(4) OF THE ACT, WHICH IS COMPLETE LY BAD IN LAW AS THE INCOME CAN BE ASSESSED ONLY ONCE AND NOT TWICE. ON THE OT HER HAND, LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE LD. CIT(A ). 9.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE LD. C IT(A) WHO HAS ENHANCED THE ASSESSED INCOME FROM RS.38,79,23,874/- TO RS.64,80, 62,360/- BY MERGING THE INCOME U/S 11(1) OF THE ACT AND 11(4) OF THE ACT. BEFORE GOING FURTHER, LET US EXAMINE THE PROVISIONS OF SECTION 11(1) AND 11(4) O F THE ACT, WHICH READS AS UNDER:- SECTION 11(1) OF THE ACT:- 11. (1) SUBJECT TO THE PROVISIONS OF SECTIONS 60 TO 63 , THE FOLLOWING INCOME SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT OF THE INCOME (A) INCOME DERIVED FROM PROPERTY HELD UNDER TRUST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES, TO THE EXTENT TO WHICH SUCH INC OME IS APPLIED TO SUCH PURPOSES IN INDIA; AND, WHERE ANY SUCH INCOME IS AC CUMULATED OR SET APART FOR APPLICATION TO SUCH PURPOSES IN INDIA, TO THE EXTEN T TO WHICH THE INCOME SO ACCUMULATED OR SET APART IS NOT IN EXCESS OF FIFTEE N PER CENT OF THE INCOME FROM SUCH PROPERTY; (B) INCOME DERIVED FROM PROPERTY HELD UNDER TRUST IN PART ONLY FOR SUCH PURPOSES, THE TRUST HAVING BEEN CREATED BEFORE THE COMMENCEMENT OF THIS ACT, TO THE EXTENT TO WHICH SUCH INCOME IS APPLIED TO SUCH PURPOSES IN INDIA; AND, WHERE ANY SUCH INCOME IS FINALLY SET APART FOR APPLICATIO N TO SUCH PURPOSES IN INDIA, TO THE EXTENT TO WHICH THE INCOME SO SET APART IS NOT IN EXCESS OF FIFTEEN PER CENT OF THE INCOME FROM SUCH PROPERTY; (C) INCOME DERIVED FROM PROPERTY HELD UNDER TRUST ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 17 (I) CREATED ON OR AFTER THE 1ST DAY OF APRIL, 19 52, FOR A CHARITABLE PURPOSE WHICH TENDS TO PROMOTE INTERNATIONAL WELFARE IN WHICH IND IA IS INTERESTED, TO THE EXTENT TO WHICH SUCH INCOME IS APPLIED TO SUCH PURPOSES OU TSIDE INDIA, AND (II) FOR CHARITABLE OR RELIGIOUS PURPOSES, CREATE D BEFORE THE 1ST DAY OF APRIL, 1952, TO THE EXTENT TO WHICH SUCH INCOME IS APPLIED TO SUCH PURPOSES OUTSIDE INDIA: SECTION 11(4) OF THE ACT: (4) FOR THE PURPOSES OF THIS SECTION 'PROPERTY HEL D UNDER TRUST' INCLUDES A BUSINESS UNDERTAKING SO HELD, AND WHERE A CLAIM IS MADE THAT THE INCOME OF ANY SUCH UNDERTAKING SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF THE PERSONS IN RECEIPT THEREOF, THE ASSESSING OFFICER SHALL HAVE P OWER TO DETERMINE THE INCOME OF SUCH UNDERTAKING IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT RELATING TO ASSESSMENT; AND WHERE ANY INCOME SO DETERMINED IS I N EXCESS OF THE INCOME AS SHOWN IN THE ACCOUNTS OF THE UNDERTAKING, SUCH EXCE SS SHALL BE DEEMED TO BE APPLIED TO PURPOSES OTHER THAN CHARITABLE OR RELIGI OUS PURPOSES. FROM GOING THROUGH THE ABOVE REFERRED PROVISIONS O F SECTION 11(1) AND SECTION 11(4) OF THE ACT, WE ARE ABLE TO UNDERSTAND THAT SECTION 11(4) OF THE ACT IS APPLICABLE WHEN THE PROPERTY HELD UNDER TRUST INCLUDES A BUSINESS UNDERTAKING SO HELD AND THE ASSESSING OFFICER HAVE POWER TO DETERMINE THE INCOME OF SUCH BUSINESS UNDERTAKING IN ACCORDANCE W ITH THE PROVISIONS OF THE ACT AND WHERE ANY SUCH INCOME SO DETERMINED IS IN E XCESS OF INCOME AS SHOWN IN THE ACCOUNTS OF THE UNDERTAKING, THEN SUCH EXCES S INCOME SHALL BE DEEMED TO HAVE BEEN NOT APPLIED FOR CHARITABLE PURPOSES. HOWE VER, IN THE CASE OF THE ASSESSEE, WE HAVE ALREADY DECIDED THAT THE ASSESSEE IS CARRYING ON CHARITABLE ACTIVITIES WITHOUT PROFIT MOTIVE AND THE INCOME IS TO BE CALCULATED AS PER THE PROVISIONS OF SECTION 11(1) OF THE ACT AND THEREFOR E, LD. CIT(A) HAS ERRED IN CALCULATING THE INCOME U/S 11(1) AND 11(4) OF THE A CT AND THEREFORE, IN OUR VIEW, SUBJECT TO OUR ADJUDICATION OF OTHER GROUNDS OF THI S APPEAL, THE INCOME OF THE ASSESSEE IS TO BE ASSESSED AS PER THE PROVISIONS OF SECTION 11(1) OF THE ACT. ACCORDINGLY, THIS GROUND OF THE ASSESSEE IS ALSO AL LOWED. 10. SUBSTANTIVE GROUND NO.5 READS AS UNDER:- ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 18 5. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER OF RS.12,92,00,000/- AS NOTIONAL INCOME ON ACCOUNT OF PREMIUM OF ALANG PLOTS. 10.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE LD. ASSESSING OFFICER OBSERVED THAT THE ASSESSEE RECEIVED RS.131 CRORES A S PREMIUM ON ALLOTMENT OF PLOTS AT ALANG AND WATERFRONT/JETTY WHICH WAS REQUI RED TO BE RECOGNIZED AS REVENUE FOR A PERIOD OF 10 YEARS FOR THE PREMIUM RE CEIVED ON PLOTS AT ALANG AND TO BE RECOGNIZED AS REVENUE FOR A PERIOD OF 20- 25 YEARS FOR THE PREMIUM ON REMAINING PLOTS. WHILE GOING THROUGH THE ANNUAL RE PORT OF THE YEAR 2002-03, THE LD. ASSESSING OFFICER FURTHER OBSERVED THAT AG( AUDIT) HAD WORKED OUT THE INCOME ON REVENUE RECOGNITION OF THE PREMIUM AS RS. 12.92 CRORES IN RESPECT OF PLOTS AT ALANG AND WATERFRONT AT ROZI PIER, BEDI. DUE TO LACK OF INFORMATION FROM THE SIDE OF THE ASSESSEE, THE LD. ASSESSING OF FICER WENT AHEAD TO MAKE ADDITION OF RS.12,92,00,000/- ON ACCOUNT OF NON-REC OGNITION OF PREMIUM ON PLOTS AT ALANG. THEREAFTER, DURING THE COURSE OF A PPELLATE PROCEEDINGS BEFORE THE LD. CIT(A), THE ASSESSEE MENTIONED THAT ACCOUNT S OF THE ASSESSEE WERE BEING MAINTAINED ON CASH BASIS UPTO FINANCIAL YEAR 2001-0 2 AND THE IMPUGNED PREMIUM AMOUNT ON ALLOTMENT OF PLOTS WERE RECEIVED IN PREVIOUS YEARS AND NO AMOUNT HAS BEEN RECEIVED IN THE YEAR UNDER APPEAL A ND UPTO 31.03.2002 THE INCOME OF THE ASSESSEE WAS EXEMPT AS LOCAL AUTHORIT Y U/S 10(20) OF THE INCOME- TAX ACT; ALL THE PREMIUM RECEIVED BEFORE THIS DATE WERE ALSO EXEMPT FROM TAX AND FURTHER, PREMIUM RECEIVED IS AN UPFRONT PAYMENT OF CAPITAL IN NATURE AND WAS ACCOUNTED FOR AS SUCH IN THE YEAR OF RECEIPT. HOWEVER, LD. CIT(A) CONFIRMED THE ADDITION BY OBSERVING THAT AS THE APP ELLANT IS NOT REFUNDING BACK THE PREMIUM AT THE END OF THE LEASE PERIOD SO AS TO DRAW AN ACCOUNT OF INCOMINGS OR OUTGOING TO ARGUE ABOUT THE DEPLETION ON THIS ACCOUNT. AGGRIEVED THE ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 10.2 THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED TH AT THE APPELLANT-BOARD WAS MAINTAINING ITS BOOKS OF ACCOUNTS ON CASH BASIS UPTO FINANCIAL YEAR 2001-02 ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 19 AND THE RECEIPT OF THE IMPUGNED PREMIUM COMMENCED D URING THE FINANCIAL YEAR 1994-95 AND AS ON 31.03.2002, THE SAME AGGREGA TED TO RS.131.18 CRORES AND THE SAID COMMENT OF AG (AUDIT), WHICH HAS BEEN RELI ED ON HEAVILY BY THE LD. ASSESSING OFFICER AND FURTHER LD. CIT(A), HAS APPEA RED ONLY FOR THE FINANCIAL YEAR 2002-03 EVEN THOUGH THE AMOUNT OF PREMIUM WAS RECEIVED SINCE 1994-95 AND THEY HAD NEVER RAISED THE ISSUE OF SPREADING OV ER AS THE ACCOUNT HAVE BEEN MAINTAINED ON CASH BASIS. LD. AUTHORIZED REPRESENT ATIVE FURTHER SUBMITTED THAT THE SAID PREMIUM RECEIPTS WHICH WERE DULY ACCO UNTED FOR AS RESERVES/CAPITAL RECEIPT AT THE TIME OF RECEIPT, TH ERE WAS NO AMOUNT OUT OF THESE PREMIUM RECEIPTS WHICH CAN BE CALLED RECEIPTS OF PR EVIOUS YEAR AND IT IS WORTHWHILE TO MENTION THAT UP TO 31.03.2002 THE APP ELLANT-BOARD WAS COVERED UNDER THE PROVISIONS OF SECTION 10(20) OF THE INCOM E-TAX ACT AS THE LOCAL AUTHORITY AND COMPLETE INCOME WAS EXEMPT AND CERTAI NLY AS THE ACCOUNTS HAVE BEEN PREPARED ON CASH BASIS, THE IMPUGNED PREMIUM W AS SHOWN AS CAPITAL RECEIPT IN THE PREVIOUS YEAR. LD. DEPARTMENTAL REP RESENTATIVE, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES . 10.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL ON RECORD. THE ISSUE ARISING IN THIS GROUND HAS RAISED PURSUAN T TO REPORT OF AG(AUDIT), RAJKOT RELATING TO PREMIUM GRANT AND CAPITAL RECEI PT FOR BEING NOT RECOGNIZED AS REVENUE SO FAR AND THE SUGGESTION WAS MADE TO SPREAD THE PREMIUM FOR 25 YEARS ON ACCOUNT OF WATERFRONT/JETTY AND 10 YEARS IN THE CASE OF ALANG. IN OUR VIEW, THE ABOVE NOTE OF AG (AUDIT) R EFERS TO THE PRESENTATION OF THE FINANCIAL STATEMENTS SO THAT THE TRUE INCOME GE TS REFLECTED IN THE YEAR UNDER CONSIDERATION, BECAUSE THE IMPUGNED PREMIUM OF RS.1 31 CRORES WAS NOT PERTAINING TO ONE SPECIFIC YEAR BUT WAS FOR MANY YE ARS AND THE SUGGESTION WAS MADE TO BIFURCATE THE AMOUNT ON THE BASIS OF LEASE PERIOD. IT IS WORTHWHILE TO MENTION HERE THAT WE HAVE ALREADY HELD THAT THE ASS ESSEE IS NOT CARRYING ON ANY BUSINESS ACTIVITY, RATHER CARRYING ON CHARITABLE AC TIVITIES IN THE FORM OF PROVIDING SERVICES RELATING TO GENERAL PUBLIC UTILI TY WHICH IN THE CASE BEFORE US ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 20 RELATES TO MAINTAINING OF PORTS IN THE STATE OF GUJ ARAT. WE FURTHER OBSERVE THAT BOTH THE LOWER AUTHORITIES HAVE NOT APPRECIATED THE FACT THAT THE ACCOUNTS OF THE ASSESSEE WERE BEING MAINTAINED ON CASH BASIS UPTO F INANCIAL YEAR 2001-02 AND CERTAINLY IN THE CASE OF THE ASSESSEE WHO CARRIES O N CASH BASIS OF ACCOUNTING OF WHAT IS RECEIVED IN A YEAR HAS TO BE ACCOUNTED FOR AND THERE IS NO CONCEPT OF BIFURCATING OR APPORTIONING ANY ADVANCE PREMIUM REC EIVED. FURTHER, IT IS ALSO UNDISPUTED FACT THAT THE APPELLANT-BOARD WAS COVERE D UNDER THE PROVISIONS OF SECTION 10(20A) OF THE ACT AS A LOCAL AUTHORITY UPT O ASSESSMENT YEAR 2002-03 AND THE INCOME WAS EXEMPT UNDER THIS SECTION AND CE RTAINLY WHATEVER AMOUNT WHICH HAVE BEEN RECEIVED PRIOR TO 01.04.2002 GETS C OVERED THEREIN. THEREFORE, IN OUR VIEW, NO ADDITION WAS CALLED FOR OF RS.12,92 ,00,000/- ON ACCOUNT OF REVENUE RECOGNITION OF THE PREMIUM RECEIVED ON ALLO TMENT OF PLOTS BY WAY OF SPREADING THE REVENUE FOR A PERIOD OF 10/20-25 YEAR S ON THE BASIS OF AG(AUDIT) REPORT. THUS, THIS GROUND OF ASSESSEES APPEAL IS A LSO ALLOWED. 11. NOW WE TAKE-UP SUBSTANTIVE GROUND NO.6, WHICH R EADS AS UNDER:- THE LD. CIT(A) HAS ERRED IN GRANTING DEDUCTION FOR ACCUMULATION U/S 11(1) OF THE ACT ONLY ON NET SURPLUS AND NOT ON ITS GROSS RECEIP TS. 11.1 THE ISSUE ARISING IN THIS GROUND IS THAT THE L D. CIT(A) HAS RESTRICTED THE BENEFIT OF 15% IN TERMS OF SECTION 11(1A) OF THE AC T ON NET INCOME INSTEAD OF GROSS RECEIPTS. WHILE ARGUING THIS GROUND BEFORE T HE TRIBUNAL, THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE GROSS INCOME OF THE APPELLANT- BOARD FOR THE YEAR UNDER APPEAL IS RS.221.19 CRORES AND AS MENTIONED IN SECTION 11(1)(A) OF THE ACT IF AN ASSESSEE CAN ACCUMULATE O R SET APART THE INCOME IN EXCESS OF 15% OF THE INCOME FROM SUCH PROFIT, THEN THE EXCESS SHALL BE TREATED AS INCOME NOT ELIGIBLE FOR DEDUCTION U/S 11(1A) AND TH E AMOUNT IS TO BE CALCULATED @ 15% OF THE GROSS INCOME OF THE ASSESSEE, I.E., 22 1.19 CRORES WHICH COMES TO RS.33.18 CRORES; WHEREAS BOTH THE LOWER AUTHORITIES WERE OF THE VIEW THAT 15% IS TO BE CALCULATED ON THE NET SURPLUS FOR THE YEAR WH ICH IN THE CASE OF THE ASSESSEE WAS RS.64.96 CRORES AND 15% OF THE SAME COMES TO RS .9.75 CRORES. LD. ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 21 AUTHORIZED REPRESENTATIVE REFERRED AND RELIED UPON THE DECISION OF HONBLE APEX COURT IN THE CASE OF CIT VS. PROGRAMME FOR COM MUNITY ORGANIZATION, [2001] 248 ITR 0001. ON THE CONTRARY, LD. DEPARTME NTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 11.2 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL ON RECORD. THE ONLY ISSUE TO BE EXAMINED HERE IS THAT WHILE DE ALING WITH THE PROVISIONS OF SECTION 11(1A) IN ORDER TO ARRIVE AT INCOME WHICH C AN BE ACCUMULATED UPTO 15%, THEN THE AMOUNT ON WHICH THIS 15% HAS TO BE CA LCULATED IS REFERRED TO THE GROSS INCOME OF THE APPELLANT-TRUST FOR THE YEAR UN DER APPEAL OR THE NET INCOME, I.E., AFTER DEDUCTING THE APPLICATION OF INCOME FRO M THE GROSS INCOME RECEIVED DURING THE YEAR. 11.3 WE FIND THAT THE HONBLE APEX COURT HAS DEALT WITH THIS ISSUE IN THE CASE OF CIT VS. PROGRAMME FOR COMMUNITY ORGANIZATION (SUPRA ) AND OBSERVED AS UNDER:- HAVING REGARD TO THE PLAN LANGUAGE OF THE ABOVE PR OVISIONS, IT IS CLEAR THAT A CHARITABLE OR RELIGIOUS TRUST IS ENTITLED TO ACCUMU LATE TWENTY-FIVE PER CENT OF ITS INCOME DERIVED FROM PROPERTY HELD UNDER TRUST. FOR THE PRESENT PURPOSE, THE DONATIONS, THE ASSESSEE RECEIVED, IN THE SUM OF RS. 2,57,376 WOULD CONSTITUTE ITS PROPERTY AND IT WAS ENTITLED TO ACCUMULATE TWENTY-F IVE PER CENT THEREOUT. IT WAS UNCLEAR ON WHAT BASIS THE REVENUE CONTENDED THAT IT WAS ENTITLED TO ACCUMULATE ONLY TWENTY-FIVE PER CENT OF RS.87,010. FOR THE AF ORESAID REASONS, THE CIVIL APPEAL WAS DISMISSED. FROM GOING THROUGH THE DECISION OF THE HONBLE APE X COURT IN THE CASE OF CIT VS. PROGRAMME FOR COMMUNITY ORGANIZATION (SUPRA ), IT IS CRYSTAL CLEAR THAT CALCULATION OF 15% AS MENTIONED IN PROVISIONS OF SE CTION 11(1A) HAVE TO BE APPLIED ON THE GROSS INCOME OF THE ASSESSEE AND NOT THE NET SURPLUS. THEREFORE, IN OUR VIEW, IN THE CASE OF THE ASSESSEE, 15% HAS T O BE CALCULATED ON GROSS INCOME FOR THE YEAR, I.E., RS.221.19 CRORES AND NOT ON THE NET SURPLUS OF RS.64.96 CRORES. THE ISSUE IS, THEREFORE, DECIDED IN FAVOUR OF THE ASSESSEE. ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 22 12. NEXT, WE DEAL WITH THE SUBSTANTIVE GROUND NOS. 7 & 8, WHICH AS UNDER:- 7 .THE LD. CIT(A) HAS ERRED IN NOT ALLOWING THE DEDUC TION IN RELATION TO INCREASE IN THE FIXED ASSETS BEING APPLICATION OF INCOME AMO UNTING TO RS.20,68,73,986/-. 8. THE LD. CIT(A) HAS ERRED IN FRAMING ASSESSMENT U/S 11(1) WITHOUT GRANTING DEPRECIATION AMOUNTING TO RS.36,86,34,716/-. 12.1 AS REGARDS THE CLAIM OF DEPRECIATION AS PER INCOME-TAX ACT, WE OBSERVE THAT WHILE FRAMING THE ASSESSMENT ORDER, THE LD. AS SESSING OFFICER DETERMINED THE INCOME UNDER THE PROVISIONS OF SECTION 11(1) OF THE ACT BY ADDING BACK THE DEPRECIATION CLAIM IN THE BOOKS OF ACCOUNTS AT RS.9 ,83,87,745/- AND ALLOWING THE APPLICATION OF INCOME TOWARDS FIXED ASSETS AT RS.52 ,67,27,832/- AND ALSO AGAIN GIVING CREDIT TOWARDS APPLICATION OF INCOME BY ALLO WING DEPRECIATION AS PER BOOKS AT RS.9,83,87,745/-; WHEREAS WHILE DETERMININ G INCOME AS PER THE PROVISIONS OF SECTION 11(4) OF THE INCOME-TAX ACT, TREATING ASSESSEE-CHARITABLE- TRUST, AS A BUSINESS UNDERTAKING, FIRSTLY ADDED THE DEPRECIATION AS PER BOOKS AT RS.9,83,87,745/- TO THE NET PROFIT SHOWN IN THE ANN UAL AUDIT REPORT AND THEN ALLOWING DEDUCTION OF THE DEPRECIATION AS PER INCOM E-TAX ACT AT RS.42,28,21,795/. ON THE OTHER HAND, LD. CIT(A), W HILE FRAMING HIS APPELLATE ORDER, AGAIN CALCULATED THE INCOME U/S 11(1) OF THE ACT AND U/S. 11(4) OF THE ACT. LD. CIT(A) AND WHILE DETERMINING THE INCOME U /S 11(1) OF THE ACT, DID NOT ADD BACK THE DEPRECIATION CLAIM IN THE BOOKS OF ACC OUNTS AND SIMPLY ALLOWED THE ADDITION TO FIXED ASSETS DURING THE YEAR AT RS. 20,68,73,986/-. WHEREAS, WHILE DETERMINING THE INCOME U/S 11(4) OF THE ACT, THE LD. CIT(A) FIRSTLY ADDED DEPRECATION AS PER BOOKS AT RS.9,83,87,745/- AND GA VE DEDUCTION TO THE DEPRECIATION AS PER INCOME-TAX ACT CALCULATED BY TH E LD. ASSESSING OFFICER AT RS.36,86,34,716/-. 12.2 NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIB UNAL AGAINST THE ORDER OF THE LD. CIT(A) FOR NOT GRANTING DEDUCTION FOR DEPRECIAT ION AS PER INCOME-TAX ACT AT RS.36,86,34,716/- WHILE DETERMINING THE INCOME U/S 11(1) OF THE ACT. HERE, WE WOULD LIKE TO MENTION THAT WE HAVE NO INFORMATION O N RECORD ABOUT ANY APPEAL ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 23 BEING FILED BY THE REVENUE FOR THE ASSESSMENT YEAR 2003-04 AGAINST THE ORDER OF THE LD. CIT(A) DATED 18.08.2009. FROM GOING THROUG H THE ORDERS OF THE LOWER AUTHORITIES, WE OBSERVE THAT THE ASSESSEE HAS SHOWN DEPRECIATION AS PER BOOKS OF ACCOUNTS CALCULATED ON STRAIGHT-LINE METHOD AT R S.9,83,87,745/- AND THE ASSESSEE HAS CALCULATED DEPRECIATION AS PER INCOME- TAX ACT AT RS.52,67,27,832/-. WE ALSO OBSERVE THAT THE LD. ASSESSING OFFICER WHIL E FRAMING THE ASSESSMENT ORDER U/S 143(3) OF THE ACT HAS ALLOWED DEPRECIATIO N AS PER INCOME-TAX ACT AT RS.42,28,21,795/- AND HAS ALLOWED THE SAME WHILE C ALCULATING INCOME U/S 11(4) OF THE ACT AND THEREAFTER, THE LD. ASSESSING OFFICE R REVISED THE FIGURE OF DEPRECIATION AS PER INCOME-TAX ACT VIDE HIS LETTER DATED 28.12.2007, COMMUNICATED TO LD. CIT(A) AND THE REVISED FIGURE O F DEPRECIATION SHOWN THEREIN WAS AT RS.36,86,34,716/-. THE LD. CIT(A), WHILE FRAMING HIS APPELLATE ORDER, HAS ALLOWED THE DEPRECIATION AS PER INCOME-T AX ACT AT RS.36,86,34,716/- WHILE COMPUTING INCOME OF APPELLANT-TRUST HAS BUSIN ESS U/S 11(4) OF THE ACT. FROM OUR ABOVE OBSERVATION, ONE FACT WHICH EMANATES OUT CLEARLY IS THAT FIGURE OF DEPRECIATION AS PER INCOME-TAX ACT HAS CHANGED F REQUENTLY AND THERE IS A VARIATION IN THE FINAL FIGURE DETERMINED BY THE ASS ESSEE AS WELL AS DEPARTMENT ABOUT THE DEPRECIATION CALCULATED AS PER INCOME-TAX ACT. 12.3 AS REGARDS THE ALLOWABILITY OF ADDITION TO F IXED ASSETS AT RS.20,68,73,986/- AS APPLICATION OF INCOME, THERE R EMAINS NO DISPUTE BECAUSE THE LD. CIT(A), WHILE DETERMINING THE INCOME U/S 11 (1) OF THE ACT, HAS HIMSELF ALLOWED THE ADDITION TO FIXED ASSETS AT RS.20,68,73 ,986/- AS DEDUCTION TOWARDS APPLICATION OF INCOME AND THEREFORE, THIS SUBSTANTI VE GROUND NEEDS NO FURTHER ADJUDICATION ON THIS GROUND RELATING TO ALLOWABILIT Y OF DEDUCTION IN RELATION TO INCREASE IN THE FIXED ASSETS BEING APPLICATION OF I NCOME AMOUNTING TO RS.20,68,73,968/-, AS IT HAS ALREADY DECIDED IN FAV OUR OF THE ASSESSEE BY LD. CIT(A) AND THEREFORE NO INTERFERENCE IS CALLED FOR IN THE LD. CIT(A)S ORDER FOR THIS GROUND. ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 24 12.4 NOW THE NEXT ISSUE WHICH WE HAVE TO EXAMINE IS WHETHER THE ASSESSEE IS ELIGIBLE FOR DEDUCTION OF DEPRECIATION AS PER INCOM E-TAX ACT WHILE DETERMINING THE INCOME UNDER THE PROVISIONS OF SECTION 11(1) OF THE ACT. IN THIS REGARD IT WILL BE APPROPRIATE TO REFER THE PROVISIONS OF SECT ION 11(1) OF THE ACT AND FURTHER FOR THE SAKE OF READY REFERENCE, SECTION 11(1) IS R EPRODUCED HEREUNDER:- 11. (1) SUBJECT TO THE PROVISIONS OF SECTIONS 60 TO 63 , THE FOLLOWING INCOME SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PERSON IN RECEIPT OF THE INCOME (A) INCOME DERIVED FROM PROPERTY HELD UNDER TRUST WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES, TO THE EXTENT TO WHICH SUCH INC OME IS APPLIED TO SUCH PURPOSES IN INDIA; AND, WHERE ANY SUCH INCOME IS AC CUMULATED OR SET APART FOR APPLICATION TO SUCH PURPOSES IN INDIA, TO THE EXTEN T TO WHICH THE INCOME SO ACCUMULATED OR SET APART IS NOT IN EXCESS OF FIFTEE N PER CENT OF THE INCOME FROM SUCH PROPERTY; (B) INCOME DERIVED FROM PROPERTY HELD UNDER TRUST IN PART ONLY FOR SUCH PURPOSES, THE TRUST HAVING BEEN CREATED BEFORE THE COMMENCEMENT OF THIS ACT, TO THE EXTENT TO WHICH SUCH INCOME IS APPLIED TO SUCH PURPOSES IN INDIA; AND, WHERE ANY SUCH INCOME IS FINALLY SET APART FOR APPLICATIO N TO SUCH PURPOSES IN INDIA, TO THE EXTENT TO WHICH THE INCOME SO SET APART IS NOT IN EXCESS OF FIFTEEN PER CENT OF THE INCOME FROM SUCH PROPERTY; (C) INCOME DERIVED FROM PROPERTY HELD UNDER TRUST (I) CREATED ON OR AFTER THE 1ST DAY OF APRIL, 19 52, FOR A CHARITABLE PURPOSE WHICH TENDS TO PROMOTE INTERNATIONAL WELFARE IN WHICH IND IA IS INTERESTED, TO THE EXTENT TO WHICH SUCH INCOME IS APPLIED TO SUCH PURPOSES OU TSIDE INDIA, AND (II) FOR CHARITABLE OR RELIGIOUS PURPOSES, CREATE D BEFORE THE 1ST DAY OF APRIL, 1952, TO THE EXTENT TO WHICH SUCH INCOME IS APPLIED TO SUCH PURPOSES OUTSIDE INDIA: FROM GOING THROUGH THE AFORESAID PROVISIONS OF SEC TION 11(1) OF THE ACT, IT MAY BE SEEN THAT INCOME DERIVED FROM PROPERTY HELD UNDER A TRUST, WHOLLY FOR CHARITABLE OR RELIGIOUS PURPOSES, WILL BE EXEMPT TO THE EXTENT TO WHICH SUCH INCOME IS APPLIED TOWARDS OBJECTS OF THE TRUST IN I NDIA AND, WHERE SUCH INCOME IS ACCUMULATED OR SET APART FOR APPLICATION TOWARDS SUCH OBJECTS IN INDIA, THEN THE SAME WILL ALSO BE EXEMPT TO THE EXTENT TO WHICH THE INCOME SO ACCUMULATED OR SET APART, PROVIDED THE SAME IS NOT IN EXCESS OF 15% OF SUCH INCOME FROM THE ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 25 PROPERTY. BESIDES, IN THIS CONNECTION, THE PROVISI ONS OF SECTION 11(2) AS WELL AS SECTION 11 (3) OF THE ACT ARE ALSO RELEVANT. IT IS ALSO QUITE CLEAR THAT THE SCHEME OF TAXATION OF CHARTABLE/RELIGIOUS TRUST IS QUITE D IFFERENT FROM THE TAXATION OF OTHER TAXABLE ENTITIES UNDER THE ACT, BECAUSE THE A PPLICATION OF INCOME AND/OR THE ACCUMULATION OF SUCH INCOME FOR THE PURPOSES OF THE OBJECTS OF THE TRUST, IS RELEVANT. THE TERM USED IN SECTION 11(1) OF THE AC T, THE INCOME AND NOT TOTAL INCOME , WHICH IS APPLICABLE FOR THE PURPOSES OF TAXATION OF OTHER TAXATION OF OTHER TAXABLE ENTITIES UNDER THE ACT. THE WORD IN COME SHOULD BE UNDERSTOOD IN ITS COMMERCIAL SENSE, I.E., BOOK INCOME, WHICH N ECESSARILY ENVISAGES DEDUCTION OF DEPRECIATION ON THE ASSETS OF THE TRUS T. IN THE PRESENT CONTEXT, IT HAS TO BE CLEARLY UNDERSTOOD IF THE DEPRECIATION IS NOT ALLOWED AS A NECESSARY DEDUCTION IN COMPUTING THE INCOME OF THE CHARITABLE /RELIGIOUS TRUSTS, THEN THERE WOULD BE NO WAY TO PRESERVE THE CORPUS OF THE TRUST AND THEREFORE, A CHARITABLE/RELIGIOUS TRUST IS ENTITLED TO DEPRECIAT ION IN RESPECT OF THE ASSETS OWNED BY IT. 12.5 THIS VIEW GETS FURTHER SUPPORTED BY THE DECISI ON OF HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. RAIPUR P ALLOTTINE SOCIETY, REPORTED IN [1989] 180 ITR 579 (MP), WHEREIN IT HAS HELD THAT T HE CHARITABLE TRUST IS ENTITLED TO DEPRECIATION IN RESPECT OF ASSET OWNED BY IT. I T WAS FURTHER HELD THAT DEPRECIATION IS THE EXHAUSTION OF THE EFFECTIVE LIF E OF A FIXED ASSET OWING TO USE OR OBSOLESCENCE. IT MAY BE COMPUTED AS THAT PART OF THE COST OF THE ASSET WHICH WILL NOT BE RECOVERED WHEN THE ASSET IS FINALLY PUT OUT OF USE. THE OBJECT OF PROVIDING FOR DEPRECIATION IS TO SPREAD THE EXPEND ITURE INCURRED IN ACQUIRING THE ASSET OVER ITS EFFECTIVE LIFETIME AND THE AMOUN T OF PROVISION MADE IN RESPECT OF AN ACCOUNTING PERIOD IS INTENDED TO REPRESENT TH E PROPORTION OF SUCH EXPENDITURE WHICH HAS EXPIRED DURING THAT PERIOD. I F DEPRECIATION IS NOT ALLOWED AS A NECESSARY DEDUCTION IN COMPUTING THE I NCOME OF A CHARITABLE TRUST, THEN THERE WOULD BE NO WAY TO PRESERVE THE CORPUS O F THE TRUST. A CHARITABLE TRUST IS, THEREFORE, ENTITLED TO DEPRECIATION IN RE SPECT OF THE ASSETS OWNED BY IT. ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 26 12.6 WE FURTHER OBSERVE THAT THE HONBLE GUJARAT HI GH COURT IN THE CASE OF CIT VS. SHETH MANILAL RANCHHODDAS VISHRAM BHAVAN TR UST, REPORTED IN [1992] 198 ITR 598 (GUJ), IT WAS HELD THAT THE INCOME FROM THE PROPERTIES HELD UNDER TRUST HAS TO BE ARRIVED AT IN THE NORMAL COMMERCIAL MANNER WITHOUT CLASSIFICATION UNDER THE VARIOUS HEADS SET OUT IN S ECTION 14 OF THE INCOME-TAX ACT. THE EXPRESSION INCOME HAS TO BE UNDERSTOOD I N THE POPULAR OR GENERAL SENSE AND NOT IN THE SENSE IN WHICH THE INCOME IS A RRIVED AT FOR THE PURPOSE OF ASSESSMENT TO TAX BY APPLICATION OF SOME ARTIFICIAL PROVISIONS EITHER GIVING OR DENYING DEDUCTION. THE COMPUTATION UNDER THE DIFFER ENT CATEGORIES OR HEADS ARISES ONLY FOR THE PURPOSES OF ASCERTAINING THE TO TAL INCOME FOR THE PURPOSES OF CHARGE. THOSE PROVISIONS CANNOT BE INTRODUCED TO FI ND OUT WHAT THE INCOME DERIVED FROM THE PROPERTY HELD UNDER TRUST TO BE EX CLUDED FROM THE TOTAL INCOME IS, FOR THE PURPOSE OF THE EXEMPTIONS UNDER CHAPTER III. THE AMOUNT OF DEPRECIATION DEBITED TO THE ACCOUNTS OF THE CHARITA BLE INSTITUTION HAS TO BE DEDUCTED TO ARRIVE AT THE INCOME AVAILABLE FOR APPL ICATION TO CHARITABLE AND RELIGIOUS PURPOSES. 12.7 RESPECTFULLY RELYING ON THE DECISION OF THE HO NBLE MADHYA PRADESH HIGH COURT IN THE CASE OF RAIPUR PALLOTTINE SOCIETY (SUPRA) AND DECISION OF GUJARAT HIGH COURT IN THE CASE SHETH MANILAL RANCHH ODDAS VISHRAM BHAVAN TRUST (SUPRA), WE ARE FOR THE CONSIDERED VIEW THAT THE ASSESSEE IS ENTITLED TO DEPRECATION AS PER THE INCOME-TAX ACT AS APPLICATIO N OF INCOME WHILE DETERMINING INCOME U/S 11(1) OF THE ACT. HOWEVER, IN THE PRESENT CASE, DUE TO THE VARIATION OF FIGURES OF DEPRECIATION AS PER INC OME-TAX ACT IN BETWEEN THE ASSESSEE AS WELL AS DEPARTMENT, IT WILL BE APPROPRI ATE TO SET ASIDE THE MATTER TO THE FILE OF THE LD. ASSESSING OFFICER FOR THE LIMIT ED PURPOSE OF CALCULATING THE CORRECT AMOUNT OF DEPRECATION AS PER INCOME-TAX ACT FOR THE YEAR UNDER APPEAL. IT IS NEEDLESS TO MENTION THAT PROPER OPPORTUNITY O F BEING HEARD TO BE GIVEN TO THE ASSESSEE AND BOTH THE PARTIES SHOULD ARRIVE AT A CONSONANCE ON THE CORRECT ITA NO. 2933/AHD/2009 GUJARAT MARITIME BOARD VS. ACIT AY : 2003-04 - 27 FIGURE OF DEPRECIATION AS PER INCOME-TAX ACT AND TH E SAME SHOULD BE ALLOWED AS APPLICATION OF INCOME FOR THE PURPOSES OF DETERMINI NG INCOME U/S 11(1) OF THE ACT. ACCORDINGLY, THIS GROUND OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED FOR STATISTICAL PURPOSES AS INDICATED ABOVE. ORDER PRONOUNCED IN THE COURT ON 27 TH APRIL, 2016 AT AHMEDABAD. SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER AHMEDABAD; DATED, 27/04/2016 **BT !&''()(*'/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ++ ' ,' / CONCERNED CIT 4. ,' ) ( / THE CIT(A)- 5. (/0&'& , , /DR,ITAT, AHMEDABAD, 6. 0456 / GUARD FILE. / BY ORDER, TRUE COPY + (ASSTT.REGISTRAR) ITAT, AHMEDABAD