The ACIT, GNR Circle, Gandhinagar V. Gujarat Council of Science City, Ahmedabad

ITA 3096/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89607 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 15-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 07-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BIPIN J SHAH
• Keywords: Capital expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI KUL BHARA T, J.M.) I.T. A. NO. 3096/AHD/2011 (ASSESS MENT YEAR: 2008-09) THE A.C.I.T., GNR CIRCLE- GANDHINAGAR V/S GUJARAT COUNCIL OF SCIENCE CITY, NR. SOLA-SANTEJ ROAD, SOLA, AHMEDABAD 380060 (APPELLANT) (RESPONDENT) PAN: AAABG0071B APPELLANT BY : SHRI NIMESH YADAV, SR. D.R . RESPONDENT BY : SHRI BIPIN J. SHAH, A.R. ( )/ ORDER DATE OF HEARING : 15-06-201 5 DATE OF PRONOUNCEMENT : 19 -06-2015 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF CIT(A), GANDHINAGAR, GUJARAT DATED 02.09.2011 FOR A.Y. 2008 -09. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS A COMPANY REGISTERED UNDER THE SOCIETIE S REGISTRATION ACT AND THE PRINCIPAL OBJECTIVE OF THE ASSESSEE IS TO PROMO TE SCIENCE AND TECHNOLOGY AND TO UNDERTAKE AND ENCOURAGE RESEARCH AND TRAININ G IN VARIOUS SCIENCE ACTIVITIES. ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 2008-09 ON 29.09.2008 DECLARING TOTAL INCOME AT RS. NIL. THE C ASE WAS SELECTED FOR ITA NO 3096 /AHD/2011 . A.Y. 2008-09 2 SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED U NDER SECTION 143(3) VIDE ORDER DATED 22.11.2010 AND WHILE FRAMING THE ASSESS MENT, THE GRANT RECEIVED FROM GOVERNMENT OF GUJARAT AND CONTRIBUTION FROM GS DMA RECEIVED BY THE ASSESSEE WAS CONSIDERED TO BE INCOME BY THE A.O. AG GRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE LD. CIT (A) WHO VIDE ORDER DATED 02.09.2011 DECIDED THE ISSUE IN FAVOUR OF THE ASSES SEE BY HOLDING AS UNDER:- 3.4. THE MATTER HAS BEEN CONSIDERED. SIMILAR ISSUE HAS P ROPPED UP IN THE APPELLANT'S APPEALS FOR EARLIER ASSESSMENT YEARS THE APPELLATE ORDERS FOR ASSESSMENT YEAR 2006-07 FURTHER CONFIRMED BY THE ITAT VIDE ITS ORDE R DATED 17/07/2009 AND 2007- 08 STAND FURTHER CONFIRMED BY THE ITAT VIDE ITS ORD ER DATED 11/06/2010. THE FACTS OF THE PRESENT CASE ARE EXACTLY SIMILAR AS IN THE P RECEDING TWO YEARS. THE OPERATIVE PART OF MY PREDECESSOR'S ORDER DATED 26/02/2009 FOR ASSESSMENT YEAR 2006-07 IN THE CONTEXT IS AS FOLLOWS: '2.4.2. THE ABOVE REFERRED DECISION OF TRIBUNAL IS QUITE DECISIVE, THOUGH, WITH DUE RESPECTS, NOT AS EXPLICIT AS ONE WOULD HAVE EXPECTE D, FOR THE PURPOSE OF GUIDELINES AND APPLICATION AS A RATIO. WHILE THE SPECIFIC REFE RENCE HAS BEEN MADE TO THE AMENDMENT LETTER DATED 31/01/2007 OF THE SCIENCE AN D TECHNOLOGY DEPARTMENT, REFERRED TO IN THE EARLIER PARAGRAPH, TO HOLD THAT THE GRANTS ARE COVERED U/S.LL(L)(D), THE FACTUAL POSITION IS THAT THIS LETTER COVERED ON LY THE GRANTS GIVEN BY THE GOVERNMENT OF GUJARAT AND FORMS ABOUT RS.25 CR. OUT OF THE TOTAL RECEIPTS OF RS.33,00,99,228/-. SINCE THE DIRECTIONS OF THE TRIB UNAL ARE ALL ENCOMPASSING, IT IS TO BE PRESUMED THAT THE TRIBUNAL WHILE COMING TO THIS DECISION HAS ALSO GIVEN THE POSITIVE FINDING IN FAVOUR OF THE APPELLANT WITH RE SPECT TO THE GRANTS RECEIVED FROM GOVERNMENT OF INDIA AS ALSO FROM OTHER GOVERNMENT A GENCIES. THIS WOULD BE FURTHER VINDICATED BY THE FACT THAT THE ORDER BEING A COMBINED ORDER FOR ASSESSMENT YEARS 2004-05 AND 2005-06, THE REVENUE'S APPEAL FOR ASSESSMENT YEAR 2004-05 ON THE CIT(A)'S ORDER FAVOURABLE TO THE ASSESSEE, HAVE BEEN DISMISSED. TO PUT IT IN OTHER WORDS, THE TWO ABOVE REFERRED QUESTIONS WHICH WERE RAISED BY THE ASSESSING OFFICER AND DECIDED IN FAVOUR OF THE REVENUE, SEEM TO HAVE BEEN DECIDED IN FAVOUR OF THE ASSESSEE. 2.4.3. HENCE, NOTWITHSTANDING THE UNDERSIGNED'S POI NT OF VIEW (WHO PASSED THE PRECEDING YEAR'S APPELLATE ORDER) WHICH REMAINS THE SAME AS THAT OF THE PRECEDING ASSESSMENT YEAR, I.E. ASSESSMENT YEAR 2005-06, TO K EEP JUDICIAL DISCIPLINE AS ALSO TO IMPLEMENT THE DECISION OF A SUPERIOR APPELLATE AUTH ORITY, IT IS HEREBY HELD THAT THE GRANTS RECEIVED BY THE SOCIETY WERE TO BE TREATED A S COVERED U/S.LL(L)(D) BEING COVERED BY THE CIRCULAR DATED 31/01/2007 AND BEING FOR THE SPECIFIC PURPOSE OF CAPITAL EXPENDITURE. HENCE, THE ASSESSING OFFICER'S ACTION IN TREATING THE AMOUNT OFRS.34,96,48,719/- AS INCOME IS QUASHED.' 3.5. FOLLOWING THE SAME, FOR THIS YEAR ALSO IT IS HELD T HAT THE ASSESSING OFFICER'S ACTION IN TREATING THE RECEIPT OF RS. 11,39,81,781/ - AS INCOME IS NOT JUSTIFIED AND HENCE THE SAME IS DELETED. 4.THE ONLY REMAINING GROUND IS GROUNDS 5, WHICH IS AS FOLLOWS: ITA NO 3096 /AHD/2011 . A.Y. 2008-09 3 '5) WITHOUT PREJUDICE TO FORGOING, IF AS PER GROUND NOS.2 TO 4, IT IS HELD THAT THE AMOUNT RECEIVED AS GRANT FOR A SUM OF RS. 11,39,81, 781/-IS TOWARDS CORPUS OF THE TRUST AND HENCE NOT LIABLE TO BE INCLUDED IN TOTAL INCOME, THE DEFICIT AS COMPUTED BY THE APPELLANT IN ITS RETURN OF INCOME FOR A. Y. 200 8-09 AT RS.27,22,76,988/- BE DIRECTED TO BE CARRIED FORWARD.' 4.1 THIS GROUND IS CONSEQUENTIAL TO THE DECISION ON THE OTHER THREE EFFECTIVE GROUNDS AND IT HAS BEEN DECIDED IN APPEALS OF EARLIER YEARS ; THAT ON THE BASIS OF THE GUJARAT HIGH COURT'S DECISION IN THE CASE OF CIT VS. SHRI P LOT SWETAMBER MURTI PUJAK JAIN MAN 211 ITR 293 THE APPELLANT WILL BE ENTITLED TO C ARRY FORWARD OF DEFICIT OF INCOME OVER EXPENDITURE. THE SAME RATIO HAS TO APPLY TO TH IS ASSESSMENT YEAR ALSO, IN CASE THERE TURNS OUT TO BE A DEFICIT DUE TO THE APPELLAT E DECISION, THE APPELLANT WOULD BE ENTITLED TO CARRY FORWARD THE DEFICIT OF INCOME OVE R EXPENDITURE. THE GROUND IS DECIDED ACCORDINGLY. HOWEVER, AS FAR AS THE QUANTUM OF THE DEFICIT IS CONCERNED, THE SAME WILL HAVE TO BE SPECIFICALLY QUANTIFIED BY THE ASSESSING OFFICER. 4. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), REV ENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS:-. 1. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND ON FA CTS IN NOT CONSIDERING THE GRANTS RECEIVED FROM GOVT. OF GUJARAT AND CONTRIBUTION FRO M GUJARAT STATE DISASTER MANAGEMENT AUTHORITY ( GSDMA) AMOUNTING TO RS.11,39 ,81,781/-, AS INCOME OF THE TRUST U/S 11(1) OF THE I T ACT AND THEREBY DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON THIS ISSUE. 5. BEFORE US, THE LD. D.R. SUPPORTED THE ORDER OF A.O. ON THE OTHER HAND, LD. A.R REITERATED THE SUBMISSIONS MADE BEFORE A.O AND LD. CIT(A) AND FURTHER SUBMITTED THAT THE ISSUE IN THE PRESENT CASE IS COV ERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE AND WHICH WAS CONSIDERED BY LD. CIT(A) WHILE DECIDING THE ISSUE. HE THUS SUPPORTED THE ORDER OF LD. CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT DURING THE YEAR ASSESSEE HAD RECEIVED GRA NT FROM GOVERNMENT OF GUJARAT (RS. 10.20 CRORE) AND CONTRIBUTION FROM GSD MA (RS. 1.19 CRORE) ITA NO 3096 /AHD/2011 . A.Y. 2008-09 4 AGGREGATING TO RS. 11.39 CRORE. A.O WAS OF THE VIEW THAT THE AFORESAID CONTRIBUTION IS TO BE CONSIDERED AS INCOME OF THE A SSESSEE. WE FIND THAT LD. CIT(A) WHILE DELETING THE ADDITION HAS NOTED THAT I N EARLIER YEAR SIMILAR ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUN AL IN ASSESSEES OWN CASE. BEFORE US, REVENUE HAS NOT BROUGHT ANY CONTRA RY BINDING DECISION IN ITS SUPPORT NOR COULD PLACE ANY MATERIAL ON RECORD TO DEMONSTRATE THAT THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE IN EARLIER YEARS THAT WAS CONSIDERED BY LD. CIT(A) HAS BEEN OVERTURNED BY THE HONBLE HIGH COURT. FURTHER, REVENUE HAS ALSO NOT BROUGHT OUT ANY CHANG E IN THE FACTS OR IN LAW WHICH WOULD JUSTIFY DEPARTURE FROM THE ACCEPTED POS ITION IN EARLIER YEARS. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO I NTERFERE WITH THE ORDER OF LD. CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMI SSED. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 19 - 06 - 2015. SD/- SD/- (KUL BHARAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AH MEDABAD