MAHARASHTRA INDUSTRIAL DEVELOPMENT CORPORATION, MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTIONS)-2(1), MUMBAI

ITA 3433/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7925 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Appeal Filed On: 22-05-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset; Depreciation; Opportunity of being heard; Diversion of income; Question of law; Revocable transfer; Set aside
• Section: 56; 11; 143(3); 143(1); 201; 264; 43; 13; 22; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI PRAMOD KUMAR , VP AND SHRI AMARJIT SINGH, JM / I.T.A. NO . 3433 / MUM/201 9 ( / ASSESSMENT YEAR :201 5 - 1 6 ) MAHARASHTRA INDUSTRIAL DEVELOPMENT CORPORATION UDYOG SHARTHI MAHAKALI CAVES ROAD, ANDHERI (E), MUMBAI - 400093 . / VS. DCIT - (EXEMPTION) - 2(1) ROOM NO.519, 5 TH FLOOR, PIRAMAL CHAMBERS, LALBAUG, LOWER PAREL, MUMBAI - 400012 . / I.T.A. NO. 3354 /MUM/201 9 ( / ASSESSMENT YEAR: 201 5 - 1 6 ) DCIT (EXEMPTION) - 2(1) ROOM NO.519, 5 TH FLOOR, PIRAMAL CHAMBERS, LALBAUG, LOWER PAREL, MUMBAI - 400012 . / VS. MAHARASHTRA INDUSTRIAL DEVELOPMENT CORPORATION UDYOG SHARTHI MAHAKALI CAVES ROAD, ANDHERI (E), MUMBAI - 400093. ./ ./ PAN/ GIR NO. : AAACM3560C ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 22 / 06 / 202 1 / DATE OF PRONOUNCEMENT: 09 / 0 7 / 20 21 / O R D E R PER AMARJIT SINGH (JM) : THE ASSESSEE AS WELL AS REVENUE HA VE FILED THE ABOVE MENTIONED APPEAL S AGAINST THE ORDER DATED 07 . 0 2 .201 9 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 04 , MU MBAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 2015 - 1 6 . ITA. NO.3354 /MUM/201 9 2 . THE REVENUE HA S FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 07 . 0 2 .201 9 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 04 , ASSESSEE BY : SHRI K. MADHUSUDAN REVENUE BY: MS. NEHA SHARMA (D R) ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 2 MUMBAI [HEREINAFTER RE FERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 2015 - 1 6 . 3. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: - 1. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. C1T(A) IS RIGHT IN HOLDING THAT OWNERSHIP OF LAND VESTED WITH THE STATE GOVERNMENT AND ALSO THAT THE INCOME ARISING FROM VIZ, LEASE PREMIUMS, RENT, (DEVELOPMENT ACTIVITIES, INTEREST INCOME ON FUNDS PARKED AS DEPOSITS WITH THE BANK ETC CANNOT BE ASSESSED AS THE INCOME OF THE ASSESSEE CORPORATION FOLLOWING THE DECISION OF HONIBLE FIAT IN THE ASSESSEE'S OWN CASE'? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.C1T(A) IS RIGHT IN MERELY FOLLOWING THE DECISION OF HONBLE ITAT IN THE ASSESSEE'S OWN CASE FOR A. Y.2011 - 12 WHERE IT WAS HELD THAT TH E LAND BELONGS TO THE STATE GOVERNMENT AND MERELY ITS POSSESSION WAS GIVEN TO THE ASSESSEE IGNORING THE FACTS THAT THE LAND WAS LEASED BY ASSESSEE AS LESSOR THAT TOO FOR LONG PERIODS SUCH AS 30/ 60/ 90 YEARS AND TOO WITHOUT ANY REFERENCES OF GOVERNMENT OR GOVERNOR AS ALSO REQUIRED UNDER ARTICLE 299 OF CONSTITUTION, AT PRICES DETERMINED BY IT, IGNORING THE PRINCIPLE OF MEMO DAT QUOD DOT QUOD NON HABIT, SUCH TRANSFER WAS ACCEPTED BY THE REGISTRAR OFFICE AND OTHER FACTS, LEGAL POSITION FACTS AND ARGUMENTS BROU GHT OUT BY THE AO, C1T(A) AND CIT DR IN ORAL ARGUMENTS AND IN WRITTEN SYNOPSIS. 3. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) IS RIGHT IN HOLDING THAT THE LAND BELONGS TO THE STATE GOVERNMENT AND MERELY ITS POSSESS ION WAS GIVEN TO THE ASSESSEE MERELY FOLLOWING THE DECISION OF HON'BLE ITAT IN THE ASSESSEE'S OWN CASE FOR A.Y.2011 - 12 IGNORING THE PROVISIONS OF SECTION 3(2) OF MIDC ACT UNDER WHICH ASSESSEE IS AN INDEPENDENT BODY INCORPORATED UNDER SECTION 32(7) OF M1DC ACT WHICH ENVISAGE COMPULSORY TRANSFER OF LAND ACQUIRED BY THE ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 3 GOVERNMENT TO ASSESSEE FOR ITS OBJECTS AND SECTION 39 OF MIDC ACT UNDER WHICH THE ASSESSEE CAN DISPOSE OF THE LAND ONLY AFTER GOVERNMENT ACQUIRE AND TRANSFER SUCH LAND TO THE ASSESSEE. 4. WHET HER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.C1T(A) IS RIGHT IN FOLLOWING THE DECISION OF HON'BLE FIAT IN THE ASSESSEE'S OWN CASE FOR A.Y.2011 - 12 WHERE IT WAS HELD THAT THE LAND BELONGS TO THE STATE GOVERNMENT AND MERELY ITS POS SESSION WAS GIVEN TO THE ASSESSEE IGNORING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF DIGAMBER & ORS. VS. STATE OF MAHARASHTRA & ORS. CIVIL APPEAL NO. 5346 OF 2013, DATED 01.08.20131 WHICH AT PAGE 3 - PAR - A 9 IT IS CLEARLY STATED THAT THE LAND WAS ACQUIRED BY THE GOVERNMENT 'IN FAVOUR OF THE CORPORATION 'AND ORDERED THAT THE ENHANCED COMPENSATION WAS TO BE PAID BY M1DC AND NOT BY THE STATE GOVERNMENT ALSO PROVING THAT THE LAND BELONGED TO M1DC. 5. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.C1T(A) WAS CORRECT IN FOLLOWING THE DECISION OF HON'BLE FIAT IN THE ASSESSEE'S OWN CASE FOR A.Y.2011 - 12 WHERE IT WAS HELD THAT THE MONEY GENERATED FROM SALE /LEASE OF PLOTS, PROVIDING DEVELOPMENT ACTIVITIES AS WELL AS EARNING ON INTEREST ON FUNDS PARKED AS DEPOSITS WITH THE BANK BELONGED TO THE STATE GOVT. THOUGH AS PER SECTION 20 OF THE MDC ACT THE MONEY RECEIVED FROM THE SALE OF PLOTS BECAME THE ASSESSEES OWN MONEY BY OPERATION OF LAW AND AS PER SECTION 25 OF THE M1DC ACT, T HE ASSESSEE HAS AUTHORITY TO SPEND ANY SUM OUT OF SUCH FUND AND OTHERWISE ALSO THIS ..INCOME CLAIMED TO BE BELONGING TO THE STATE GOVERNMENT NR EXPENDITURE OUT OF THE SAME IS NOT PART THE BUDGET OF THE STATE GOVERNMENT. 6. WHETHER ON THE FACTS AND IN THE C IRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) JUSTIFIED IN FOLLOWING THE DECISION OF HONBLE ITAT IN THE ASSESSEES OWN CASE FOR AY2011 - 12 WHERE RELYING ON GOVT. RESOLUTION, IT WAS HELD THAT THE LAND BELONG TO THE GOV. DESPITE HAVING HELD IN FIRST RO UND OF APPEAL THAT THE MIDC ACT SHALL HAVE SUPREMACY OVER THE RESOLUTION ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 4 PASSED BY THE STATE GOVERNMENT, HENCE THE RESOLUTION PASSED BY THE STATE GOVERNMENT CAN NOT TO BE CONSIDERED FOR DETERMINING THE STATUS OF THE AGENCY. 7. WHETHER ON THE FACTS AND IN T HE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) IS RIGHT IN FOLLOWING THE DECISION OF HONBLE ITAT IN THE ASSESSEE'S OWN CASE FOR A.Y.2011 - 12 WHERE IT WAS HELD THAT INCOME ARISING FROM VARIOUS ACTIVITIES RELATING TO LAND DOES NOT BELONG TO ASSESSE, THOUGH THE ACTIVITIES OF DEALING IN LANDS WERE CONSIDERED THAT OF ASSESSEE, FOR HOLDING THAT IT IS HIT BY THE PROVISO TO SECTION 2(15) OF THE LT. ACT IN THE FIRST ROUND SEAL. 8. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN FOLLOWING THE DECISION OF HONTLE ITAT IN THE ASSESSEE'S OWN CASE FOR A.Y.2011 - 12 WHERE IT WAS HELD THAT OWNERSHIP OF LAND VEST WITH THE STATE GOVERNMENT AND THE INCOME ARISING THERE FROM VIZ, LEASE PREMIUMS, RENT, INTEREST INCOME ON FUNDS PARKED AS DEPOSITS WITH THE BANK ETC. BELONG TO STATE AND CANNOT BE ASSESSED AS THE INCOME OF THE ASSESSEE CORPORATION DESPITE THE FACT THAT THE HONBLE ITAT ALSO HELD IN THEIR EARLIER ORDER DATED 27.03.2015 IN THE SAME CASE FOR A. V.2071 - 12 THAT THE ASSESSEE IS NOT AN 'AGENT' OF THE STATE GOVERNMENT WHICH HAD BEEN UPHELD BY THE HONBLE HIGH COURT IN APPEAL NO. 10 OF 2016 IN ORDER DATED 14.08.2018?' 9. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS RIGHT IN FO LLOWING THE DECISION OF HON'BLE ITAT IN THE ASSESSEE'S OWN CASE FOR A Y 2011 - 12 WHERE IT WAS HELD THAT OWNERSHIP OF LAND VESTED WITH THE STATE GOVERNMENT AND INCOME ARISING THERE FROM VIZ, LEASE PREMIUM, RENT, INTEREST INCOME ON FUNDS PARKED AS DEPOSITS WI TH THE BANK ETC. CANNOT BE ASSESSED AS THE INCOME OF THE ASSESSEE CORPORATION WITHOUT CONSIDERING EACH ITEM SEPARATELY IN VIEW OF THEIR OWN DIRECTIONS IN FIRST ROUND OF APPEAL TO AO IN THE ASSESSEE'S OWN CASE FOR A.Y.2011 - 12 TO EXAMINE THE CLAIM OF ASSESSE E THAT SOME ACTIVITIES WERE DONE BY IT ON ITS ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 5 OWN ACCOUNT AND SOME ON BEHALF OF THE GOVERNMENT AND ASSESSEE'S FAILURE TO COMPLY WITH THESE DIRECTION TO BIFURCATIONS. 10. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) I S CORRECT IN FOLLOWING THE DECISION OF HONBLE ITAT IN THE ASSESSEE'S OWN CASE FOR A. Y.2011 - 12 WHERE IT WAS CONCLUDED THAT THE TRANSFER OF LAND BY THE STATE GOVERNMENT TO ASSESSE WAS A 'REVOCABLE TRANSFER' WITHIN THE MEANING OF SECTION 61 TO 63 OF LT. ACT , BASED ON SECTION 43I4(3) RW.S. 32(7) AND SECTION 56 OF MIDC ACT IGNORING THE FACT THAT PROVISION OF SECTION 56 OF MIDC ACT WHEN COMES INTO OPERATION AFTER SUBSTANTIAL DEVELOPMENT OF ESTATE, WHEN THE PLOTS ARE ALREADY LEASED TO INDUSTRY AND REVOCATION OF LAND FROM ASSESSEE TO GOVT. IS NOT POSSIBLE. 11. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS CORRECT IN ALLOWING CLAIM OF DEPRECIATION AS APPLICATION OF INCOME CLAIMED BY THE ASSESSEE FOLLOWING THE DECISION OF H ON'BLE BOMBAY HIGH COURT IN THE CASE OF CH' VS. INSTITUTE OF BANKING PERSONNEL (264 1TR 110) IGNORING THE CHANGED LEGAL POSITION AS A RESULT OF INSERTION OF SUB - SECTION (6) OF SECTION 11 IN THE LT. ACT W.E.F. 01.04.2015 WHERE IT HAS BEEN PROVIDED THAT WHER E ANY INCOME IS REQUIRED TO BE APPLIED FOR ACCUMULATION OR SET APART FOR APPLICATION, THEN , FOR THE PURPOSES THE INCOME SHALL BE DETERMINED WITHOUT ANY DEDUCTION OR ALLOWANCE BY WAY OF DEPRECIATION OR OTHERWISE IN RESPECT OF ANY ASSET, ACQUISITION OF WHIC H HAS BEEN CLAIMED AS APPLICATION OF INCOME UNDER THIS SECTION IN THE SAME OR ANY OTHER PREVIOUS YEAR'. 12. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS CORRECT IN FOLLOWING THE DECISION OF THE HON'BLE ITAT IN T HE ASSESSEE'S OWN CASE FOR A. Y.2011 - 12 WHILE DECIDING THE ABOVE ISSUE. 13. 'THE APPELLANT PRAYS THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 4, MUMBAI BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED.' ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 6 14. 'THE APPELLANT CRAVES LEA VE THE AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY'. 4 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 22.09 .201 5 DECLARING TOTAL INCO ME TO THE TUNE OF RS. NIL FOR THE A.Y.2015 - 16 . THE RETURN OF IN COME WAS PROCESSED U/S 143(1) OF THE ACT. THEREAFTER, THE CASE OF THE ASSESSEE WAS ASSESSED U/S 143(3) OF THE ACT DETERMINING TOTAL INCOME TO THE TUNE OF RS.23,70,68,50,760/ - ON 29.12.2017 . AGGRIEVED BY THE ADDITION, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO ALLOWED THE CLAIM OF THE ASSESSEE IN CONNECTION WITH THE GROUNDS MENTIONED ABOVE, THEREFORE, THE REVENUE HAS FILED THE PRESENT APPEAL BEFORE US. GROUNDS NOS. 1 TO 10 & 12 5. THE REVENUE HAS CHALLENGED THE GROUNDS NO. 1 TO 10 & 12 ON THE BASIS O F THIS FACT THAT THE CIT(A) HAS FOLLOWED THE DECISION OF THE HONBLE ITAT IN THE ASSESSEES OWN CASE FOR THE A.Y. 2011 - 12 BEARING ITA. NO. 6552/MUM/2014 WHICH IS NOT JUSTIFIABLE, HENCE, THE FINDING OF THE CIT(A) IS LIABLE TO BE SET ASIDE IN THE INTEREST OF JUSTICE. HOWEVER, ON THE OTHER HAND, THE LD. REPRESENTATIVE OF THE ASSESSEE HAS PLACED RELIANCE UPON THE DECISION OF THE CIT(A) ON ALL THE ISSUES. BEFORE GOING FURTHER, WE DEEM IT NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RECORD.: 5. GROUNDS NO. '1 & 2 : THESE GROUNDS ARE GENERAL IN NATURE. THE ADJUDICATION OF SUBSEQUENT GROUND WILL REDRESS THE GRIEVANCE RAISED BY THE APPELLANT, THEREFORE, GROUNDS NO. 1 AND 2 RAISED BY THE APPELLANT ARE DISMISSED. 6. GROUND NO. 3 VIDE THIS GROUND APPELLANT HAS AGITA TED AGAINST THE OBSERVATION OF THE LD. AC STATING THAT THE APPELLANT WAS NOT A VALID ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 7 TRUST. IN PARA 3.1 .2 OF THE ASSESSMENT ORDER THE LD. AO HAD MENTIONED THAT DURING THE ASSESSMENT OF THE ASSESSEE TRUST FOR AY. 2010 - 11, IT WAS HELD THAT ASSESSEE TRUST WA S NOT A VALID TRUST IN PARA 3.1.3 THE LD. AC MENTIONED THAT HE HAD NO REASON TO DEFER FROM THE FINDINGS GIVEN IN APPELLANTS OWN ASSESSMENT YEAR 2010 - 11. APPELLANT HAS AGITATED THE FINDINGS GIVEN BY THE LD. AC AND STATED THAT IN APPELLANTS OWN CASE FOR A.Y 2011 - 12 ITA NO. 6552/MUM/2014], THE APPEAL OF THE ASSESSEE HAS BEEN DECIDED BY HON'BLE ITAT. THE RELEVANT OBSERVATIONS OF HONBLE ITAT ARE REPRODUCED AS UNDER: '9.....THE FIRST REASON CITED BY THE C?T(A) WAS THAT THE CLAUSE 58 OF THE MID ACT PROVIDES FOR T HE DISSOLUTION OF THE ASSESSEE AND HENCE IT FALLS IN THE CATEGORY OF A REVOCABLE TRUST. WE ARE NOT ABLE TO ACCEPT THIS VIEW EXPRESSED BY THE LD. CIT(A). IN OUR VIEW, THE DISSOLUTION CLAUSE WOULD NOT TANTAMOUNT TO A REVOCATION' CLAUSE. THE DISSOLUTION CLAUS E PROVIDES FOR THE MANNER OF DISTRIBUTION OF ASSETS IN THE CASE OF WINDING UP AND, IN FACT. EVERY TRUST DEED OR MEMORANDUM IS EXPECTED TO HAVE SUCH KIND OF CLAUSE. THERE SHOULD NOT BE ANY DISPUTE THAT 'REVOCATION AND WINDING UP' HAVE DIFFERENT MEANING AND PURPOSE. A CAREFUL PERUSAL OF SECTION 58 OF THE MID ACT WOULD SHOW THAT THE SECTION PRESCRIBES A CONDITION FOR DISSOLVING THE ASSESSEE, MEANING THEREBY THE ASSESSEE CANNOT BE DISSOLVED AT THE SWEET WILL OF THE STATE GOVERNMENT ACCORDINGLY, WE ARE NOT AGREE ABLE WITH THE VIEW OF THE LD. CIT('A) AND ACCORDINGLY SET ASIDE THE SAME,...' FURTHER THE APPELLANT SUBMITTED THAT DEPARTMENT FILED AN APPEAL BEFORE HON.BLE BOMBAY HIGH COURT AGAINST THE ORDER OF HON'BLE ITAT. ACCORDING TO THE APPELLANT APPEAL OF THE DEPAR TMENT HAS BEEN DECIDED BY HON'BLE BOMBAY HIGH COURT IN ITXA 291/2016. SINCE THE APPEAL HAS BEEN DISMISSED BY HON'BLE: BOMBAY HIGH COURT, THEREFORE, RESPECTFULLY FOLLOWING JUDGEMENTS OF HONBLE ITAT IN APPELLANT'S OWN CASE FOR AY. 2011 - 12 APPEAL OF THE ASSE SSEE ON THIS GROUND IS. ALLOWED. ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 8 7. GROUND NO. 4: VIDE THIS GROUND. APPELLANT HAD CLAIMED THAT THE ASSESSEE TRUST WAS IMMUNE FROM TAXATION UNDER ARTICLE 289 OF THE CONSTITUTION ON THE GROUND THAT IT WAS UNDERTAKING SOVEREIGN FUNCTION. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE LD. AR OF THE APPELLANT FAIRLY CONCEDED THAT THE GROUND INVOLVED WAS EARLIER DECIDED AGAINST THE APPELLANT BY THE HON'BLE ITAT THE GROUND WAS ALSO DECIDED BY THE HON'BLE BOMBAY HIGH COURT, ALSO AGAINST THE APPELLANT. THE QUESTION OF LAW RAISED BY THE APPELLANT BEFORE HON'BLE HIGH COURT WAS AS UNDER: (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE TRIBUNAL WAS RIGHT IN LAW IN HOLDING THAT THE APPELLANT WAS NOT CARRYING ON ITS ACTIVITIES ON BEHA LF OF THE GOVERNMENT OF MAHARASHTRA AND ACCORDINGLY NOT EXIGIBLE TO INCOME - TAX UNDER ARTICLE 289 OF THE CONSTITUTION OF THE QUESTION OF LAW RAISED BY THE APPELLANT WAS DISMISSED BY THE HON'BLE HIGH COURT WITH THE FOLLOWING OBSERVATIONS: (A) THE IMPUGNED OR DER OF THE TRIBUNAL HELD THAT THE APPELLANT COULD NOT BE CONSIDERED AS A PART OF THE GOVERNMENT DEPARTMENT SO AS TO BE EXEMPTED FROM INCOME TAX IT HELD THAT ARTICLE 289 OF THE CONSTITUTION OF INDIA WOULD NOT EXTEND TO THE APPELLANT IT PLACED RELIANCE UPON THE DECISION OF THE SUPREME COURT IN ANDHRA PRADESH STATE ROAD CORPORATION VS. ITO. 521 ITR 524 TO COME TO THE AFORESAID CONCLUSION (B)MR. SRIDHARAN. LEARNED SENIOR COUNSEL APPEARING IN SUPPORT OF THE APPEAL CHALLENGES THE ABOVE FINDING I CONCLUSION OF THE TRIBUNAL AS BEING CONTRARY TO THE DECISION OF ITS CO - ORDINATE BENCH IN THE CASE OF CIDCO (MAH) LTD. VS. ACIT 138 ITD 381.1N THE ABOVE CASE, IT HAD TAKEN A VIEW THAT AN INCORPORATED COMPANY ENGAGED IN THE CONSTRUCTION AND DEVELOPMENT OF RESIDENTIAL AND COM MERCIAL STRUCTURES WOULD NOT BE SUBJECTED TO INCOME TAX BEING AN AGENT OF THE STATE GOVERNMENT. IT IS SUBMITTED THAT THE FACTS ARE SIMILAR AND THE SAME BENEFIT SHOULD BE EXTENDED TO THE APPELLANT HEREIN. ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 9 (C) HOWEVER, IT WAS FAIRLY POINTED OUT BY MR SRIDHAR AN, LEARNED SENIOR COUNSEL FOR THE APPELLANT THAT THE STATE HAS FILED AN APPEAL TO THIS COURT FROM THE ORDER OF THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF CIDCO (SUPRA) TO THIS COURT BEING INCOME TAX APPEAL NO 1394OF 2013 THE ABOVE APPEAL HAS BEE N ADMITTED ON 8THJULY. 2015 AS GIVING RISE TO SUBSTANTIAL QUESTION OF LAW ON THE QUESTION. 'WHETHER CIDCO WAS AGENT OF THE GOVERNMENT AND PROTECTED BY ARTICLE 289 OF THE CONSTITUTION OF INDIA AND WAS NOT EXIGIBLE TO INCOME TAX:. (D) WE AGREE WITH MR. SINGH . TEAMED ASG THAT THIS ISSUE IS NO LONGER RESINTEGRA AS IT STANDS CONCLUDED BY THE DECISION OF THE SUPREME COURT IN ADITYA INDUSTRIAL AREA DEVELOPMENT AUTHORITY VS UNION OF INDIA.2006 (5) SCC 100 WHEREIN AN IDENTICAL / SIMILAR ENTITY TO THE APPELLANT HEREI N WAS NOT EXTENDED THE BENEFIT OF ARTICLE 289 OF THE CONSTITUTION OF INDIA IN THE CONTEXT OF BIHAR INDUSTRIAL DEVELOPMENT AUTHORITY ACT.1974 (AUTHORITY ACT. 1974). OUR ATTENTION WAS PARTICULARLY DRAWN TO SIMILAR/ IDENTICAL PROVISIONSINAUTHORITYACT.1974 AND THE MAHARASHTRA INDUSTRIAL DEVELOPMENT ACT.1961 TO POINT OUT THE IDENTICAL NATURE OF THE TWO ENTITIES THEREFORE. THE DECISION OF THE TRIBUNAL IN CIDCO (SUPRA) WAS PER INCURIM AS THE ABOVE DECISION OF THE APEX COURT WAS NOT BROUGHT TO ITS NOTICE. FURTHER, ON FACTS, THIS CASE STANDS CONCLUDED BY THE DECISION OF THE SUPREME COURT IN ADITYA INDUSTRIAL AREA DEVELOPMENT AUTHORITY (SUPRA).THUS, THE ADMISSION OF THE APPEAL IN THE CASE OF CIDCO (SUPRA) BY THIS COURT WOULD NOT ON FACTS OF THIS CASE, WARRANT ADMISSIO N OF THIS APPEAL. (E) THEREFORE, IN FACE OF THE SUPREME COURT DECISION IN ADITYA INDUSTRIAL AREA DEVELOPMENT AUTHORITY (SUPRA) WHICH CONCLUDES THE ISSUE IN THE PRESENT FACTS, THE QUESTION AS PROPOSED DOES NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF LAW. T HUS, NOT ENTERTAINED. RESPECTFULLY FOLLOWING THE JUDGEMENT OF THE HON'BLE HIGH COURT THIS GROUND OF APPEAL RAISED BY THE APPELLANT IS, DISMISSED. ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 10 8. GROUND NO. 5 VIDE THIS GROUND, APPELLANT HAD CHALLENGED THE OBSERVATIONS MADE BY THE LD. AO THAT THE ASSESS EE TRUST WAS UNDERTAKING COMMERCIAL ACTIVITIES AND COMMERCE AND ACCORDINGLY HIT BY THE PROVISO TO SECTION 2(15) OF THE ACT. THE LD. AR OF THE APPELLANT FAIRLY CONCEDED THAT THE GROUNDS RAISED BY THE APPELLANT HAD BEEN DECIDED AGAINST THE APPELLANT BY HON'B LE ITAT IN ITS OWN CASE FOR THE A.Y. 2010 - 11. THE RELEVANT PART OF THE HONBLE ITAT ORDER IS REPRODUCED AS UNDER: THE PRESENT DAY SCENARIO WOULD SHOW THAT THE PRIVATE ENTREPRENEURS ARE DEVELOPING MANY SPECIAL ECONOMIC ZONES ALL OVER THE COUNTRY HENCE, IN T HE PRESENT DAY SCENARIO, THE ACTIVITIES OF THE ASSESSEE AND THE PRIVATE ENTREPRENEURS STAND ON SAME FOOTING. THERE CANNOT BE ANY DISPUTE THAT THE ACTIVITY OF SETTING UP/DEVELOPING INDUSTRIAL ESTATES AND MAINTAINING THE INFRASTRUCTURE FACILITIES BY THE PRIV ATE ENTREPRENEURS IS CONSIDERED AS 'BUSINESS ACTIVITY'. SINCE THE ACTIVITY CARRIED ON BY THE ASSESSEE IS NO DIFFERENT FROM THAT ONE CARRIED ON BY THE PRIVATE ENTREPRENEURS, IN OUR VIEW, THE ACTIVITY CARRIED ON BY THE ASSESSEE SHOULD ALSO BE CONSIDERED TO B E 'BUSINESS ACTIVITY' ONLY HENCE, THE ACTIVITY CARRIED ON BY THE ASSESSEE, IN OUR VIEW, WOULD BE HIT BY THE PROVISO TO SEC. 2(15) OF THE ACT. 28. THE LD AO INVITED OUR ATTENTION TO THE VARIOUS PROVISIONS OF MID ACT TO CONTEND THAT THE ASSESSEE IS CARRYING ON ITS OPERATIONS IN ACCORDANCE WITH THE DIRECTIONS ISSUED BY THE SLATE GOVERNMENT HE FURTHER SUBMITTED THAT THE LANDS VESTED WITH THE ASSESSEE CAN ALSO BE TAKEN BACK BY THE STATE GOVERNMENT. ACCORDINGLY, HE CONTENDED THAT THE ACTIVITIES OF THE ASSESSEE CA NNOT BE CONSIDERED TO BE A BUSINESS ACTIVITY, SINCE IT IS ACTING IN ACCORDANCE WITH THE DIRECTIONS ISSUED BY THE STATE GOVERNMENT. IN OUR VIEW, THE CONTROL OR DIRECTIONS ISSUED BY THE STATE GOVERNMENT WOULD NOT CHANGE THE CHARACTER OF 'BUSINESS ACTIVITY' W E ARE OF THE VIEW THAT THE ACTIVITY CARRIED ON BY THE ASSESSEE SHOULD BE EXAMINED INDEPENDENTLY AND THE FACT THAT THE ASSESSEE IS BEING REGULATED BY THE STATE GOVERNMENT WOULD NOT MAKE ANY DIFFERENCE. IN OUR VIEW 'OWNERSHIP' OF THE CORPORATION AND 'ACTIVIT IES' OF THE CORPORATION ARE TWO DIFFERENT ASPECTS ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 11 AND THE OWNERSHIP CANNOT BE CONSIDERED OR TAKEN INTO ACCOUNT TO DETERMINE THE CHARACTER OR NATURE OF THE ACTIVITIES CARRIED ON BY THE CORPORATION. RESPECTFULLY FOLLOWING JUDGEMENT OF HON'BLE ITAT IN APPELLA NT'S OWN CASE AS DIS4OVE APPEAL OF THE ASSESSEE ON THIS IS DISMISSED . 9. GROUND NO. 6 TO 29 VIDE THESE GROUNDS APPELLANT HAD CLAIMED THAT APPELLANT HAD RECEIVED INCOME ON BEHALF OF THE GOVERNMENT OF MAHARASHTRA. THE APPELLANT HAD ALSO CLAIMED THAT ALL THE LANDS BELONGED TO THE GOVERNMENT OF MAHARASHTRA AND NOT THE APPELLANT. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT. SIMILAR GROUNDS WERE RAISED BY THE APPELLANT VIDE GROUND HO. 1 AND GROUND NO. 3 IN THE BATCH OF APPEALS FOR A.Y. 2007 - 08 TO 2014 - 15 ( EXCEPT 2011 - 12). I HAVE DECIDED ALL THE ABOVE MENTIONED APPEALS VIDE MY ORDERS DATED 31.01.2019 BY FOLLOWING THE ORDER OF HONBLE ITAT IN APPELLANTS OWN CASE FOR A.Y. 2011 - 12. THE RELEVANT PART OF MY ORDER FOR A.Y. 2007 - 08 IS REPRODUCED AS UNDER: VIDE GROU ND I AND 3. THE APPELLANT HAS CLAIMED THAT THE INCOME BY WAY OF LEASE PREMIUMS, RENT, INTEREST ON BANK DEPOSITS, ETC. DOES NOT PERTAIN TO THE ASSESSEE CORPORATION BUT TO THE GOVERNMENT OF MAHARASHTRA. IN SUPPORT OF ITS CLAIM, THE APPELLANT PLACED RELIANCE ON THE JUDGMENT OF THE HON BLE ITAT IN ITS OWN CASE FOR AY 2011 - 12. THE ORIGINAL ASSESSMENT FOR AY 2011 - 12 WAS FRAMED BY THE LXI. AO VIDE ORDER DATED 28.02.2014. WHICH WAS CONFIRMED BY THE CIT(A) VIDE ORDER DATED 29.09.2014. THE APPELLANT HAS NOT PRESSED G ROUND 2 AND IS THEREFORE, DISMISSED VIDE GROUND I AND 3, THE APPELLANT HAS CLAIMED THAT THE INCOME BY WAY OF LEASE PREMIUMS, RENT, INTEREST ON BANK DEPOSITS, ETC. DOES NOT PERTAIN TO THE ASSESSEE CORPORATION BUT TO THE GOVERNMENT OF MAHARASHTRA. IN SUPPORT OF ITS CLAIM, THE APPELLANT PLACED RELIANCE ON THE JUDGMENT OF THE HON'BLE ITAT IN ITS OWN CASE FOR A Y 201112 THE ORIGINAL ASSESSMENT FOR AY 2011 - 12 WAS FRAMED BY THE LD AG VIDE ORDER DATED 28.02.2014, ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 12 WHICH WAS CONFIRMED BY THE CL T(A) VIDE ORDER DATED 29 09.2014, WITH THE FOLLOWING DIRECTIONS: '5.3, HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE, SUBMISSIONS OF THE APPELLANT AND ASSESSMENT ORDER THE ARGUMENTS AND SUBMISSIONS OF THE APPELLANT ARE BASED ON THE PROPOSITION THAT THE GOVERNMENT HAS OVERRIDING TITLE OVER SUCH INCOME AS ARE CONTESTED IN GROUND NO. B OF APPEAL HOWEVER, IT IS ON RECORD THAT THE APPELLANT IS A VALID LEGAL CORPORATION ESTABLISHED THROUGH LEGISLATION WITH ITS INDEPENDENT OBJECTS, FUNCTIONS AND POWERS. SAME ARE PERFORMED BY THE APPELLANT HAVING FULL AUTONOMY, DISCRETION AND VALID POWERS AND COMPETENCE UNDER LAW FOR THIS PURPOSE. THE ARGUMENT THAT STATE/GOVERNMENT HAS POWERS TO DECIDE THE DISSOLUTION AND/OR DISPOSAL OF ITS INCOME IS ONLY IN THE NATURE OF 'APPLICATION OF INCOME AS AGAINST DIVERSION OF INCOME, BY OVERRIDING TITLE IN THE CONTEXT OF SECTION 2(24) OF THE I T. ACT, 1961 AS ALSO SUPPORTED BY DECISION IN THE CASE OF CIT VS. SITALDAS TIRATHDAS (1961 41 ITR) (SC) THERE IS NO BASIS FOR TREATING THE INCOME OF THE APPELLANT AS ONLY FOR AND ON BEHALF OF THE STATE GOVERNMENT AND EVEN THERE IS NO SUCH LEGAL OBLIGATION EXISTING IN MIDC ACT, TO CONSIDER SUCH AN ARGUMENT. THEREFORE, ON FACTS AND AS PER LAW, HE ARGUMENT BASED ON OVERRIDING TITLE ON THE INCOME OF THE APPELLANT ARE R EJECTED THE ARGUMENT THAT AMOUNTS HAVE BEEN ACCEPTED AS IN EARLIER YEARS IN BALANCE SHEET IS NOT A RELEVANT AND VALID ARGUMENT BECAUSE THERE IS NO SUCH PROVISION IN SUPPORT OF THIS PROPOSITION AND FURTHER BECAUSE AO HAS MADE ADDITION AFTER DISCUSSING THE NATURE OR TRANSACTIONS AND COMPUTATION OF INCOME AS PER I. T. LAW. BOOK ENTRIES ARE NOT DETERMINATIVE OF THE TRANSACTIONS OR COMPUTATION OF INCOME IS A SETTLED LEGAL POSITION. THE ARGUMENTS OF GROSS AND NET AMOUNT RELATING TO THE ADDITIONS/ADJUSTMENTS MADE BY THE AO BY INCLUDING THE SAID AMOUNTS IN ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 13 INCOME OF THE APPELLANT AND NOT ALLOWING SUCH AMOUNTS AS ARE OFTEN NOT AS PER MARKET RATE BUT ARE GIVEN AT CONCESSIONAL RATES, IN ORDER TO AID THE OBJECTIVE OF THE MID ACT.' ACCORDINGLY, IT WAS CONTENDED THAT THE FUNDS RECEIVED IN RESPECT OF ACTIVITIES CARRIED ON BEHALF OF THE GOVERNMENT OF MAHARASHTRA CANNOT BE CONSIDERED AS INCOME OF THE ASSESSEE IN THE ALTERNATIVE, IT WAS CONTENDED THAT THE CORRESPONDING EXPENDITURE RELATING TO THE SAID RECEIPTS SHOULD BE ALLOW ED AS DEDUCTION AND ONLY NET INCOME CAN BE ASSESSED AS INCOME, 32 THE LD. 0, R., ON THE CONTRARY. PLACED STRONG RELIANCE ON THE ORDERS PASSED BY LD. CIT (A). 33. WE HAVE CONSIDERED RIVAL CONTENTIONS AND PERUSED RECORD. WE NOTICE THAT THE ASSESSEE IS RAISIN G THE CONTENTION FOR THE FIRST TIME BEFORE US THAT IT IS CARRYING ON THE ACTIVITIES ON ITS OWN ACCOUNT AND ALSO AS AGENT OF THE GOVERNMENT OF MAHARASHTRA. THERE APPEARS TO BE NO REFERENCE IN THE ORDERS OF THE TAX AUTHORITIES TO BE RESOLUTIONS PASSED BY THE GOVERNMENT OF MAHARASHTRA. IT IS FURTHER CONTENDED THAT THE ASSESSEE IS FOLLOWING CONSISTENTLY TAKING THE FUNDS RECEIVED ON BEHALF OF THE STATE GOVERNMENT TO THE BALANCE SHEET AS PER THE RESOLUTIONS PASSED BY THE STATE GOVERNMENT SINCE THE ASSESSEE HAS SU BMITTED THAT IT IS ALSO CARRYING OUT CERTAIN ACTIVITIES ON BEHALF OF THE GOVERNMENT OF MAHARASHTRA AND SINCE THE SAID CLAIM OF THE ASSESSEE HAS NOT BEEN EXAMINED BY THE TAX AUTHORITIES, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES FRESH EXAMINATION AT THE E ND OF THE ASSESSING OFFICE ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO EXAMINE THE SAME AFRESH BY DULY CONSIDERING ALL THE DOCUMENTS AND EXPLANATIONS THAT MA Y BE FURNISHED BY THE ASSESSEE BEFORE HIM IN ORDER TO SUBSTANTIATE ITS CONTENTIONS. THE ASSESSEE IS ALSO DIRECTED TO FURNISH ALL THE DETAILS THAT MAY BE CALLED FOR BY THE ASSESSING OFFICER. SINCE WE HAVE SET ASIDE THIS MATTER TO THE FILE OF THE AO. THE ALT ERNATIVE CONTENTION OF THE ASSESSEE IS ALSO SET ASIDE TO HIS FILE.' ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 14 8. IN CONSEQUENCE TO THE DIRECTIONS PASSED BY THE HON'BLE ITAT, THE LD. AO PASSED AN ORDER ON 15.03.2016 UNDER SECTION 143(3) RW.S. 254 OF THE ACT, REJECTING THE CLAIM OF THE APPELLANT THA T IT WAS ACTING AS AN AGENT OF THE GOVERNMENT AND ACCORDINGLY TREATED THE SUMS SHOWN IN THE LIABILITY SIDE OF THE BALANCE SHEET AS THE INCOME OF THE APPELLANT THE LD AO CATEGORICALLY GAVE A FINDING THAT THE INCOME BY WAY OF LEASE PREMIUMS, RENT, INTEREST O N BANK DEPOSITS. ETC. BELONGED TO THE ASSESSEE CORPORATION AND NOT TO THE GOVERNMENT OF MAHARASHTRA. ON APPEAL, THE LD, CIT (A) CONFIRMED THE ADDITIONS MADE BY THE LD. AO VIDE ORDER DATED 12.04 2017. AGAINST THE ORDER OF THE CIT(A), THE APPELLANT ONCE AGAI N FILED AN APPEAL TO THE HON'BLE ITAT, AND THE TRIBUNAL VIDE ORDER DATED 07.09.2018 ALLOWED THE APPEAL OF THE APPELLANT WITH THE FOLLOWING OBSERVATIONS: '13. WE SHALL NOW ADVERT TO THE CORE ISSUE INVOLVED IN THE PRESENT APPEAL I.E AS TO WHETHER THE CIT(A) WAS RIGHT IN LAW AND THE FACTS OF THE CASE IN CONCURRING WITH THE A 0 THAT AS THE LANDS UNDER CONSIDERATION WERE NOT OWNED BY THE GOVERNMENT OF MAHARASHTRA, HENCE THE INCOME ARISING THERE FROM VIZ LEASE PREMIUMS, RENT, INTEREST INCOME EARNED ON THE FUNDS P ARKED AS DEPOSITS WITH THE BANKS ETC WERE LIABLE TO BE ASSESSED AS THE INCOME OF THE ASSESSEE CORPORATION. WE ARE OF THE CONSIDERED VIEW THAT AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF /TO VS. CH. ATTCHAIAH (1996) 218 ITR 239 (SC), IT IS OBLIGATOR Y ON THE PART OF THE REVENUE AUTHORITIES TO ASSESS THE INCOME IN THE HANDS OF THE RIGHT PERSON AND THE RIGHT PERSON ALONE WE HAVE DELIBERATED AT LENGTH ON THE ISSUE UNDER CONSIDERATION IN THE BACKDROP OF THE CONTENTIONS ADVANCED BY THE REPRESENTATIVES FOR BOTH THE PARTIES AND PERUSED THE EXHAUSTIVE MATERIAL PLACED ON RECORD AND THE JUDICIAL PRONOUNCEMENTS RELIED UPON BY BOTH THE PARTIES TO ONLY BALANCE SHEET ITEMS, IS ALSO NOT SUPPORTED BY FACTS AND LEGAL PROVISIONS. THE EXPENSE OF HUGE AMOUNTS ARE DEBITED IN THE PROFIT AND LOSS ACCOUNT DURING THE YEAR THEREFORE, TO THAT EXTENT THERE IS NO AS OF ANY FURTHER ALLOWANCE/DEDUCTION OF EXPENSES RELATING TO THE AMOUNTS ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 15 UNDER QUESTION. FURTHER, NO SUCH CLAIM OR BIFURCATION OF GROSS AND NET AMOUNT WAS EITHER MADE BEF ORE AO OR IN APPELLATE PROCEEDINGS WITH SUPPORTING ACCOUNTS AND IN SPECIFIC MANNER. THERE IS NO SUCH NOTE /COMMENT IN THE FINAL ACCOUNTS / ANNUAL REPORTS POINTING OUT SUCH DIFFERENTIATION OF GROSS AND NET AMOUNTS AS CLAIMED BY THE APPELLANT. UNDER THESE CI RCUMSTANCES, THE ARGUMENTS OF THE APPELLANT FOR BIFURCATION AND CLAIM OF GROSS AND NET AMOUNTS OF THE ADDITIONS IS NOT SUSTAINABLE AND NOT SUPPORTED BY ANY WORTHY MATERIAL AND EVIDENCE THEREFORE, THE CLAIM AND ARGUMENTS AS DISCUSSED ABOVE ARE REJECTED IN V IEW OF ABOVE DISCUSSION AND FOR THE REASONS ABOVE, GROUNDS NO. 8 AND E (10, 11, 12 AND 15) OF APPEAL ARE DISMISSED.' 7. AGGRIEVED BY THE ORDER OF THE CIT(A) FOR A. Y 2011 - 12, THE APPELLANT PREFERRED AN APPEAL TO THE HON BLE ITAT ON VARIOUS GROUNDS. ON OF T HE GROUND THAT THE APPELLANT WAS ACTING AS AN AGENT OF THE GOVERNMENT OF MAHARASHTRA AND THAT THE AMOUNTS SHOWN IN THE LIABILITY SIDE OF THE BALANCE SHEET COULD NOT BE TREATED AS ITS INCOME, THE ITAT. VIDE AN ORDER DATED 27.03.2015, RESTORED THE MATTER TO THE FILE OF THE AO WITH THE FOLLOWING DIRECTIONS: '31. BEFORE US, THE LD. A.R. SUBMITTED THAT THE ASSESSEE IS CARRYING ON ITS ACTIVITIES ON ITS OWN ACCOUNT AND ALSO AS AGENT OF THE GOVERNMENT OF MAHARASHTRA. THE AMOUNT RECEIVED FROM THE ACTIVITIES CARRIED ON BEHALF OF THE STATE GOVERNMENT WAS DIRECTLY TAKEN TO THE BALANCE SHEET, SINCE THE ASSESSEE. AS AN AGENT, IS LIABLE TO HAND OVER THE SAID PROCEEDS TO THE STATE GOVERNMENT HE FURTHER SUBMITTED THAT THE ASSESSEE HAS BEEN CONSISTENTLY FOLLOWING THIS ACCOUNT ING SYSTEM AND THIS METHOD OF ACCOUNTING FOLLOWED HAS BEEN ACCEPTED BY THE COMPTROLLER AND AUDIT GENERAL OF INDIA ALSO. HE FURTHER SUBMITTED THAT THE NATURE OF THESE AMOUNTS AND ALSO THE RELATIONSHIP BETWEEN THE ASSESSEE AND THE STATE GOVERNMENT IS EVIDENT FROM READING OF NUMBER OF RESOLUTIONS / ORDERS PASSED BY THE STATE GOVERNMENT, IN THE WRITTEN SUBMISSIONS, THE ASSESSEE ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 16 HAS MADE REFERENCE TO THE RESOLUTION NO. IDC 1067138498 - 1ND - 1 DATED 16.8.1997. WITH REGARD TO THE ABOVE SAID RESOLUTION, FOLLOWING SUBM ISSIONS HAVE BEEN GIVEN IN THE WRITTEN SUBMISSIONS: '10. THE RESOLUTION CLEARLY NOTES THAT CERTAIN LANDS ACQUIRED BY THE GOVERNMENT UNDER THE MID ACT AS WELL AS UNDER OTHER LAWS SUCH AS THE LAND ACQUISITION ACT ARE PLACED AT THE DISPOSAL OF THE CORPORATION FOR THE PURPOSES OF DEVELOPMENT OF INDUSTRIAL AREAS: AND THE CORPORATION IS TO DISPOSE THE LAND TO SUITABLE INDUSTRIES. FROM THE PROCEEDS COLLECTED THROUGH SUCH DISPOSAL TO INDUSTRIES (I.E. THROUGH LEASE ETC.) THE MIDC IS ENTITLED TO REIMBURSE EXPENDITURE S INCURRED BY IT, AND THE REMAINDER AMOUNT IS REQUIRED TO BE REMITTED TO THE GOVERNMENT. THUS, THE FIRST CHARGE OVER THE AMOUNTS IS WITH THE GOVERNMENT, AND NOT WITH MIDC. FURTHER, REFERENCE MAY ALSO BE MADE TO RESOLUTION NO. IDC 10791(1 966)/I ND. 14 DATE D 11.9.1986, WHERE THE EARLIER RESOLUTION OF 1967 HAS BEEN REITERATED, AND IT HAS BEEN STATED THAT MIDC ACTS AS AN AGENT OF THE GOVERNMENT FOR DEVELOPMENT OF INDUSTRIAL AREAS AND INFRASTRUCTURAL FACILITIES UNDER THE PROVISIONS OF THE MID ACT. THESE RESOLUT IONS HAVE THE FORCE OF LAW. IT IS REITERATE THAT THE LAND BELONGS TO THE STATE GOVERNMENT AND THIS IS ALSO FURTHER EVIDENCED BY THE FACT THAT 7112 EXTRACTS IN RESPECT OF THE SAID LANDS TOO. AS THE LAND IS OWNED BY THE GOVERNMENT OF MAHARASHTRA, THE LEASE P REMIUMS COLLECTED BY THE CORPORATION ON BEHALF OF THE GOVERNMENT ARE HELD ON BEHALF OF THE GOVERNMENT OF MAHARASHTRA AND IS DISCLOSED AS 'DEPOSITS' IN THE AUDITED ACCOUNTS. IT IS NOTEWORTHY THAT THE LEASE PREMIUMS AND RENTS 14. WE FURTHER FIND FROM A PERU SAL OF SEC. 32 OF THE MIDC ACT THAT IN CASE THE STATE GOVERNMENT IS OF THE OPINION THAT ANY LAND IS REQUIRED FOR THE PURPOSE OF DEVELOPMENT BY THE ASSESSEE CORPORATION, OR FOR ANY OTHER PURPOSE IN FURTHERANCE OF THE OBJECTS OF THE SAID ACT. THEN AFTER PUTT ING THE OWNER OF THE LAND OR ANY OTHER PERSON INTERESTED THEREIN TO NOTICE AS REGARDS ITS DECISION OF ACQUIRING SUCH LAND, CALLING FOR HIS OBJECTIONS AND DISPOSING OFF THE SAME AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 17 SUCH PERSON, THE STATE GOVERNM ENT SHALL ACQUIRE SUCH LAND BY PUBLISHING A NOTICE IN THE OFFICIAL GAZETTE. ON A PERUSAL OF SUB - SECTION (4) OF SEC. 32 OF THE M1DC ACT, IT EMERGES THAT WHEN A NOTICE UNDER SEC. 32(1) OF THE ACT IS PUBLISHED IN THE OFFICIAL GAZETTE, THE LAND SHALL, ON AND F ROM THE DATE OF SUCH PUBLICATION, VEST ABSOLUTELY IN THE STATE GOVERNMENT FREE FROM ALL ENCUMBRANCES STILL FURTHER, AS PER SUB - SECTION (5) OF SEC. 32 OF THE MIDC ACT, WHERE ANY LAND IS VESTED WITH THE STATE GOVERNMENT UNDER SUBSECTION (4) OF SEC. 32 OF THE MIDC ACT, THEN THE STATE GOVERNMENT MAY BY NOTICE IN WRITING ORDER ANY PERSON WHO MAY BE IN POSSESSION OF THE LAND TO SURRENDER OR DELIVER POSSESSION THEREOF TO THE STATE GOVERNMENT OR ANY PERSON DULY AUTHORIZED BY.IT IN THIS BEHALF WITHIN THIRTY DAYS OF THE SERVICE OF THE NOTICE. AS PER SUB - SECTION (7) OF SEC. 32 OF THE MIDC ACT, AFTER THE LAND HAD BEEN ACQUIRED FOR THE ASSESSEE CORPORATION OR ANY LOCAL AUTHORITY, THE STATE GOVERNMENT SHALL, AFTER IT HAS TAKEN POSSESSION THEREOF, BY NOTIFICATION IN THE OF FICIAL GAZETTE TRANSFER THE LAND TO THE ASSESSEE CORPORATION OR THAT LOCAL AUTHORITY, AS THE CASE MAY BE, FOR THE PURPOSE FOR WHICH IT WAS ACQUIRED AND THE PROVISIONS OF SEC. 43 - 1A OF THE MIDC ACT SHALL THEREAFTER BE APPLICABLE AS PER SEC 43 - 1A OF THE M1DC ACT, FOR THE FURTHERANCE OF THE ACT, THE STATE GOVERNMENT MAY BY NOTIFICATION IN THE OFFICIAL GAZETTE. UPON SUCH CONDITIONS AS MAY BE AGREED BETWEEN IT AND THE ASSESSEE CORPORATION, PLACE AT THE TATTERS DISPOSAL THE LANDS VESTED IN THE STATE GOVERNMENT. T HAT AFTER SUCH LAND IS DEVELOPED BY. OR UNDER THE CONTROL AND SUPERVISION OF THE ASSESSEE CORPORATION, IF SHALL BE DEALT WITH BY THE CORPORATION IN ACCORDANCE WITH THE REGULATIONS MADE, AND DIRECTIONS GIVEN BY THE STATE GOVERNMENT IN THIS BEHALF ON A PERUS AL OF SUB - SECTION (3) OF SEC 43 - 1A, IT EMERGES THAT IF ANY LAND PLACED AT THE DISPOSAL OF THE ASSESSEE CORPORATION UNDER SUB - SECTION (1) OF SEC. 43 - 1A IS REQUIRED AT ANY TIME THEREAFTER BY THE STATE GOVERNMENT, THE ASSESSEE CORPORATION SHALL REPLACE IT AT THE DISPOSAL OF THE STATE GOVERNMENT UPON SUCH TERMS AND CONDITIONS AS MAY BE MUTUALLY AGREED UPON. WE FURTHER FIND THAT AS PER SEC. 33 AND SEC. 36 OF THE M1DC ACT, WHERE ANY LAND IS ACQUIRED BY ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 18 THE STATE GOVERNMENT UNDER CHAPTER VI OF THE ACT, THE COMPENS ATION FOR ACQUISITION OF THE SAME SHALL BE PAID BY THE STATE GOVERNMENT UNDER THE SAID STATUTORY PROVISION STILL FURTHER, IN CASE THE COMPENSATION IS NOT PAID OR DEPOSITED ON OR BEFORE TAKING THE POSSESSION OF THE LAND, THEN AS PER SEC. 38 OF THE M1DC ACT THE STATE GOVERNMENT SHALL BE LIABLE TO PAY THE SAID AMOUNT ALONGWITH INTEREST DETERMINED AT THE RATE OF FOUR PERCENT PER ANNUM FROM THE DATE OF TAKING OF POSSESSION OF THE SAME TILL THE SAID AMOUNT IS PAID OR DEPOSITED. 14 WE FURTHER FIND FROM A PERUSAL O F SEC. 32 OF THE MIDC ACT THAT IN CASE THE STATE GOVERNMENT IS OF THE OPINION THAT ANY LAND IS REQUIRED FOR THE PURPOSE OF DEVELOPMENT BY THE ASSESSEE CORPORATION. OR FOR ANY OTHER PURPOSE IN FURTHERANCE OF THE OBJECTS OF THE SAID ACT, THEN AFTER PUTTING T HE OWNER OF THE LAND OR ANY OTHER PERSON INTERESTED THEREIN TO NOTICE AS REGARDS ITS DECISION OF ACQUIRING SUCH LAND, CALLING FOR HIS OBJECTIONS AND DISPOSING OFF THE SAME AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO SUCH PERSON, THE STATE GOVERNMENT S HALL ACQUIRE SUCH LAND BY PUBLISHING A NOTICE IN THE OFFICIAL GAZETTE. ON A PERUSAL OF SUB - SECTION (4) OF SEC 32 OF THE MIDC ACT, IT EMERGES THAT WHEN A NOTICE UNDER SEC. 32(1) OF THE ACT IS PUBLISHED IN THE OFFICIAL GAZETTE, THE LAND SHALL, ON AND FROM TH E DATE OF SUCH PUBLICATION, VEST ABSOLUTELY IN THE STATE GOVERNMENT FREE FROM ALL ENCUMBRANCES. STILL FURTHER, AS PER SUB - SECTION (5) OF SEC. 32 OF THE MIDC ACT, WHERE ANY LAND IS VESTED WITH THE STATE GOVERNMENT UNDER SUB - SECTION (4) OF SEC. 32 OF THE PAG EL 28 ITA NO. 4474/MUM/2017 A. Y 2011 - 12 MAHARASHTRA INDUSTRIAL DEVELOPMENT CORPORATION VS. DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTION) - 2(1) M1DC ACT, THEN THE STATE GOVERNMENT MAY BY NOTICE IN WRITING ORDER ANY PERSON WHO MAY BE IN POSSESSION OF THE LA ND TO SURRENDER OR DELIVER DRIVE HOME THEIR RESPECTIVE CLAIMS. IT IS THE CONTENTION OF THE ASSESSEE BEFORE US THAT ALL THE INDUSTRIAL LANDS ARE HELD BY THE ASSESSEE CORPORATION ON BEHALF OF THE STATE GOVERNMENT OF MAHARASHTRA. LT IS FURTHER CLAIMED THAT TH E ASSETS WHICH ARE OWNED BY THE ASSESSEE IN ITS OWN NAME VIZ. BUILDINGS AND OTHER ASSETS ARE SEPARATELY SHOWN IN ITS OWN NAME IN ITS 'BALANCE SHEET'. WE ARE OF THE CONSIDERED ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 19 VIEW THAT THE ISSUE AS TO IN WHAT STATUS THE LANDS UNDER CONSIDERATION WERE HELD BY THE ASSESSEE CORPORATION CAN BE APPRECIATED IN THE BACKDROP OF THE SCHEME OF THE 'MAHARASHTRA INDUSTRIAL DEVELOPMENT CORPORATION ACT. 1961' [FOR SHORT 'MIDC ACT']. WE FIND FROM A PERUSAL OF THE MIDC ACT THAT THE ASSESSEE CORPORATION VIZ. MIDC HAD BEEN E STABLISHED FOR SECURING AND ASSISTING RAPID AND ORDERLY ESTABLISHMENT AND ORGANIZATION OF INDUSTRIES IN INDUSTRIAL AREAS AND INDUSTRIAL ESTATES IN THE STATE OF MAHARASHTRA. ON A PERUSAL OF SEC. 3(2) OF THE M1DC ACT, IT EMERGES THAT THE ASSESSEE CORPORATION VII MIDC IS COMPETENT TO ACQUIRE, HOLD AND DISPOSE OFF PROPERTY, BOTH MOVEABLE AND IMMOVABLE, AND TO CONTRACT AND DO ALL THINGS NECESSARY FOR THE PURPOSES OF THE ACT. STILL FURTHER, A PERUSAL OF THE FUNCTIONS OF THE ASSESSEE CORPORATION AS CONTEMPLATED IN SEC. 140 OF THE M1DC ACT REVEALS THAT THE SAME PARTICULARLY INCLUDES VIZ. (O. ESTABLISHING AND MANAGING INDUSTRIAL ESTATES AT PLACES SELECTED BY THE STATE GOVERNMENT: (II). DEVELOPING INDUSTRIAL AREAS SELECTED BY THE STATE GOVERNMENT FOR THE PURPOSE AND M AKE THEM AVAILABLE FOR UNDERTAKINGS TO ESTABLISH THEMSELVES: AND (III). UNDERTAKING SCHEMES OR WORKS, EITHER JOINTLY WITH OTHER CORPORATE BODIES OR INSTITUTIONS, OR WITH GOVERNMENT OR LOCAL AUTHORITIES, OR ON AN AGENCY BASIS, IN FURTHERANCE OF THE PURPOSE FOR WHICH THE ASSESSEE CORPORATION IS ESTABLISHED AND ALL MATTERS CONNECTED THEREWITH. STILL FURTHER, THE ASSESSEE CORPORATION AS PROVIDED IN SEC. 15 OF THE M1DC ACT INTERALLA STANDS VESTED WITH THE POWERS VIZ. (I). TO ACQUIRE AND HOLD SUCH PROPERTY. BOTH MOVABLE AND IMMOVABLE AS THE ASSESSEE CORPORATION MAY DEEM NECESSARY FOR THE PERFORMANCE OF ANY OF ITS ACTIVITIES AND TO LEASE, SELL, EXCHANGE OR OTHERWISE TRANSFER ANY PROPERTY HELD BY IT ON SUCH CONDITIONS AS MAY BE DEEMED PROPER BY IT; (II). TO PURCHASE BY AGREEMENT OR TO TAKE ON LEASE OR UNDER ANY FORM OF TENANCY ANY LAND, TO ERECT SUCH BUILDINGS AND TO EXECUTE SUCH OTHER WORKS AS MAY BE NECESSARY FOR THE PURPOSE OF CARRYING OUT ITS DUTIES AND FUNCTIONS: TO PROVIDE OR CAUSE TO BE PROVIDED AMENITIES AND COMMON FACILITIES IN INDUSTRIAL ESTATES AND INDUSTRIAL AREAS AND CONSTRUCT AND MAINTAIN OR CAUSE TO BE MAINTAINED WORKS AND BUILDINGS THEREOF; (IV) TO MAKE AVAILABLE ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 20 BUILDINGS ON HIRE OR SALE TO INDUSTRIALISTS OR PERSONS INTENDING TO START INDUSTRIAL UNDER TAKINGS; (V). TO CONSTRUCT BUILDINGS FOR THE HOUSING OF THE EMPLOYEES OF SUCH INDUSTRIES: (VI). TO ALLOT FACTORY SHEDS OR SUCH BUILDINGS OR PARTS OF BUILDINGS, INCLUDING RESIDENTIAL TENEMENTS TO SUITABLE PERSONS IN THE INDUSTRIAL ESTATES ESTABLISHED OR DEV ELOPED BY THE ASSESSEE CORPORATION; AND (VIE). TO MODIFY OR RESCIND SUCH ALLOTMENTS. INCLUDING THE RIGHT AND POWER TO EVICT THE ALLOTTEES CONCERNED ON BREACH OF ANY OF THE TERMS OR CONDITIONS OF THEIR ALLOTMENT. WE FIND FROM A PERUSAL OF THE AFOREMENTIONED FUNCTIONS AND POWERS OF THE ASSESSEE CORPORATION THAT IN FURTHERANCE OF ITS OBJECT OF ESTABLISHING AND DEVELOPING INDUSTRIAL ESTATES AND INDUSTRIAL AREAS SELECTED BY THE STATE GOVERNMENT FOR THE SAID PURPOSE, THE ASSESSEE CORPORATION SUBJECT TO THE PROVIS IONS OF THE M1DC ACT IS VESTED WITH THE POWERS OF ACQUIRING AND HOLDING PROPERTY AND LEASING, SELLING, EXCHANGING OR TRANSFERRING THE SAME ON SUCH CONDITIONS AS IT MAY DEEM FIT, AS WELL AS PURCHASING OR TAKING ON LEASE OR UNDER ANY FORM OF TENANCY ANY LAND , ERECT BUILDINGS ON THE SAME AND MAKE THE SAME AVAILABLE ON HIRE OR SALE TO INDUSTRIALISTS OR PERSONS INTENDING TO START INDUSTRIAL UNDERTAKINGS. STILL FURTHER, THE ASSESSEE CORPORATION AS PER SEC. 17 OF THE MIDC ACT ALSO STANDS VESTED WITH THE POWER TO L EVY FEES OR SERVICE CHARGES FOR PROVIDING AMENITIES OR COMMON FACILITIES VIZ. MAINTENANCE OF ROADS, DRAINAGE, WATER SUPPLY, PROVIDING OF STREET LIGHTING ETC IN SUCH INDUSTRIAL ESTATES AND INDUSTRIAL AREAS ON THE PLOT HOLDERS OR OTHER PERSONS RECEIVING BENE FIT OF SAID SERVICES OR AMENITIES. FURTHER, PERUSAL OF SEC. 19 OF THE M1DC ACT REVEALS THAT THE PROPERTY, FUND AND OTHER ASSETS VESTING IN THE ASSESSEE CORPORATION SHALL BE HELD AND APPLIED BY IT. SUBJECT TO THE PROVISIONS AND THE PURPOSES OF THE SAID ACT. DURING THE YEAR UNDER CONSIDERATION THERE IS NEITHER ANY FACTUAL CHANGE NOR ANY LEGAL CHANGE, THEREFORE, FOLLOWING JUDGEMENT OF HON'BLE ITAT IN APPELLANT'S OWN CASE FOR AN. 2011 - 12, APPEAL OF THE ASSESSEE IS, ALLOWED. 10. GROUND NO. 30: VIDE THIS GROUND A PPELLANT HAS AGITATED AGAINST NON ALLOWABILITY OF DEPRECIATION AS APPLICATION OF INCOME CLAIMED BY THE ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 21 APPELLANT. DURING THE COURSE OF APPELLATE PROCEEDING IT WAS SUBMITTED THAT IDENTICAL ISSUE AROSE BEFORE THE CIT(A) IN APPELLANT'S OWN CASE FOR AN. 2007 - 0 8. THE CIT(A) ALLOWED THE GROUND OF APPEAL OF THE APPELLANT FOLLOWING THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. INSTITUTE OF BANKING PERSONNEL 264 ITR 110. THE DEPARTMENT FILED AN APPEAL BEFORE HONBLE ITAT AGAINST THE ORDER OF T HE CIT(A). THE ITAT DISMISSED THE GROUND OF APPEAL BY THE REVENUE WITH THE FOLLOWING OBSERVATIONS: 5. AFTER HEARING THE RIVAL SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THE ISSUE IS COVERED SQUARELY IN FAVOUR OF THE ASSESSEE BY THE DECIS ION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. INSTITUTE OF BANKING PERSONNEL AND SELECTION (SUPRA) WHICH HAS BEEN FOLLOWED BY THE LD. CIT(A) WHILE ALLOWING THE APPEAL OF THE ASSESSEE. THE LD CIT(A) ALSO REFERRED TO THE DECISION OF DIRECTOR OF INCOME TAX (EXEMPTION), MUMBAI VS. VILE PARLE KELAVANI MANDEL (2015) 58 TAXMANNCOM 288 WHEREIN THE HONBLE BOMBAY HIGH COURT HAS HELD THAT THE DEPRECIATION CLAIMED IS TOWARDS THE USE OF ASSETS AND COULD NOT BE TAKEN TO MEAN AS DOUBLE DEDUCTION FIRST BY WA Y OF ALLOWING THE SAME AS APPLICATION OF INCOME AND SECONDLY BY WAY OF DEPRECIATION ON THE SAID AMOUNT OF FIXED ASSET. WE. THEREFORE, FIND NO INFIRMITY IN THE ORDER OF LD. C1T(A) AND ARE INCLINED TO AFFIRM THE SAME BY DISMISSING THE GROUNDS RAISED BY THE R EVENUE. ACCORDINGLY, THE GROUND NOS 1. 2 & 3 ARE DISMISSED RESPECTFULLY FOLLOWING JUDGEMENT OF HON'BLE ITAT IN APPELLANTS OWN CASE FOR A.Y. 2007 - 08 IN ITA NO. 4104/M/2017, APPEAL OF THE ASSESSEE ON THIS GROUND IS. ALLOWED. 11. GROUND NO. 31 VIDE THIS GROUN D. APPELLANT HAD CLAIMED ALLOWABILITY OF CARRY FORWARD OF DEFICIT AND ALLOWING THE SET OFF AGAINST THE INCOME OF THE SUBSEQUENT YEARS. DURING THE COURSE OF APPELLATE PROCEEDING, IT WAS CLAIMED THAT IDENTICAL ISSUE AROSE BEFORE THE ITAT IN ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 22 THE APPELLANT'S O WN CASE FOR A.Y. 2007 - 08 [ITA 4101/MUM/20171 WHEREIN THE ITAT ALLOWED THE APPEAL OF THE APPELLANT WITH THE FOLLOWING OBSERVATIONS: - 6. THE SECOND ISSUE RAISED BY THE REVENUE FROM GROUND NO.4 TO 6 IS AGAINST THE DECISION OF LD. CIT(A) CHALLENGING THE CARRY FORWARD OF DEFICIT OF RS.40,45,02.295/ - AND ALLOWING THE SET OFF AGAINST THE INCOME OF THE SUBSEQUENT YEARS. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE LD. C1T(A) HAS ALLOWED THE APPEAL O F THE ASSESSEE BY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL BOMBAY HIGH COURT IN THE CASE OF C1T VS INSTITUTE OF BANKING POSSESSION THEREOF TO THE STATE GOVERNMENT OR ANY PERSON DULY AUTHORISED BY IT IN THIS BEHALF WITHIN THIRTY DAYS OF THE SERV ICE OF THE NOTICE. AS PER SUB - SECTION (7) OF SEC. 32 OF THE M1DC ACT, AFTER THE LAND HAD BEEN ACQUIRED FOR THE ASSESSEE CORPORATION OR ANY LOCAL AUTHORITY, THE STATE GOVERNMENT SHALL, AFTER IT HAS TAKEN POSSESSION THEREOF, BY NOTIFICATION IN THE OFFICIAL GAZETTE TRANSFER THE LAND TO THE ASSESSEE CORPORATION OR THAT FOCAL AUTHORITY, AS THE CASE MAY BE. FOR THE PURPOSE FOR WHICH IT WAS ACQUIRED AND THE PROVISIONS OF SEC. 43 - 1A OF THE M1DC ACT SHALL THEREAFTER BE APPLICABLE. AS PER SEC. 43 - 1A OF THE MIDC ACT, FOR THE FURTHERANCE OF THE ACT, THE STATE GOVERNMENT MAY BY NOTIFICATION IN THE OFFICIAL GAZETTE, UPON SUCH CONDITIONS AS MAY BE AGREED BETWEEN IT AND THE ASSESSEE CORPORATION, PLACE AT THE TATTERS DISPOSAL THE LANDS VESTED IN THE STATE GOVERNMENT. THAT A FTER SUCH LAND IS DEVELOPED BY, OR UNDER THE CONTROL AND SUPERVISION OF THE ASSESSEE CORPORATION. IT SHALL BE DEALT WITH BY THE CORPORATION IN ACCORDANCE WITH THE REGULATIONS MADE: AND DIRECTIONS GIVEN BY THE STATE GOVERNMENT IN THIS BEHALF. ON A PERUSAL O F SUB - SECTION (3) OF SEC. 43 - 1A. IT EMERGES THAT IF ANY LAND PLACED AT THE DISPOSAL OF THE ASSESSEE CORPORATION UNDER SUB - SECTION (1) OF SEC. 43 - 1A IS REQUIRED AT ANY TIME THEREAFTER BY THE STATE GOVERNMENT. THE ASSESSEE CORPORATION SHALL REPLACE IT AT THE DISPOSAL OF THE STATE GOVERNMENT UPON ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 23 SUCH TERMS AND CONDITIONS AS MAY BE MUTUALLY AGREED UPON. WE FURTHER FIND THAT AS PER SEC 33 AND SEC. 36 OF THE M1DC ACT, WHERE ANY LAND IS ACQUIRED BY THE STATE GOVERNMENT UNDER CHAPTER VI OF THE ACT. THE COMPENSATIO N FOR ACQUISITION OF THE SAME SHALL BE PAID BY THE STATE GOVERNMENT UNDER THE SAID STATUTORY PROVISION. STILL FURTHER, IN CASE THE COMPENSATION IS NOT PAID OR DEPOSITED ON OR BEFORE TAKING THE POSSESSION OF THE LAND, THEN AS PER SEC. 38 OF THE M1DC ACT THE STATE GOVERNMENT SHALL BE LIABLE TO PAY THE SAID AMOUNT ALONGWAH INTEREST DETERMINED AT THE RATE OF FOUR PERCENT PER ANNUM FROM THE DATE OF TAKING OF POSSESSION OF THE SAME TILL THE SAID AMOUNT IS PAID OR DEPOSITED. 15 WE ARE OF THE CONSIDERED VIEW THAT A BARE PERUSAL OF THE SCHEME OF THE MIDC ACT, AND THE ABSENCE OF ANY INSTRUMENT OF TRANSFER EVIDENCING VESTING OF THE OWNERSHIP OF THE LAND IN FAVOUR OF THE ASSESSEE CORPORATION, BOTH MILITATES AGAINST THE OBSERVATIONS OF THE LOWER AUTHORITIES THAT THE OWNE RSHIP OF THE LAND HAD BEEN TRANSFERRED TO ASSESSEE CORPORATION. WE THUS, IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS ARE OF THE CONSIDERED VIEW THAT AS NEITHER THERE IS ANY MATERIAL BORNE FROM RECORD. NOR ANY DOCUMENTARY EVIDENCE HAD BEEN FURNISHED BEFOR E US BY THE REVENUE WHICH COULD IRREFUTABLY DISLODGE THE CLAIM OF THE ASSESSEE AND THEREIN PERSUADE US TO CONCLUDE THAT EITHER THE OWNERSHIP OF THE LAND UNDER CONSIDERATION HAD BEEN TRANSFERRED TO THE ASSESSEE CORPORATION. OR THE LATTER COULD JUSTIFIABLY B E HELD AS A 'DEEMED OWNER OF THE SAME FOR THE PURPOSE OF JUSTIFYING ASSESSING OF THE INCOME ARISING THERE FROM VIZ LEASE PREMIUMS, RENT, INTEREST INCOME ON FUNDS PARKED AS DEPOSITS WITH THE BANK ETC., AS THE INCOME OF THE ASSESSEE CORPORATION, HENCE THE SA ID CLAIM OF THE REVENUE FAILS AND IS THUS REJECTED. THE GROUNDS OF APPEAL NOS. 1, 4, 5, 7, 8 AND 14 ARE ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS.' IN THE PRESENT APPEAL. THE APPELLANT RELIED UPON THE ABOVE OBSERVATIONS OF THE HON'BLE ITA TIN THE ORD ER IN ITS OWN CASE FOR A. Y. 2011 - 12 AND CONTENDED THAT THE ASSESSEE IS ACTING AS AN AGENT OF THE GOVERNMENT OF ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 24 MAHARASHTRA AND THUS, THE INCOME IN QUESTION IN THE FORM OF LEASE PREMIUM, RENT, INTEREST ON BANK DEPOSITS, ETC DOES NOT BELONG TO THE ASSESSEE BUT TO THE GOVERNMENT OF MAHARASHTRA, I FIND THAT THE ABOVE JUDGMENT OF THE IT/IT FOR A. Y 2011 - 12 WOULD EQUALLY APPLY TO THE FACTS OF THE SUBJECT YEAR THERE IS NO CHANGE IN FACTS CONSIDERED BY THE HONBLE ITAT FOR A. V 2011 - 12 AND FACTS FOR THE YEAR IN AP PEAL. THEREFORE, RESPECTFULLY FOLLOWING THE ORDER OF THE HONBLE 1TAT FOR A. V. 2011 - 12, THE APPEAL IS ALLOWED ON GROUND 1 AND 3 RAISED IN APPEAL PERSONNEL AND SELECTION (SUPRA). WE FURTHER NOTE THAT IN ASSESSEE'S OWN CASE THE ISSUE HAS BEEN SETTLED IN FAV OUR OF THE ASSESSEE BY THE DECISION OF THE HON'BLE JURISDICTIONAL BOMBAY HIGH COURT IN VARIOUS EARLIER ASSESSMENT YEARS IN 1TA NO 2651 OF 2011 FOR A. Y. 2004 - 05. (TA NO.2652 OF 2011 FOR A. Y. 2005 - 06 AND 1TA NO.288 OF 2016 FOR A. Y. 2007 - 08. WE. THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CT(A) AND ACCORDINGLY AFFIRM THE SAME BY DISMISSING THE GROUND NOS 4 TO 6 OF THE REVENUE RESPECTFULLY FOLLOWING JUDGEMENT OF HON'BLE ITAT IN APPELLANT'S OWN CASE APPEAL OF THE ASSESSEE ON THIS GROUND IS. A LLOWED 12. GROUND NO. 32 : VIDE THIS GROUND APPELLANT HAS CHALLENGED THE LEVY OF INTEREST U/S.234B AND 234C OF THE ACT CHARGING OF INTEREST IS MANDATORY AS PER PROVISION OF LAW. HOWEVER. AO IS DIRECTED TO RECOMPUTED THE INTEREST LIABILITY AFTER GIVING A PPEAL EFFECT OF THIS ORDER. IN THE RESULT APPEAL IS. ALLOWED. 6. AFTER GOING THROUGH THE FINDING OF THE CIT(A) MENTIONED ABOVE, IT IS APPARENT ON RECORD THAT THE CIT(A) HAS DECIDED THE ABOVE MENTIONED GROUNDS IN FAVOUR OF THE ASSESSEE ON THE BASIS OF THE FINDING OF THE HONBLE ITAT IN THE ASSESSEES OWN CASE FOR THE A.Y.2011 - 12 BEARING ITA. NO. 6552/MUM /2014. NOTHING CAME INTO NOTICE THAT THE FINDING HAS BEEN CHANGED OR VARIED BY ANY APPELLATE COURT. THE FACTS ARE NOT DISTINGUISHABLE AT THIS STAGE. SINCE T HE ISSUES HAVE BEEN DECIDED BY CIT(A) IN FAVOUR OF THE ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 25 ASSESSEE ON THE BASIS OF THE FINDING OF THE HONBLE ITAT IN THE ASSESSEES OWN CASE (SUPRA), THEREFORE, WE ARE OF THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY JUDICIOUSLY AND CORRECTL Y WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ACCORDINGLY, THESE ISSUES ARE DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ISSUE NO. 11 7 . ISSUE NO. 11 IS IN CONNECTION WITH THE CLAIM OF THE DEPRECIATION WHICH HAS BEEN ALLOWED BY THE CIT(A) ON THE BASIS OF THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. INSTITUTE OF BANKING PERSONNEL 264 ITR 110. THE FACTS ARE QUITE SIMILAR . N OTHING ADVERSE HAS BEEN SHOWN. NOTHING CAME INTO NOTICED THAT THE CLAIM OF THE ASSESSE E IN CONNECTION WITH THE DEPRECIATION HAS WRONGLY BEEN ALLOWED, THEREFORE, IN THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE FINDING IN CONNECTION WITH THE ISSUE NO.11 IS ALSO QUITE CORRECT WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE ST AGE. ACCORDINGLY, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ISSUE NOS. 13 & 14 8. ISSUE NOS. 13 & 14 ARE FORMAL IN NATURE WHICH IS NOT REQUIRED TO BE ADJUDICATION. IN THE RESULT, APPEAL FILED BY THE REVENUE IS HEREBY DISMISSED. ITA. NO. 3433 /M UM /201 9 9. THE ASSESSEE HA S FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 07 . 0 2 .201 9 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 04 , ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 26 MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 2015 - 1 6 . 10. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THAT THE ASSESSEE CORPORATION IS UNDERTAKING COMMERCIAL ACTIVITIES AND THEREFORE, ITS ACTIVITIES WOULD NOT BE REGARDED AS CHARI TABLE ACTIVITIES WITHIN THE MEANING OF SECTION 2(15) OF THE I.T. ACT, 1961. 11 . THE FACT OF THE PRESENT CASE IS QUITE SIMILAR TO THE FACTS OF THE CASE MENTION ED ABOVE IN BEARING ITA. NO.3354 /MUM/2019, THEREFORE, THERE IS NO NEED TO REPEAT THE SAME. ISSUE NO . 1 12. UNDER THIS ISSUE THE ASSESSEE HAS CHALLENGED THE OBSERVATIONS MADE BY THE AO THAT THE ASSESSEE TRUST IS UNDERTAKING COMMERCIAL ACTIVITIES AND THEREFORE ITS ACTIVITIES COULD NOT BE REGARDED AS CHARITABLE ACTIVITIES WITHIN THE MEANING OF SECTION 2(15) OF THE ACT. BEFORE GOING FURTHER, WE DEEM IT NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON THIS ISSUE.: - 8. GROUND NO. 5 VIDE THIS GROUND, APPELLANT HAD CHALLENGED THE OBSERVATIONS MADE BY THE LD. AO THAT THE ASSESSEE TRUST WAS UNDERTAKING COMMER CIAL ACTIVITIES AND COMMERCE AND ACCORDINGLY HIT BY THE PROVISO TO SECTION 2(15) OF THE ACT. THE LD. AR OF THE APPELLANT FAIRLY CONCEDED THAT THE GROUNDS RAISED BY THE APPELLANT HAD BEEN DECIDED AGAINST THE APPELLANT BY HON'BLE ITAT IN ITS OWN CASE FOR THE A.Y. 2010 - 11. THE RELEVANT PART OF THE HONBLE ITAT ORDER IS REPRODUCED AS UNDER: THE PRESENT DAY SCENARIO WOULD SHOW THAT THE PRIVATE ENTREPRENEURS ARE DEVELOPING MANY SPECIAL ECONOMIC ZONES ALL OVER THE COUNTRY HENCE, IN ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 27 THE PRESENT DAY SCENARIO, THE AC TIVITIES OF THE ASSESSEE AND THE PRIVATE ENTREPRENEURS STAND ON SAME FOOTING. THERE CANNOT BE ANY DISPUTE THAT THE ACTIVITY OF SETTING UP/DEVELOPING INDUSTRIAL ESTATES AND MAINTAINING THE INFRASTRUCTURE FACILITIES BY THE PRIVATE ENTREPRENEURS IS CONSIDERED AS 'BUSINESS ACTIVITY'. SINCE THE ACTIVITY CARRIED ON BY THE ASSESSEE IS NO DIFFERENT FROM THAT ONE CARRIED ON BY THE PRIVATE ENTREPRENEURS, IN OUR VIEW, THE ACTIVITY CARRIED ON BY THE ASSESSEE SHOULD ALSO BE CONSIDERED TO BE 'BUSINESS ACTIVITY' ONLY HENC E, THE ACTIVITY CARRIED ON BY THE ASSESSEE, IN OUR VIEW, WOULD BE HIT BY THE PROVISO TO SEC. 2(15) OF THE ACT. 28. THE LD AO INVITED OUR ATTENTION TO THE VARIOUS PROVISIONS OF MID ACT TO CONTEND THAT THE ASSESSEE IS CARRYING ON ITS OPERATIONS IN ACCORDANCE WITH THE DIRECTIONS ISSUED BY THE SLATE GOVERNMENT HE FURTHER SUBMITTED THAT THE LANDS VESTED WITH THE ASSESSEE CAN ALSO BE TAKEN BACK BY THE STATE GOVERNMENT. ACCORDINGLY, HE CONTENDED THAT THE ACTIVITIES OF THE ASSESSEE CANNOT BE CONSIDERED TO BE A BUSI NESS ACTIVITY, SINCE IT IS ACTING IN ACCORDANCE WITH THE DIRECTIONS ISSUED BY THE STATE GOVERNMENT. IN OUR VIEW, THE CONTROL OR DIRECTIONS ISSUED BY THE STATE GOVERNMENT WOULD NOT CHANGE THE CHARACTER OF 'BUSINESS ACTIVITY' WE ARE OF THE VIEW THAT THE ACTI VITY CARRIED ON BY THE ASSESSEE SHOULD BE EXAMINED INDEPENDENTLY AND THE FACT THAT THE ASSESSEE IS BEING REGULATED BY THE STATE GOVERNMENT WOULD NOT MAKE ANY DIFFERENCE. IN OUR VIEW 'OWNERSHIP' OF THE CORPORATION AND 'ACTIVITIES' OF THE CORPORATION ARE TWO DIFFERENT ASPECTS AND THE OWNERSHIP CANNOT BE CONSIDERED OR TAKEN INTO ACCOUNT TO DETERMINE THE CHARACTER OR NATURE OF THE ACTIVITIES CARRIED ON BY THE CORPORATION. RESPECTFULLY FOLLOWING JUDGEMENT OF HON'BLE ITAT IN APPELLANT'S OWN CASE AS DIS4OVE APPEAL OF THE ASSESSEE ON THIS IS DISMISSED. 13. ON APPRAISAL OF THE ABOVE MENTIONED FINDING, IT IS QUITE CLEAR THAT THIS ISSUE HAS BEEN DECIDED AGAINST THE ASSESSEE ON THE BASIS OF THE DECISION OF HONBLE ITAT IN THE ASSESSEES OWN CASE FOR THE A.Y.2010 - 11 BEA RING ITA NO .3354 /MUM/201 9 3 43 3 /M/201 9 A.Y . 201 5 - 1 6 28 ITA. NO. ITA. NO. 6552/MUM/2014. THE FACTS ARE NOT DISTINGUISHABLE AT THIS STAGE. SINCE THE ISSUE HAS DULY COVERED BY THE DECISION OF HONBLE ITAT IN THE ASSESSEES OWN CASE (SUPRA) , THEREFORE, THIS ISSUE IS BEING DECIDED IN FAVOUR OF THE REVENUE AGAI NST THE ASSESSEE. 1 4 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY DISMISSED AND THE APPEAL FILED BY THE REVENUE IS HEREBY DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 09 /07 /20 2 1 SD/ - SD/ - ( PRAMOD KUMAR ) (AMARJIT SINGH) / VICE PRESIDENT /JUDICIAL MEMBER MUMBAI; D ATED : 09 /07 /20 21 V IJAY PAL SINGH / SR. P.S. / COPY OF THE ORDER FORWARDED TO : 1. / T HE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR ) , / ITAT, MUMBAI