The ACIT,GNR Circle, Gandhinagar V. Gujarat State Road Development Corpn. Ltd., Gandhinagar

ITA 417/AHD/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9575 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 14-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P VAISHNAV

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD .. , ( .) , ! BEFORE SHRI BEFORE SHRI G.D. AGARWAL,VICE PRESIDEN T (AZ) AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO. 417/AHD/2012 ( / ASSESSMENT YEAR : 2008-09) ASST.CIT GANDHINAGAR CIRCLE GANDHINAGAR / VS. GUJARAT STATE ROAD DEVELOPMENT CORPN.LTD. NIRMAN BHAVAN SECTOR-10A GANDHINAGAR-3820 10 % & ./ ./ PAN/GIR NO. : AACFG 5706 B ( %( / APPELLANT ) .. ( )*%( / RESPONDENT ) %(+ / APPELLANT BY : SHRI O.P. VAISHNAV, CIT-DR )*%(,+ / RESPONDENT BY : -NONE- - ., /& / DATE OF HEARING 27/05/2015 0123 , /& / DATE OF PRONOUNCEMENT 29/05/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-GANDHINAGAR, (CIT(A) IN SHORT) DATED 15/11/2011 PERTAINING TO ASSESSMENT Y EAR (AY) 2008-09. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL:- 1. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND ON FA CTS IN DELETING THE ADDITION OF RS.38,63,38,000/- MADE BY THE A.O. ON ACCOUNT OF ITA NO.417/AHD/ 2012 ACIT VS. GUJ.STATE ROAD DEVELOPMENT CORP.LTD. ASST.YEAR 2008-09 - 2 - UNSPENT GRANT EVEN THOUGH THE ASSESSEE HAS FULL AUT HORITY TO PLAN AND UTILIZE THE GRANTS FOR DIFFERENT PROJECTS AND T HUS THE SAME ARE IN THE NATURE OF RECEIPTS IN THE HANDS OF THE ASSESSEE . 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.C IT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEARNE D CIT(APPEALS) MAY BE SET ASIDE AND THAT OF THE A.O. BE RESTORED T O THE ABOVE EXTENT. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE A SSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 09/12/2010, THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE ADDITION OF RS.38,63,38,000/- ON ACCOUNT OF UNSPENT GRANT FOR DIFFERENT PROJECTS. AGAINST THE SAID ASSESSMENT ORDER, THE A SSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DELETED THE SAID ADDITION. AGGRIEVE D BY THE ORDER OF THE LD.CIT(A), NOW THE REVENUE IS IN APPEAL BEFORE US. 3. APROPOS TO GROUND NO.1 OF REVENUES APPEAL, THE LD.CIT-DR SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT TH E LD.CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. 3.1. NONE APPEARED ON BEHALF OF THE RESPONDENT-ASSE SSEE. HOWEVER, A LETTER DATED 26/05/2015 IS PLACED ON RECORD. THE R ELEVANT CONTENTS OF THE LETTER READ AS UNDER:- ITA NO.417/AHD/ 2012 ACIT VS. GUJ.STATE ROAD DEVELOPMENT CORP.LTD. ASST.YEAR 2008-09 - 3 - WE WOULD LIKE TO BRING THE KIND NOTICE OF THE HON. TRIBUNAL THAT THE ONLY GROUND OF APPEAL FILED BY THE DEPT. IS REGARDI NG DELETION OF THE ADDITION OF RS.38,63,38,000/- BY THE ID. CIT(A) THE ADDITION WAS MADE BY THE ID. AO ON A/C. OF UN-SPENT GRANT FOR DIFFERE NT PROJECTS. THE ID. CIT(A) HELD THAT THE UNUTILIZED GRANT CANNOT BE CON SIDERED AS INCOME FOLLOWING THE AHMEDABAD ITAT DECISION IN THE CASE O F GUJARAT SAFAI KAMDAR VIKAS NIGAM AND ALSO RELYING ON THE DECISION OF JURISDICTIONAL GUJARAT HIGH COURT IN THE CASE OF GUJARAT MUNICIPAL FINANCE BOARD V/S. DCIT 221ITR 317. 4. WE HAVE HEARD THE LD.CIT-DR, PERUSED THE MATERIA L AVAILABLE ON RECORD AND GONE THROUGH THE CONTENTS OF THE LETTER FILED BY THE ASSESSEE. WE FIND THAT THE AO MADE ADDITION ON ACCOUNT OF UNS PENT GRANT RECEIVED BY THE ASSESSEE FROM THE GOVERNMENT. HOWEVER, THE LD.CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER:- 4.2 I HAVE GONE THROUGH THE FACTS OF THE CASE, SUBMISSIONS OF THE APPELLANT AS WELL AS ORDER OF THE HON'BLE UAT, AHME DABAD BENCH IN THE CASE OF GUJARAT SAFAI KAMDAR VIKAS NIGAM VS. AC IT, GANDHINAGAR CIRCLE, GANDHINAGAR (ITA NO. 3232/AHD/2008, ORDER D ATED 17/04/2009, AND GUJARAT STATE DISASTER MANAGEMENT AUTHORITY VS. ACIT, GANDHINAGAR CIRCLE, GANDHINAGAR, ITA NO. 949/AHD/20 09, ORDER DATED 05/06/2006. THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THE AB OVE REFERRED TWO JUDGMENTS OF HON'BLE ITAT, AHMEDABAD. IT HAS TO BE NOTED THAT THE ENTIRE FUNDS OF GSRDC HAVE BEEN RECEIVED AS GRANTS FOR APPLICATION AS DESIRED BY THE GOVERNMENT AND NO OTHER PURPOSE. IT MAY BE PERTINENT HERE TO NOTE THAT IN CASE THE SAID AMOUNT IS DIRECT ED TO BE REFUNDED BY THE STATE GOVERNMENT, THE APPELLANT HAS TO RETURN T HE AMOUNT BACK TO THE GOVERNMENT AND THEREFORE RIGHTLY TREATED AS LIABILI TY. OTHERWISE THE FUND IS RETAINED BY APPELLANT AS TRUSTEE FOR SPECIFIC AP PLICATION. THE GRANTS RECEIVED ARE TO BE UTILIZED AS PER THE SPECIFIC GUI DELINES GIVEN BY THE ITA NO.417/AHD/ 2012 ACIT VS. GUJ.STATE ROAD DEVELOPMENT CORP.LTD. ASST.YEAR 2008-09 - 4 - GOVERNMENT AND THE APPELLANT HAS TO STRICTLY ADHERE TO THE GUIDELINES GIVEN AND CANNOT DEVIATE FROM IT. IT CANNOT UTILIZE OR HOLD THE GRANT FOR ITS OWN USE OR ANY OTHER PURPOSE. THE HONBLE ITAT, AHMEDABAD, IN THE CASE OF GUJARAT SAFAI KAMDAR VIKAS NIGAM HAS HELD IN PARA. NO. 18.8 AS UNDER: IN VIEW OF THE ABOVE DISCUSSIONS, WE HOLD THAT THE AMOUNT OF RS.8.97 CRORES GRANT GIVEN UNDER 'THAKKAR BAPA REHA BILITATION GRANT' IS NOT ANY INCOME IN THE HANDS OF THE ASSESS EE AS THE ASSESSEE IS MERELY A NODAL AGENCY TO IMPLEMENT CERT AIN SOCIAL SCHEMES OF THE GOVERNMENT OF GUJARAT AND FOR SUCH S PECIFIC PURPOSES THE ASSESSEE IS ENTRUSTED WITH SUCH AMOUNT . AS PER THE RESOLUTION DATED 9/12/2000 OF THE GOVERNMENT OF GUJ ARAT AND AS ALSO CLARIFICATORY LETTER DATED 17/3/2008 OF THE GO VERNMENT OF GUJARAT REFERRED TO ABOVE, IT IS CLEAR THAT THE NAT URE OF THE AMOUNT IS NOT A CONTRIBUTION OR REVENUE RECEIPT BUT IS ONLY A GRANT FOR IMPLEMENTATION OF A PARTICULAR SCHEME AS NODAL AGENCY. IT IS ALSO RELEVANT TO STATE THAT THE UNSPE NT AMOUNT OF SUCH GRANT REMAINS THE PROPERTY OF THE GOVERNMENT A ND HAS TO BE RETURNED TO THE GOVERNMENT AS AND WHEN DEMANDS. THE DECISIONS RELIED UPON BY SHRI M.G. PATEL, LEARNED COUNSEL FOR THE ASSESSEE ALSO SUPPORT THE VIEW TAKEN BY US. FURTHERMORE, TRE ATMENT OF SUCH GRANT AS LIABILITY OF THE ASSESSEE COMPANY HAS BEEN ACCEPTED BY THE STATUTORY AUDITORS OF THE ASSESSEE COMPANY AS WELL AS BY THE COMPTROLLER & AUDITOR GENERAL OF IND IA IN THEIR AUDIT REPORTS. THUS, THERE WAS NO QUESTION OF ADDIN G THE AMOUNT TO THE INCOME OF THE ASSESSEE, WHO IS MERELY A NODA L AGENCY TO IMPLEMENT CERTAIN SOCIAL BENEFICIARY SCHEMES OF THE GOVERNMENT. IN THAT VIEW OF THE MATTER WE HOLD THAT THE GRANT O F RS.8.97 CRORES RECEIVED FROM THE GOVERNMENT OF GUJARAT BY T HE ASSESSEE BE TREATED AS NOT INCLUDIBLE IN THE INCOME OF THE A SSESSEE AND IS EXEMPT U/S.11(1)(D) READ WITH SECTION 12(1) OF THE ACT. GROUND NO.2 OF THE APPEAL IS ALLOWED.' 4.3 FURTHER, HONBLE ITAT IN THE CASE OF GUJARA T STATE DISASTER MANAGEMENT AUTHORITY VS. ACIT, GANDHINAGAR CIRCLE, GANDHINAGAR, ITA NO.417/AHD/ 2012 ACIT VS. GUJ.STATE ROAD DEVELOPMENT CORP.LTD. ASST.YEAR 2008-09 - 5 - ITA NO. 949/AHD/2009, HAS ALSO TAKEN THE SAME VIEW. THE APPELLANT VIZ. GSRDC IS ALSO ACTING AS A NODAL AGENCY / FACILITATI NG AGENCY AT STATE LEVEL FOR IMPLEMENTATION OF THE GOVERNMENT OF INDIA AND GOVERNMENT OF GUJARAT SCHEMES PERTAINING TO ROAD CO NSTRUCTION AND DEVELOPMENT IN GUJARAT WHICH INTERALIA INCLUDES DEV ELOPMENT OF ROADS, STATE HIGHWAYS, BRIDGES, FLYOVERS ETC. AND THE IMPU GNED GRANT HAVING BEEN RECEIVED FOR SUCH SPECIFIC PURPOSE AND HAVING BEEN UTILIZED FOR SUCH SPECIFIC PURPOSES, THE UNUTILIZED GRANT CANNOT BE CONSIDERED AS INCOME FOLLOWING THE JUDGMENT OF AHMEDABAD, ITAT, I N THE CASE OF GUJARAT SAFAI KAMDAR VIKAS NIGAM AND HONBLE GUJARA T HIGH COURT IN THE CASE OF GUJARAT MUNICIPAL FINANCE BOARD VS. DY. CIT 221 ITR 317 (GUJ.). 4.4. IN VIEW OF THE FACTS OF THE CASE, AND RESPECT FULLY FOLLOWING THE ABOVE DECISIONS OF JURISDICTIONAL COURT OF LAW, IT IS HELD THAT THE A.O. IS NOT JUSTIFIED IN CONSIDERING THE UNSPENT GRANT OF R S.38,63,38,000/- AS THE INCOME OF THE APPELLANT COMPANY AS THE AMOUNT DOES NOT BELONG TO THE APPELLANT, AND, THEREFORE, THE ENTIRE ADDITION AS A BOVE IS DELETED. THIS GROUND OF APPEAL IS THUS ALLOWED. 4.1. WE FIND THAT THE LD.CIT(A) HAS FOLLOWED THE DE CISION(S) OF THE COORDINATE BENCH (ITAT AHMEDABAD) IN THE CASE OF GU JARAT SAFAI KAMDAR VIKAS NIGAM VS. ACIT-GANDHINAGAR CIRCLE, GAN DHINAGAR IN ITA NO.3232/AHD/2008, DATED 17/04/2009 AND OF GUJAR AT STATE DISASTER MANAGEMENT AUTHORITY VS. ACIT-GANDHINAGAR CIRCLE, G ANDHINAGAR IN ITA NO.949/AHD/2009, DATED 05/06/2006. THE REVENU E HAS NOT PLACED ANY MATERIAL ON RECORD SUGGESTING THAT THE DECISION S AS RELIED UPON BY THE LD.CIT(A) ARE NOT APPLICABLE ON THE FACTS OF THE PR ESENT CASE. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDE R OF THE LD.CIT(A), ITA NO.417/AHD/ 2012 ACIT VS. GUJ.STATE ROAD DEVELOPMENT CORP.LTD. ASST.YEAR 2008-09 - 6 - SAME IS HEREBY UPHELD. THUS, GROUND NO.1 OF REVENU ES APPEAL IS REJECTED. 5. GROUND NOS.2 & 3 ARE GENERAL IN NATURE WHICH REQ UIRE NO INDEPENDENT ADJUDICATION. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 29 TH DAY OF MAY, 2015 AT AHMEDABAD. SD/- SD/- ( .. ) ( ) ( .) ( G.D. AGARWAL ) ( KUL BHARAT ) VICE PRESIDENT (AZ) JUDICIAL MEMBER AHMEDABAD; DATED 29/ 05 /2015 6/..- , .-../ T.C. NAIR, SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. %( / THE APPELLANT 2. )*%( / THE RESPONDENT. 3. 789 : / CONCERNED CIT 4. : ( ) / THE CIT(A)-GANDHINAGAR 5. ; <)-89 , /893 , 7 / DR, ITAT, AHMEDABAD 6. < => . / GUARD FILE. / BY ORDER, * ;) //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD