The DCITGNR Circle, Gandhinagar V. Gujarat State Rural Roads Development Agency, Gandhinagar

ITA 837/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63003 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 18-09-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 18-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revised return
• Section: 143(3); 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, AHMEDABAD BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER I.T.A. NO. 837/ AHD/2010 & I.T.A.NO. 490/AHD/2011 (ASSESSMENT YEARS 2006-07 & 2005-06 RESPECTIVELY) DCIT, GANDHINAGAR VS. GUJARAT STATE RURAL ROAD DEVELOPMENT AGENCY, R&B DEPARTMENT, BLOCK 14 NEW SACHIVLAYA COMPLEX, GANDHINAGAR PAN/GIR NO. : AAATG6904B (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHELLEY JINDAL, CIT DR SHRI M G PATEL, AR RESPONDENT BY: DATE OF HEARING: 18.09.2012 DATE OF PRONOUNCEMENT: 12.10. 2012 O R D E R PER SHRI A. K. GARODIA, AM:- BOTH THE APPEALS ARE FILED BY THE REVENUE WHICH AR E DIRECTED AGAINST TWO SEPARATE ORDERS OF CIT(A) GANDHINAGAR DATED 29. 12.2009 FOR THE ASSESSMENT YEAR 2006-07 AND DATED 16.11.2010 FOR T HE ASSESSMENT YEAR 2005-06. BOTH THESE APPEALS WERE HEARD TOGETHER AN D ARE BEING DISPOSED OFF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CON VENIENCE. I.T.A.NO.834,490 /AHD/2010 2 2. FIRST, WE TAKE UP THE APPEAL FOR THE ASSESSMENT YEAR 2005-06, I.T.A.NO. 490/AHD/2011. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND O N FACTS OF THE CASE IN HOLDING THAT GRANTS RECEIVED UNDER 'PRADHAN MANTRI GRAM SADAK YOJANA' OF GOVT. OF INDIA ARE NOT THE ASSESSE E'S INCOME. 2. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW A ND ON FACTS OF THE CASE IN DELETING THE ADDITION OF INTEREST ON AC COUNT OF UNUTILIZED GRANTS SO RECEIVED ARE NOT THE ASSESSEE'S INCOME, W HICH WAS RECEIVED UNDER 'PRADHANMANTRI GRAM SADAK YOJNA'. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. 4. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEARNED CIT(APPEALS) MAY BE SET ASIDE AND THAT OF THE A.O . BE RESTORED TO THE ABOVE EXTENT. 2.1 BRIEF FACTS TILL THE ASSESSMENT STAGE ARE NOTED BY LD. CIT(A) AT PARA 4 OF HIS ORDER AND FOR THE SAKE OF READY REFERENCE, THE RELEVANT PARA OF HIS ORDER IS REPRODUCED BELOW: IN THIS CASE, ORIGINALLY THE ASSESSMENT WAS COMPLE T5ED U/S. 143(3) OF THE ACT ON TOTAL INCOME OF RS.36,91,20,060/- AS AGAINST NIL INCOME RETURNED BY THE ASSESSEE. THE ASSESSEE WAS R EGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 1860 AND ALSO REGIS TERED UNDER BOMBAY PUBLIC TRUST ACT, 1950. THE ASSESSEE TRUST H AS BEEN CONSTITUTED BY THE STATE GOVERNMENT IN ACCORDANCE W ITH THE PRADHAN MANTRI GRAM SADAK YOJANA (PMGSY) OF THE GOV ERNMENT OF INDIA FOR IMPLEMENTING PLANS AND PROJECTS OF .TH E STATE GOVERNMENT AS MAY BE APPROVED AND SANCTIONED BY. MI NISTRY OF RURAL DEVELOPMENT, GOVERNMENT OF INDIA AND NATIONAL RURAL ROAD DEVELOPMENT AGENCY. IN THE STATEMENT OF INCOME, THE ASSESSEE HAD SHOWN DONATION/ CONTRIBUTION RECEIVED DURING THE YE AR AT RS.225,93,72,555/- AND EXPENDITURE FOR THE OBJECT O F THE TRUST AT RS. 1,89,02,52,290/- AND FOR THE REMAINING SUM IT H AD CLAIMED EXEMPTION AT RS.33,89,05,883/- U/S. 11(L) @15% OF G ROSS RECEIPTS AND A SUM.' OF RS.3,02,14,374/- AS INCOME SET APART FOR SPECIFIC PURPOSES U/S. 11(2) OF THE ACT. ON PERUSAL OF THE C ERTIFICATE OF REGISTRATION U/S. 12AA OF THE INCOME TAX ACT ENCLOS ED WITH THE I.T.A.NO.834,490 /AHD/2010 3 RETURN, IT WAS NOTICED THAT THE TRUST WAS REGISTERE D WITH EFFECT FROM 01/04/2005, I.E. WITH EFFECT FROM THE F.Y. 2005-06 RELEVANT FOR THE ASSESSMENT YEAR 2006-07. IT IS THEREFORE CLEAR THAT THE ENTITLEMENT OF OPERATIONS OF SECTIONS 11, 12 AND 13 OF THE ACT WERE AVAILABLE TO THE ASSESSEE W.E.F. A.Y. 2006-07. AS SUCH, THE ASSE SSEE WAS NOT ENTITLED FOR BENEFIT OF SECTIONS 11 & 12 OF THE ACT FOR THE ASSESSMENT YEAR 2005-06. SINCE THE PROVISIONS OF SE CTIONS 11, 12 AND 13 WERE NOT APPLICABLE TO THE ASSESSEE'S CASE F OR WANT OF REGISTRATION U/S 12AA OF THE ACT IN THE ASSESSMENT YEAR 2005-06; ASSESSMENT WAS COMPLETED ON TOTAL INCOME OF RS.36,9 1,20,260/- WITHOUT GIVING EFFECT TO SECTIONS 11, 12 AND 13 OF THE ACT. 2.2 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATER IN APPEAL BEFORE LD. CIT(A) WHO HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND NOW, THE REVENUE IS IN APPEAL BEFORE US. 2.3 LD. D.R. SUPPORTED THE ASSESSMENT ORDER. HE AL SO SUBMITTED THAT IN VIEW OF THE JUDGEMENT OF HONBLE APEX COURT RENDERE D IN THE CASE OF GOETZ INDIA LTD. AS REPORTED IN 284 ITR 323, THE CL AIM OF THE ASSESSEE CANNOT BE ALLOWED BECAUSE THE SAME WAS NOT MADE IN THE RETURN OF INCOME FILED BY THE ASSESSEE AND NO REVISED RETURN WAS FIL ED. 2.4 AS AGAINST THIS, THE LD. A.R. SUPPORTED THE ORD ER OF LD. CIT(A). HE ALSO SUBMITTED THAT THIS ISSUE IS NOW COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL DECISION RENDERED IN THE CASE OF GU JARAT SAFAI KAMDAR VIKAS NIGAM VS ACIT IN I.T.A.NO. 3232/AHD/2008 DATE D 17.04.2009. HE FURTHER SUBMITTED THAT THE COPY OF THIS TRIBUNAL DECISION IS AVAILABLE ON PAGES 145-181 OF THE PAPER BOOK. HE FURTHER SUBMIT TED THAT THIS DECISION OF THE TRIBUNAL WAS CONFIRMED BY HONBLE GUJARAT HI GH COURT AS PER THE JUDGEMENT DATED 02.05.2011 IN APPEAL NO.1934/2009 A ND COPY OF THIS JUDGEMENT IS AVAILABLE ON PAGES 182-185 OF THE PAPE R BOOK. HE ALSO SUBMITTED THAT THE SLP FILED BY THE REVENUE AGAINST THIS JUDGMENT OF HONBLE GUJARAT HIGH COURT WAS DISMISSED BY HONBLE APEX COURT AS PER I.T.A.NO.834,490 /AHD/2010 4 THE JUDGEMENT DATED 02.01.2012 IN CC 20789/2011. H E SUBMITTED A COPY OF THIS JUDGEMENT OF HONBLE APEX COURT ALSO IN THE PAPER BOOK. HE ALSO DRAWN OUR ATTENTION TO PAGE 81 OF THE PAPER BOOK WH ICH IS A CERTIFICATE ISSUED BY THE DIRECTOR (FINANCE & ADMINISTRATION) O F NATIONAL RURAL ROAD DEVELOPMENT AGENCY DATED 16.10.2007 IN WHICH I T WAS CERTIFIED THAT GUJARAT STATE RURAL ROAD DEVELOPMENT AGENCY (GSRRDA ) I.E. THE ASSESSEE IS A NON PROFIT AGENCY AND PMGSY IS 100% C ENTRALLY PLANNED SCHEME OF CENTRAL GOVERNMENT FOR WHICH WORK IS BEIN G EXECUTED BY GSRRDA. HE ALSO SUBMITTED THAT AS PER THIS CERTIFI CATE, GOVERNMENT OF INDIA PROVIDES FUNDS TO THE GSRRDA IN THE SHAPE OF GRANT AND AID ON THE DETAILED PROJECT REPORT APPROVED BY THE GOVERNMENT OF INDIA AND THE FUNDS ARE KEPT IN THE PUBLIC SECTOR BANK FOR DEPLOY MENT OF EXPENSES CONCERNING TO PMGSY WORK AND FEW ADMINISTRATIVE EXP ENSES ONLY. IT IS ALSO CERTIFIED THAT THE FUNDS REMAINED UNUTILIZED E ARN INTEREST AND SUCH INTEREST INCOME AND MISCELLANEOUS RECEIPT IS RECYCL ED AS GRANT IN AID FOR PMGSY WORK TO EXECUTING AGENCY UNDER SPECIFIC ORDER OF MINISTRY OF ROAD DEVELOPMENT. HE SUBMITTED THAT THIS CERTIFICAT E IS SIMILAR TO THE CERTIFICATE CONSIDERED BY THIS TRIBUNAL IN THE CASE OF GUJARAT STATE SAFAI KAMDAR VIKAS NIGAM (SUPRA) AND HENCE, IN THE PRESEN T CASE ALSO, THE ISSUE INVOLVED IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THIS TRIBUNAL DECISION. 2.5 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUS E THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW AND THE JUDGEMENT CITED BY THE LD. A.R. OF THE ASSESSEE. W E FIND THAT THE DECISION OF CIT(A) IS AVAILABLE ON PAGES 15-16 OF H IS ORDER AND FOR THE SAKE OF READY REFERENCE, THE RELEVANT PORTION IS RE PRODUCED BELOW: THIS CLAIM HAS BEEN REJECTED BY THE AO MAINLY BECA USE- I.T.A.NO.834,490 /AHD/2010 5 THE CLAIM WAS NOT MADE IN THE RETURN FILED AND NO REVISED RETURN WAS FILED. THE ASSESSING OFFICER RELIED ON HONOURAB LE SUPREME COURT'S JUDGMENT IN THE CASE OF GOETZ (INDIA) LTD. ON THE MERITS THE FIRST BASIS OF THE ASSESSING OFFICER FOR REJECT ING THE CLAIM CANNOT BE SUSTAINED BECAUSE THE HONOURABLE INCOME T AX APPELLATE TRIBUNAL HAS ALREADY ADMITTED THE ADDITIONAL GROUND BEFORE SENDING THE CASE BACK TO THE ASSESSING OFFICER TO DECIDE TH E ENTIRE ASSESSMENT DE NOVO. SPECIFIC DIRECTIONS HAVE BEEN G IVEN IN THE ORDER TO EXAMINE AND DECIDE THIS VERY ISSUE. AS FAR AS MERITS ARE CONCERNED MY PREDECESSOR WHILE DECIDING THE APPEAL FOR ASSESSMENT YEAR 2006-07, ON SAME FACTS A ND SIMILAR CONTENTIONS OF THE AND THE ASSESSING OFFICER HAS DE CIDED THE FOLLOWING: I) GRANTS RECEIVED BY THE APPELLANT UNDER 'P RADHAN MANTRI GRAM SADAK YOJANA' OF THE GOVERNMENT OF INDIA ARE F OR SPECIFIC PURPOSE AND CANNOT FORM APPELLANT'S INCOME, II) IN THE CONTEXT, THE TREATMENT GIVEN BY T HE APPELLANT TO THE RECEIPTS IN ITS BOOKS OF ACCOUNT ARE OF NOT MUCH CO NSEQUENCE FOR INCOME TAX ASSESSMENT, III) ON SIMILAR FOOTING THE INTEREST ACCRUED O N UNUTILIZED GRANTS DOES NOT BELONG TO THE APPELLANT AND THEREFORE CANN OT BE TREATED AS ITS INCOME. I SEE NO REASON DISAGREE WITH THE ORDER AND THEREFO RE DECIDE THE ISSUE AS DECIDED-ABOVE. 2.6 FROM THE ABOVE PARA OF THE ORDER OF LD. CIT(A), WE FIND THAT IT IS NOTED BY LD. CIT(A) THAT IN THE FIST ROUND, THE TRI BUNAL HAS ALREADY ADMITTED THE ADDITIONAL GROUND FOR SETTING ASIDE TH E MATTER BACK TO THE FILE OF THE A.O. TO DECIDE THE ENTIRE MATTER DE NOVO AND , THEREFORE, RELIANCE PLACED BY THE LD. D.R. ON THE JUDGMENT OF HONBLE A PEX COURT RENDERED IN THE CASE OF GOETZ INDIA LTD. (SUPRA) HAS NO RELE VANCE BECAUSE THE ADDITIONAL GROUND HAS ALREADY BEEN ADMITTED BY THE TRIBUNAL IN THE FIRST ROUND. REGARDING THE MERIT, WE FIND THAT THIS ISSU E IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL DECISION REN DERED IN THE CASE OF GUJARAT STATE SAFAI KAMDAR VIKAS NIGAM (SUPRA), WH ICH IS ALREADY I.T.A.NO.834,490 /AHD/2010 6 APPROVED BY HONBLE GUJARAT HIGH COURT AND SLP AGAI NST WHICH HAS ALREADY BEEN DISMISSED BY THE HONBLE APEX COURT. THE CERTIFICATE AVAILABLE ON PAGE 81 OF THE PAPER BOOK IS SIMILAR T O THE CERTIFICATE CONSIDERED BY THE TRIBUNAL IN THE CASE OF GUJARAT S TATE SAFAI KAMDAR VIKAS NIGAM (SUPRA). THEREFORE THE ORDER OF LD. CI T(A) IS IN LINE WITH THE TRIBUNAL DECISION AND, THEREFORE, WE DO NOT FIN D ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT(A). 2.7 IN THE RESULT, THIS APPEAL OF THE REVENUE IS DI SMISSED. 3. NOW, WE TAKE UP THE APPEAL OF THE REVENUE FOR TH E ASSESSMENT YEAR 2006-07 IN I.T.A.NO. 837/AHD/2010. THE GROUNDS RAI SED BY THE REVENUE ARE AS UNDER: 1. THE LD. CIT(A) WAS NOT JUSTIFIED IN HOLDI NG THAT GRANTS RECEIVED UNDER ' PRADHAN MANTRI GRAM SADAK YOJANA ' OF GOVT. OF INDIA ARE NOT THE ASSESSEE'S INCOME. 2. THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETI NG THE ADDITION OF INTEREST ON ACCOUNT UNUTILIZED GRANT SO RECEIVED AR E NOT THE ASSESSEE 'S INCOME. WHICH WAS RECEIVED UNDER' PRADHAN MANTRI GRAM SADAK YOJANA. ' 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. IT IS, THEREFORE, PRAYED THAT THE ORDER THE LEARNED CIT(APPEALS) MAY BE SET ASIDE AND THAT OF THE A.O. BE RESTORED THE A BOVE EXTENT. 3.1 LD. D.R. SUPPORTED THE ASSESSMENT ORDER WHEREAS THE LD. A.R. SUPPORTED THE ORDER OF LD. CIT(A). AT THIS JUNCTUR E, IT WAS POINTED OUT BY THE BENCH THAT AS PER THE ASSESSMENT ORDER, THE ASS ESSED INCOME IS NIL EVEN AFTER MAKING ADDITION IN RESPECT OF GRANT RECE IVED AND INTEREST INCOME BECAUSE THE A.O. HAS ALLOWED THE CLAIM U/S 1 1 OF THE INCOME TAX ACT, 1961. IT WAS POINTED OUT BY THE BENCH THAT IN THIS VIEW OF THE MATTER, THE APPEAL FILED BY THE REVENUE IS OF ACADEMIC INTE REST ONLY. IN REPLY, THERE WAS NOTHING TO SAY BY ANY OF THE PARTIES. IN THIS VIEW OF THE MATTER I.T.A.NO.834,490 /AHD/2010 7 THAT THE ASSESSED INCOME IS NIL EVEN AFTER MAKING VARIOUS ADDITIONS, THE ISSUE RAISED BY THE REVENUE IN THIS APPEAL IS OF AC ADEMIC INTEREST ONLY AND WE HOLD ACCORDINGLY. THE GROUNDS RAISED BY THE REV ENUE ARE LIABLE TO BE REJECTED BEING OF ACADEMIC INTEREST ONLY. 3.2 IN THE RESULT, THIS APPEAL OF THE REVENUE IS AL SO DISMISSED. 4. IN THE COMBINED RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. 5. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (KUL BHARAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 28/09/2012 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 08.10.2012.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 12/10/12 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.12/10 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 12/10/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .