ACIT(E), Jaipur V. JAIPUR DEVELOPMENT AUTHORITY, Jaipur

ITA 899/JPR/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5659 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 14-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H V GURJAR CIT DHK
• Keywords: Depreciation; Charitable institution; Benefit of exemption; Reason to believe; Reassessment proceedings
• Section: 143(3); 12A; 12AA; 147; 148; 12; 2; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 899/JP/16 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 THE ACIT (EXEMPTION) CIRCLE, JAIPUR CUKE VS. M/S JAIPUR DEVELOPMENT AUTHORITY, JLN MARG, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAATJ 4598 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SHYAMLAL AGARWAL (CA) SHRI TARUN AGARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI H.V. GURJAR ( CIT ) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 03.01.2017 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 11/01/2017. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-III, JAIPUR DATED 25.07.2016 FOR A.Y. 2009-10 WHEREIN FO LLOWING TWO GROUNDS OF APPEAL HAVE BEEN TAKEN BY THE REVENUE. (1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE CIT(A) HAS ERRED IN ALLOWING THE EXEMPTION U/S 11 OF THE ACT B Y HOLDING THAT THE ACTIVITIES OF THE APPELLANT AUTHORITY ARE CHARITABL E EVEN THOUGH THE AMENDED PROVISIONS OF SECTION 13(8) R.W.1 ST AND 2 ND PROVISO OF SECTION 2(15) OF THE ACT ARE ATTRACTED. (2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN ALLOWING THE BENEFITS OF SET APART U/S 11( 2) OF THE IT ACT, 1961 DELETING THE ADDITION OF RS. 79,76,39,913/- AS UNSP ENT AMOUNT IN SPITE OF THE FACT THAT THE PROVISIONS OF SECTION 11(2) R.W.S . 11(3)(C) ATTRACTED AS ASSESSEE WAS NOT GRANTED EXEMPTION U/S 11. ITA NO.899/JP/2016 ACIT, CIRCLE(EXEMPTION) JAIPUR VS. JAIPUR DEV. AUTH ORITY 2 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SMENT WAS ORIGINALLY COMPLETED U/S 143(3) OF THE ACT WHEREBY THE AO ASSE SSED INCOME OF THE ASSESSEE AS PER NORMAL PROVISIONS OF THE ACT DENYI NG THE EXEMPTION CLAIMED BY THE ASSESSEE U/S 11, 12 &13 F THE INCOME TAX ACT . THE REASON GIVEN BY THE AO WAS THAT IN ASSESSMENT YEAR 2009-10, THE DEFINIT ION OF CHARITABLE PURPOSES U/S 2(15) HAS BEEN CHANGED AND CIT, JAIPUR VIDE IT S ORDER DATED 29.12.2011 HAS WITHDRAWN THE REGISTRATION U/S 12AA OF THE ACT. HE NCE THE ASSESSEE WAS HELD NOT ENTITLED TO EXEMPTION U/S 11, 12 & 13 OF THE AC T. SUBSEQUENT TO THE PASSING OF THE ASSESSMENT ORDER U/S 143(3) OF THE A CT, ON FURTHER VERIFICATION OF RECORD, IT WAS FOUND THAT IN THE BALANCE SHEET, THE ASSESSEE HAS SHOWN SET APART/ ACCUMULATED BALANCE U/S 11(2) WHICH WAS NOT UTILISED FOR THE PURPOSE OF THE OBJECTS OF THE TRUST UPTO THE END OF ASSESSMEN T YEAR. AS THE ASSESSEE WAS NOT ELIGIBLE FOR CLAIMING EXEMPTION U/S 11 AND ACC ORDINGLY THE CLOSING BALANCE SET APART WAS TO BE BROUGHT TO TAX U/S 11(3)(C) OF THE ACT. ACCORDINGLY THE ASSESSMENT PROCEEDINGS WERE REOPENED U/S 147 OF THE ACT AND NOTICE U/S 148 WAS ISSUED ON 29.03.2014. SUBSEQUENTLY, AFTER CONS IDERING THE SUBMISSION OF THE ASSESSEE, THE ASSESSMENT ORDER U/S 147/143(3) W AS ISSUED ON 23.03.2015. DURING THE COURSE OF REASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED THAT THE ITAT, JAIPUR BENCH VIDE ITS ORDER DATED 30.09.2 014 IN ITA NO. 182/JP/2012 HAS DIRECTED TO GRANT REGISTRATION U/S 12AA WE.F. A .Y. 2009-10 AND AS SUCH THE PROCEEDINGS INITIATED U/S 147 ARE NOT MAINTAINABLE AND ALSO ACCUMULATED BALANCE/SET APART IS NOT TAXABLE U/S 11(3)(C) OF T HE ACT. THE AO HOWEVER, DID NOT ACCEPT THE SAID SUBMISSION OF THE ASSESSEE STAT ING THAT THE DECISION OF THE ITAT, JAIPUR BENCH DATED 30.09.2014 HAS NOT BEEN AC CEPTED BY THE DEPARTMENT AND AN APPEAL U/S 260 HAS BEEN FILED BEFORE THE HON BLE RAJASTHAN HIGH COURT WHICH IS PENDING FOR ADJUDICATION. ACCORDINGLY, TH E ASSESSEES CONTENTIONS THAT IT IS REGISTERED U/S 12AA OF THE ACT WAS NOT ACCEPT ED BY THE AO. FURTHER THE ITA NO.899/JP/2016 ACIT, CIRCLE(EXEMPTION) JAIPUR VS. JAIPUR DEV. AUTH ORITY 3 AO STATED THAT IN SUBSEQUENT YEARS I.E A.Y. 2010-1 1 AND 2011-12, THE ASSESSEE HAS NOT BEEN ALLOWED THE BENEFIT OF EXEMPTION U/S 11 DUE TO INVOKING OF PROVISO TO SECTION 2(15) OF THE ACT AND THE SAME WE RE RELIED UPON BY THE AO FOR THE YEAR UNDER CONSIDERATION. ACCORDINGLY THE A SSESSEE WAS HELD NOT ELIGIBLE FOR CLAIMING EXEMPTION U/S 11 AND CLOSING BALANCE ACCUMULATED/ SET APART OF RS. 79,76,39,913 WAS ADDED TO THE TOTAL IN COME. 2. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD. CIT(A) CHALLENGING THE ACTION INITIATED U/S 147 AS WELL AS DENYING THE BENEFIT OF SECTION 11(2) OF THE ACT. REGARDING VALIDITY OF AC TION U/S 147 OF THE ACT, THE LD. CIT(A) NOTED THAT AT THE TIME OF ISSUANCE OF NOTICE U/S 148, REGISTRATION OF THE ASSESSEE U/S 12A HAD BEEN WITHDRAWN AND THEREFORE, THE AO WAS RIGHT IN TAKING ACTION U/S 147 AS HE HAS REASON TO BELIEVE THAT BENEFIT U/S 11 WAS NOT ALLOWABLE TO THE ASSESSEE. REGARDING DISALLOWANCE OF BENEFIT U/S 11(2) WAS CONCERNED, THE LD. CIT(A) NOTED THAT THE AO DENIED THE CLAIM OF THE ASSESSEE FOR THE REASON THAT REGISTRATION OF THE ASSESSEE U/ S 12A HAD BEEN WITHDRAWN BY THE COMMISSIONER AND FURTHER THE ORDER OF ITAT REST ORING THE REGISTRATION HAS BEEN OPPOSED BY THE DEPARTMENT AND AN APPEAL U/S 26 0A OF THE ACT IS PENDING FOR DECISION BEFORE THE RAJASTHAN HIGH COURT. THE LD. CIT(A) THEREAFTER REFERRED TO THE DECISION OF ITAT IN ITA NO.182/JP/2012 DATED 30.09.2014 WHEREIN THE REGISTRATION U/S 12A WAS RESTORED AND HELD THAT THE BENEFIT U/S 11 & 12 HAS TO BE GIVEN TO THE ASSESSEE EVEN THOUGH THE DEPARTMENT AL APPEAL IS PENDING BEFORE HIGH COURT. AGAINST THE SAID DECISION OF T HE LD. CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 3. THE LD. AR SUBMITTED THAT THE MATTER IS CLEARLY COVERED BY THE DECISION OF HONBLE ITAT IN ITA NO. 380, 381 & 382/JP/2016 DATE D 22.11.2016 WHEREIN THE REGISTRATION U/S 12AA WAS RESTORED FROM A.Y. 2009-1 0. IT WAS FURTHER SUBMITTED THAT THE HONBLE ITAT IN THE CONTEXT OF O RIGINAL PROCEEDINGS U/S ITA NO.899/JP/2016 ACIT, CIRCLE(EXEMPTION) JAIPUR VS. JAIPUR DEV. AUTH ORITY 4 143(3) OF THE ACT FOR THE IMPUGNED ASSESSMENT YEAR I.E 2009-10 HAS ALLOWED THE ASSESSEE THE BENEFIT OF EXEMPTION U/S 11 & 12 O F THE ACT AND THE LD AR TOOK US THROUGH THE RELEVANT FINDINGS OF THE COORDI NATE BENCH IN ITA NO. 427/JP/13 AND ITA NO. 447/JP/2013 FOR A.Y. 2009-10 DATED 04.01.2016 WHICH WAS PRONOUNCED SUBSEQUENT TO RESTORATION OF REGISTR ATION UNDER SECTION 12AA WHEREIN THE RELEVANT FINDINGS ARE CONTAINED AT PARA 6 OF ITS ORDER WHICH ARE REPRODUCED AS UNDER: 6. THE ASSESSEE HAS BEEN GRANTED REGISTRATION BY THE ORDER OF THE COORDINATE BENCH IN ITA NO. 927/JP/2007 ORDER D ATED 30/05/2008 W.E.F. 14/3/2007 WHEREIN THE COORDINATE BENCH HAS H ELD THAT THE ASSESSEES ACTIVITIES ARE CHARITABLE AND ARE NOT CO VERED U/S 2(15) OF THE ACT. THEREFORE, THE ASSESSING OFFICER IS DIRECTED T O GIVE BENEFIT OF SECTION 11 AND 12 OF THE ACT TO THE ASSESSEE. THE INCOME OF THE ASSESSEE IS TO BE ASSESSED ON THE REAL INCOME BASIS WHICH HAS BEEN AC CRUED TO THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. THE A PPELLANT HAD CHANGED METHOD OF ACCOUNTING DURING THE YEAR UNDER CONSIDERATION BUT THE SAME HAS BEEN FOUND MORE ACCURATE AND SCIENTIFI C TO DETERMINE THE ASSESSEES INCOME. THEREFORE, CHANGE OF ACCOUNTING IS BONAFIDE AND SAME CANNOT BE REJECTED ON THE GROUND THAT THE ASSE SSEE HAD CLAIMED MORE EXPENSES DURING THE YEAR UNDER CONSIDERATION. THE CASE LAW RELIED BY THE ASSESSEE IS SQUARELY APPLICABLE. A CHANGE IN THE METHOD OF ACCOUNTING SHOULD NOT BE REJECTED FOR REASONS THAT IT WOULD RESULT IN BRINGING INTO ACCOUNTS IN ONE YEAR THE LOSSES OF SE VERAL YEARS AS HELD IN THE CASE OF CIT VS. EASTERN BENGAL JUTE TRADING CO. LTD. (1978) 112 ITR 575 (CAL.) ACCORDINGLY CHANGE OF THE ACCOUNTING POL ICY IS ALLOWED. THE ASSESSEE HAS CLAIMED DEPRECIATION ON FIXED ASSE TS WHICH IS ALSO ALLOWABLE AS HELD BY THE VARIOUS COURTS IN CASE OF TRUST WHERE THE ASSESSEE FIRST MADE INCOME FOR APPLICATION OF ACQUI RING OF ASSETS AND THEREAFTER CLAIMING DEPRECIATION ON IT. ACCORDINGLY , WE ALLOW THE ASSESSEES APPEAL AND DISMISS THE REVENUES APPEAL. 4. FURTHER, THE LD. AR DRAWN OUR REFERENCE THE DECI SION OF THIS VERY BENCH FOR A.Y. 10-11, 2011-12 & 2012-13 WHEREIN AGAIN THE MATTER WAS EXAMINED AT ITA NO.899/JP/2016 ACIT, CIRCLE(EXEMPTION) JAIPUR VS. JAIPUR DEV. AUTH ORITY 5 GREAT LENGTH AND THE ASSESSEE WAS HELD ELIGIBLE FOR EXEMPTION U/S 11 & 12 OF THE ACT. 5. THE LD. DR SUPPORTED THE ORDER OF THE AO AND STA TED THAT THE DEPARTMENT IS IN APPEAL AGAINST THE EARLIER ORDERS OF THE COORDINATE BENCH BEFORE THE HONBLE RAJASTHAN HIGH COURT. AT THE SAM E TIME, HE FAIRLY AGREED THAT THE MATTER IS COVERED BY THE DECISION OF THE C OORDINATE BENCHES REFERRED SUPRA. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ISSUE OF ELIGIBILITY OF THE ASSESSE E TO CLAIM EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT HAS ALREADY BEEN EXAMI NED BY THE COORDINATE BENCH FOR THE IMPUNGED ASSESSMENT YEAR IN THE CONTE XT OF ORIGINAL ASSESSMENT PROCEEDINGS COMPLETED U/S 143(3) OF THE ACT. APPARE NTLY, THE NOTICE U/S 148 WAS ISSUED ON 29.03.2014 AND THEREAFTER REASSESSMEN T PROCEEDINGS WERE COMPLETED ON 23.03.2015 MUCH BEFORE THE ORDER WAS P RONOUNCED BY THE COORDINATE BENCH ON 04.01.2016 AND THE AO WAS THERE FORE NOT HAVING THE BENEFIT OF CONSIDERING THE DECISION OF THE COORDINA TE BENCH WHERE THE ASSESSEE WAS HELD ELIGIBLE FOR EXEMPTION UNDER SECT ION 11 AND 12 OF THE ACT. FURTHER, IN THE CONTEXT OF SUBSEQUENT ASSESSMENT YE ARS, THIS BENCH HAS RECENTLY EXAMINED THIS SUBJECT MATTER IN TERMS OF E LIGIBILITY OF THE SUBJECT ASSESSEE IN TERMS OF CLAIMING EXEMPTION U/S 11 & 12 OF THE ACT AND THE MATTER HAS AGAIN BEEN DECIDED IN FAVOUR OF THE ASESSSEE. THE RELEVANT FINDINGS ARE CONTAINED AT PARA 14 & 15 OF ORDER DATED 22.11.2016 WHICH ARE REPRODUCED AS UNDER: (14). FURTHER, THE LD AR HAS DRAWN OUR REFERENCE T O RECENT JURISDICTIONAL HIGH COURT DECISION IN CASE OF JODHPUR DEVELOPMENT AUTHORITY (SUPRA) AND SUBMITTED THAT THE RATIO OF THE SAID DECISION S QUARELY APPLIES IN THE INSTANT CASE. IN ORDER TO DETERMINE WHETHER THE FA CTS OF THE INSTANT CASE ITA NO.899/JP/2016 ACIT, CIRCLE(EXEMPTION) JAIPUR VS. JAIPUR DEV. AUTH ORITY 6 ARE PARI-MATERIA WITH THE FACTS BROUGHT UP BEFORE T HE HONBLE HIGH COURT, WE HAVE GONE THROUGH THE JAIPUR DEVELOPMENT AUTHORITY ACT, 1982. SECTION 16 OF THE JDA ACT PROVIDES THAT THE MAIN OBJECTS OF THE AUTHORITY SHALL BE TO SECURE INTEGRATED DEVELOPMENT OF THE JAIPUR REGION AND FOR THAT PURPOSE FUNCTIONS OF THE AUTHORITY SHA LL INTER-ALIA INCLUDE URBAN PLANNING INCLUDING PREPARATION OF MASTER DEVE LOPMENT PLAN AND ZONAL DEVELOPMENT PLANS AND CARRYING OUT SURVEYS FO R THE PURPOSE AND ALSO MAKING ALTERATIONS THEREIN AS MAY BE DEEMED NE CESSARY; FORMULATION AND SANCTION OF THE PROJECTS AND SCHEME S FOR THE DEVELOPMENT OF JAIPUR REGION OR ANY PART THEREOF, E XECUTION OF THE PROJECT AND SCHEMES DIRECTLY BY ITSELF OR THROUGH A LOCAL AUTHORITY OR OTHER AGENCY, COORDINATING EXECUTION OF PROJECTS OR SCHEMES FOR THE DEVELOPMENT OF JAIPUR REGION; SUPERVISION OR OTHERW ISE ENSURING ADEQUATE SUPERVISION OVER THE PLANNING AND EXECUTIO N OF ANY PROJECT OR SCHEMES THE EXPENSES OF WHICH IN WHOLE OR IN PART A RE TO BE MET FROM JAIPUR REGION DEVELOPMENT FUNDS; PREPARING SCHEMES AND ADVISING THE CONCERNED AUTHORITIES DEPARTMENT AND AGENCIES IN FO RMULATING AND UNDERTAKING SCHEMES FOR DEVELOPMENT OF AGRICULTURE, HORTICULTURE, FLORICULTURE, FORESTRY, DAIRY DEVELOPMENT, TRANSPOR T COMMUNICATION, SCHOOLING, CULTURAL ACTIVITIES, SPORTS, MEDICINE, T OURISM AND SIMILAR OTHER ACTIVITIES; UNDERTAKING HOUSING ACTIVITY IN JAIPUR REGION PROVIDED THAT THE DELINEATION OF RESPONSIBILITY FOR HOUSING BETWE EN RAJASTHAN HOUSING BOARD AND THE AUTHORITY WILL BE MADE BY STATE GOVER NMENT EFFECTIVE FROM THE DATE FIX BY IT; TO ACQUIRE, HOLD, MANAGE A ND DISPOSE OF PROPERTY, MOVABLE OR IMMOVABLE AS MAY BE DEEMED NEC ESSARY; TO ENTER INTO CONTRACTS, AGREEMENTS OR ARRANGEMENTS WITH ANY PERSON OR ORGANIZATION AS IT DEEM NECESSARY; TO PREPARE MASTE R PLAN FOR TRAFFIC CONTROL AND MANAGEMENT, DEVISE POLICY AND PROGRAMME S OF ACTION FOR SMOOTH FLOW OF TRAFFIC AND MATTERS CONNECTED THEREW ITH; AND TO DO ALL SUCH ACTS AND THINGS WHICH ARE NECESSARY FOR THE FU RTHERANCE OF THE OBJECTS FOR WHICH THE AUTHORITY IS ESTABLISHED. F URTHER, AS PER THE PROVISIONS OF SECTION 55 OF JDA ACT, FOR THE PURPO SE OF DISCHARGING THE STATUTORY FUNCTIONS, THE JAIPUR REGION DEVELOPMENT FUND IS CREATED TO WHICH ALL MONEY RECEIVED BY THE AUTHORITY IS CRE DITED INCLUDING AMOUNT OF CONTRIBUTION TO BE MADE BY THE STATE GOVE RNMENT, SUCH OTHER MONEY AS MAY BE PAID TO THE AUTHORITY BY THE STATE GOVERNMENT, CENTRAL GOVERNMENT OR ANY OTHER AUTHORITY OR AGENCY BY WAY OF GRANT, LOANS ADVANCES OR OTHERWISE, 90% SHARE OF TAX RECOV ERED ON LAND AND BUILDING SITUATED WITHIN THE JAIPUR REGION, INCOME DERIVED FROM PREMIUM ON SECOND AND SUBSEQUENT SALE OF VACANT LAN D, INCOME FROM ITA NO.899/JP/2016 ACIT, CIRCLE(EXEMPTION) JAIPUR VS. JAIPUR DEV. AUTH ORITY 7 LEVY ON VACANT LAND, ALL FEES, COSTS AND CHARGES R ECEIVED BY THE AUTHORITY UNDER THIS ACT OR ANY OTHER LAW FOR TIME BEING IN FORCE, ALL MONEY RECEIVED BY AUTHORITY FROM THE DISPOSAL OF LA ND BUILDINGS AND OTHER PROPERTY MOVABLE AND IMMOVABLE AND OTHER TRAN SACTIONS INCLUDING LEASE MONEY, URBAN ASSESSMENT, DEVELOPMEN T CHARGES AND OTHER SIMILAR CHARGES AND ALL MONEY RECEIVED BY WAY OF RENTS AND PROFITS OR IN ANY OTHER MANNER OR FROM ANY OTHER SOURCE OR FROM DONATIONS. FURTHER, SECTION 58 OF THE JDA ACT PROVIDES THAT AL L PROPERTY, FUNDS AND OTHER ASSETS VESTING IN THE AUTHORITY SHALL BE HELD AND APPLIED BY IT FOR THE PURPOSES AND SUBJECT TO THE PROVISIONS OF THE A CT. (14.1) IT IS THUS NOTED THAT THE MAIN OBJECTS OF TH E JAIPUR DEVELOPMENT AUTHORITY AND THE FUNCTIONS/ACTIVITIES TO ACHIEVE S UCH OBJECTIVES ARE PARI-MATERIA WITH THAT OF THE JODHPUR DEVELOPMENT A UTHORITY. FURTHER, THE ENTIRE FUNDS OF THE JAIPUR DEVELOPMENT AUTHORIT Y IS MANDATORILY REQUIRED TO BE UTILIZED FOR DISCHARGING THE FUNCTIO NS TO ACHIEVE THE OBJECT OF INTEGRATED DEVELOPMENT OF JAIPUR REGION. IN LIGH T OF ABOVE, THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN CASE OF JODHPUR DEVELOPMENT AUTHORITY AND OTHERS (SUPRA) SQUARELY A PPLIES TO THE JAIPUR DEVELOPMENT AUTHORITY WHERE THE HONBLE HIGH COURT HAS HELD THAT THE PREDOMINANT OBJECT OF THE JDA BEING TO SECURE THE INTEGRATED DEVELOPMENT OF THE JODHPUR REGION WHICH IS UNDOUBTE DLY FALLS WITHIN THE EXPRESSION ADVANCEMENT OF ANY OTHER OBJECTS OF GENERAL PUBLIC UTILITY WITHIN THE DEFINITION OF SECTION 2(15) OF T HE ACT OF 1961 AND THEREFORE, ON ACCOUNT OF PROFIT BEING EARNED BY IT THROUGH SOME OF THE ACTIVITIES UNDERTAKEN BY IT, WHICH ARE ANCILLARY OR INCIDENTAL TO THE MAIN OBJECT OF GENERAL PUBLIC UTILITY, IT DOES NOT CEASE TO BE CHARITABLE IN CHARACTER SO AS TO RENDER IT INELIGIBLE TO CLAIM RE GISTRATION UNDER SECTION 12A READ WITH SECTION 12AA OF THE ACT OF 1961. THE SAID DECISION THUS SUPPORT THE CASE OF THE JAIPUR DEVELOPMENT AUTHORIT Y FOR BEING ELIGIBLE TO CLAIM EXEMPTION U/S 11 & 12 OF THE ACT. (15). FURTHER, ON PERUSAL OF ASSESSMENT ORDER, IT I S OBSERVED THAT LIMITED GROUND ON WHICH EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT WAS DENIED WAS ON ACCOUNT OF NON-REGISTRATION UNDER SECTION 12AA OF THE ACT. NOTHING HAS BEEN BROUGHT ON RECORD TO SUG GEST THAT BESIDES NON-REGISTRATION UNDER SECTION 12AA, THE ASSESSEE H AS FAILED TO FULFIL ANY OTHER CONDITIONS AS ENVISAGED U/S 11, 12 AND 13 OF THE ACT BY VIRTUE OF WHICH IT SHALL BE DENIED THE EXEMPTION UNDER SECTIO N 11 & 12 OF THE ACT. IN FACT, ON PERUSAL OF ASSESSMENT ORDER, IT IS NOTE D THAT THE ASSESSING OFFICER HAS NOTED IN CONTEXT OF GRANT OF RS 2,50,00 ,000 TO AMBER ITA NO.899/JP/2016 ACIT, CIRCLE(EXEMPTION) JAIPUR VS. JAIPUR DEV. AUTH ORITY 8 DEVELOPMENT AUTHORITY AND OF RS 3,82,10,322 TO JAIP UR METRO RAIL CORPORATION LIMITED THAT THESE EXPENSES WOULD BE A DMISSIBLE AS APPLICATION OF INCOME IF IT WAS TO BE CONSIDERED E XEMPTED UNDER SECTION 11, 12 AND 13 AND AS THE BENEFIT OF SECT ION 11 IS NOT ADMISSIBLE, THE SUM PAID TO THESE TWO INSTITUTIONS AS GRANT WOULD NOT BE ADMISSIBLE AND HENCE ADDED BACK TO ASSESSEES INCO ME. SIMILAR IS THE POSITION IN RESPECT OF OTHER DISALLOWANCES EXCEPT F OR AN AMOUNT OF RS 1,57,56,523 WHICH HAS BEEN ALLOWED IN THE EARLIER Y EARS AND DISALLOWANCE THEREOF CONFIRMED BY THE LD CIT(A). I T IS THUS CLEAR THAT THE REVENUE HAS NOT DISPUTED ANY OF THESE EXPENSES AS A PPLICATION OF INCOME (EXCEPT RS 1,57,56,523 WHICH WAS ALREADY ALL OWED IN EARLIER YEARS) FOR WANT OF FULFILMENT OF ANY OF THE CONDIT IONS SPECIFIED UNDER SECTION 11, 12 AND 13 OF THE ACT. REGARDING APPLIC ABILITY OF SECTION 13(8), WE HAVE ALREADY HELD ABOVE THAT IN VIEW OF P ROVISO TO SECTION 2(15) NOT APPLICABLE IN THE CASE OF THE ASSESSEE, P ROVISIONS OF SECTION 13(8) WOULD NOT BE APPLICABLE. IN LIGHT OF ABOVE, WE DO NOT SEE ANY REASON TO INTE RFERE WITH THE ORDER OF THE LD CIT(A). THE ASSESSEE IS HELD ELIGIBLE FOR EXEMP TION U/S 11 OF THE ACT AS WELL AS THE BENEFIT OF SECTION 11(2) SHALL BE AVAILABLE TO ASSESSEE. THE GROUNDS OF APPEAL TAKEN BY THE REVENUE ARE THUS DISMISSED. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/01 /2017. SD/- SD/- (KUL BHARAT ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 11/01/2017 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ACIT, CIRCLE (EXEMPTIONS), JAIPU R 2. IZR;FKHZ@ THE RESPONDENT- M/S JAIPUR DEVELOPMENT AUTHORITY, JAIPUR ITA NO.899/JP/2016 ACIT, CIRCLE(EXEMPTION) JAIPUR VS. JAIPUR DEV. AUTH ORITY 9 3. VK;DJ VK;QDR@ CIT III, EXEMPTIONS, JAIPUR 4. VK;DJ VK;QDRVIHY@ THE CIT(A)-III, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 899/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR.