Commissioner of Income-tax- Gandhinagar v. Gujarat Urban Development Corporation Ltd
[Citation -2014-LL-1113-6]

Citation 2014-LL-1113-6
Appellant Name Commissioner of Income-tax- Gandhinagar
Respondent Name Gujarat Urban Development Corporation Ltd.
Court HIGH COURT OF GUJARAT AT AHMEDABAD
Relevant Act Income-tax
Date of Order 13/11/2014
Assessment Year 2007-08
Judgment View Judgment
Keyword Tags oral order
Bot Summary: 2.The facts giving rise to the Tax Appeal are as under :- The assessee was picked up for scrutiny assessment. The AO made addition of Rs.5,35,77,935/- on account of interest received from the Fixed Deposit receipts and Page 1 of 4 HC-NIC Page 1 of 4 Created On Fri May 06 12:55:29 IST 2016 O/TAXAP/1181/2014 ORDER disallowed the expenses of Rs.3,00,000/- paid for participation in Gujarat Vibrant Summit. ITAT dismissed the Appeal of the Revenue holding that CIT(A) had given a finding on fact that the assessee is a 100 government owned company appointed as a Nodal Agency for implementation of various infrastructure development projects all across Gujarat. Since the facts were identical in this case also, the assessee has credited the interest accrued to the respect grant accounts. ITAT dismissed the Appeal of the revenue holding that the AO has disallowed the expenses while observing that the assessee had not commenced it business and the expenses claimed in the PL account have already been disallowed. CIT(A) had given a finding on fact that the business of the assessee had already been commenced. The assessee had also participated in the same by putting up a stall since the main object of the assessee-company is also to carry out activities for infrastructure development projects in the State of Gujarat.


ORDER IN HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 1181 of 2014 ================================================================ COMMISSIONER OF INCOME TAX - GANDHINAGAR....Appellant(s) Versus GUJARAT URBAN DEVELOPMENT CORPORATION LTD....Opponent(s) ================================================================ Appearance: MR SUDHIR M MEHTA, ADVOCATE for Appellant(s) No. 1 MR B S SOPARKAR, ADVOCATE for Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER Date : 13/11/2014 ORAL ORDER (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1.By way of this Appeal, appellant has challenged judgment and order of Income Tax Appellate Tribunal dated 19.03.2014 in ITA No.1116/Ahd/2011 for Assessment Year : 2007 2008. 2.The facts giving rise to Tax Appeal are as under :- assessee was picked up for scrutiny assessment . AO made addition of Rs.5,35,77,935/- on account of interest received from Fixed Deposit receipts and Page 1 of 4 HC-NIC Page 1 of 4 Created On Fri May 06 12:55:29 IST 2016 O/TAXAP/1181/2014 ORDER disallowed expenses of Rs.3,00,000/- paid for participation in Gujarat Vibrant Summit. Against this, assessee filed Appeal before CIT(A), who deleted addition in respect of accrual of interest of Fixed Deposits and deleted disallowance of expenses paid for participation in Gujarat Vibrant Summit. ITAT dismissed Appeal of Revenue holding that CIT(A) had given finding on fact that assessee is 100% government owned company appointed as Nodal Agency for implementation of various infrastructure development projects all across Gujarat. He had further given finding on fact that observation of Assessing Officer in para 13.3 particularly on page 6 of assessment order that interest is not credited to respective Grant accounts is factually incorrect, as perusal of balance sheet and respective ledger accounts of Grant/Project clearly show that interest is credited to respective account. Reliance was placed on various decisions pertaining to facts of case. Since facts were identical in this case also, assessee has credited interest accrued to respect grant accounts. Therefore, ITAT did not any find any Page 2 of 4 HC-NIC Page 2 of 4 Created On Fri May 06 12:55:29 IST 2016 O/TAXAP/1181/2014 ORDER infirmity in order of CIT(A) and same was upheld. ITAT dismissed Appeal of revenue holding that AO has disallowed expenses while observing that assessee had not commenced it business and expenses claimed in P&L account have already been disallowed. CIT(A) had given finding on fact that business of assessee had already been commenced. CIT(A) observed that amount paid by assessee company by way of participation fees to Gujarat Vibrant Summit to encourage development activities in State. assessee had also participated in same by putting up stall since main object of assessee-company is also to carry out activities for infrastructure development projects in State of Gujarat. Therefore, ITAT did not find any infirmity in order of CIT(A) and same is hereby upheld. 3.Learned Counsel for appellant contended that following substantial questions of law are raised :- [A] Whether ITAT was justified in holding that interest receipt of Rs.5,35,77,935/- is not taxable in hands of assessee when funds remained unutilized by assessee and Page 3 of 4 HC-NIC Page 3 of 4 Created On Fri May 06 12:55:29 IST 2016 O/TAXAP/1181/2014 ORDER were parked in fixed deposits in assessee's own name on long term basis? [B] Whether ITAT was justified in deleting addition of Rs.3,00,000/- made on account of disallowance of expenses claimed as expenditure on account of contribution to Gujarat Vibrant Summit 2007? 4.Further, it is submitted that issue No.(A) is covered by decision of this Court in case of Gujarat Power Corporation Ltd. v. Income-Tax Officer reported in [2013] 354 ITR 201 (Guj). and also decision of this Court in Tax Appeal No.838/2013. 5.On Issue No.2, qua discussion made by both authorities, i.e. Commissioner (Appeals) and Tribunal, we are in complete agreement with view taken by Tribunal. 6.In aforesaid circumstances, Appeal lacks merits and hence, deserves to be dismissed. Sd/- (K.S. JHAVERI, J.) Sd/- (K.J.THAKER, J) CAROLINE Page 4 of 4 HC-NIC Page 4 of 4 Created On Fri May 06 12:55:29 IST 2016 Commissioner of Income-tax- Gandhinagar v. Gujarat Urban Development Corporation Ltd
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