COMMISSIIONER OF INCOME TAX vs. GUJARAT STATE ROAD TRANSPORT CORPORATION

ITR/51/1984HC GujaratGJHC24011726198417 February 1997Author: HONOURABLE MR. JUSTICE R.K.ABICHANDANI,HONOURABLE MR. JUSTICE R.BALIA2 pages
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What were the facts?

The Income Tax Appellate Tribunal (ITAT), Ahmedabad, referred a question of law to the High Court of Gujarat at Ahmedabad under Section 256(1) of the Income Tax Act, 1961. The reference concerned the assessment of Gujarat State Road Transport Corporation. The core issue was whether the assessee was entitled to exemption under Section 11 read with Section 2(15) of the Income Tax Act, 1961. The Commissioner of Income-tax (Appeals) had previously held in favour of the assessee, a view that the ITAT confirmed. The revenue challenged this confirmation.

What did the High Court hold?

The High Court held that the question referred to it was directly covered by the Supreme Court's decision in C.I.T. vs. Andhra Pradesh State Road Transport Corporation (159 ITR 1). In that precedent, it was held that the Andhra Pradesh State Road Transport Corporation's predominant object was charitable, not profit-making. Any surplus after operational expenses was to be made over to the State Government for road development, which constitutes an object of general public utility. Applying this ratio, the High Court concluded that the Gujarat State Road Transport Corporation was also entitled to exemption under Section 11 read with Section 2(15) of the Act. Therefore, the Tribunal was correct in confirming the CIT(A)'s view. The question is answered in the affirmative and against the revenue. The reference is disposed of with no order as to costs.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal has been right in law in confirming the view taken by the Commissioner of Income-tax (Appeals) in holding that the assessee is entitled to exemption under section 11 read with section 2(15) of the Income Tax Act, 1961? Assessee's contention: The judgment does not record any specific contentions made by the assessee. The assessee is the Gujarat State Road Transport Corporation. Revenue's contention: The revenue, represented by the Commissioner of Income Tax, challenged the ITAT's confirmation of the CIT(A)'s order, implying disagreement with the entitlement to exemption under Section 11 read with Section 2(15). The judgment does not detail specific arguments or precedents relied upon by the revenue.

Which sections of the Income-tax Act were involved?

Section 256(1),Section 11,Section 2(15)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 51 of 1984

For Approval and Signature:

Hon'ble MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE R.BALIA. ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements?

2.

To be referred to the Reporter or not?

3.

Whether Their Lordships wish to see the fair copy of the judgement?

4.

Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the Civil Judge?

The order continues below.

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