COMMISSIONER OF INCOME TAX - GANDHINAGAR vs. GUJARAT URBAN DEVELOPMENT CORPORATION LTD

O/TAXAP/1248/2014 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 1248 of 2014

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR.JUSTICE KS JHAVERI Sd/-

and HONOURABLE MR.JUSTICE K.J.THAKER Sd/-

================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? No 2 To be referred to the Reporter or not ? No 3 Whether their Lordships wish to see the fair copy of the judgment ? No 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? No 5 Whether it is to be circulated to the civil judge ? No ================================================================ COMMISSIONER OF INCOME TAX - GANDHINAGAR....Appellant(s) Versus GUJARAT URBAN DEVELOPMENT CORPORATION LTD....Opponent(s) ================================================================ Appearance: MR SUDHIR M MEHTA, ADVOCATE for the Appellant(s) No. 1 MR B S SOPARKAR, ADVOCATE for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and Page 1 of 5

O/TAXAP/1248/2014 JUDGMENT HONOURABLE MR.JUSTICE K.J.THAKER

Date : 11/12/2014

ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. Heard learned Advocates for the parties. 2. By way of this Appeal, the appellant has challenged the judgment and order of the Income Tax Appellate Tribunal, Ahmedabad 'A' Bench dated 19.03.2014 in ITA No.2671/Ahd/2013 for the Assessment Year : 2010 – 2011. 3. Learned Advocate for the appellant has raised the following substantial question of law :- “[A] Whether the ITAT was justified in holding that the interest

receipt

of Rs.20,18,23,408/- is not taxable in the hands of the assessee when the funds remain unutilized by the assessee and were parked in fixed deposits in assessee's own name on long term basis.” 4. The facts in brief which give rise to this Appeal are as under :- The Assessee was picked up for scrutiny Page 2 of 5

O/TAXAP/1248/2014 JUDGMENT assessment and all the assessment u/s. 143(3) of the Income Tax Act, 1961 was framed vide order dated 24/12/2012. The Assessing Officer made addition of Rs.20,18,23,408/- on account of interest received under various heads of grant during the year which were kept in Fixed Deposit receipt in the name of assessee and not offered for tax. Against this, the assessee filed an appeal before the CIT(A) who after considering the submissions of the assessee, dismissed the appeal of the assessee. The ITAT has allowed the appeal of the assessee by relying the similar issue in A.Y. 2007-08 (ITA No.1116/Ahd/2011), wherein decided issue in favour of assessee following the Jurisdictional High Court rendered in the case of Gujarat Municipal Finance Board vs. Dy.CIT reported at (1996) 221 ITR 317 as well as in the case of Gujarat Power Corporation Ltd. vs. ITO reported at (2013) 354 ITR 201 (Guj.) Therefore, taking a consistent view this issue was decided in favour of the assessee and the AO was directed to delete the addition made on account of interest accrued on FDR's. Page 3 of 5

O/TAXAP/1248/2014 JUDGMENT 5. We have heard learned Advocates for the parties and perused the records of the case. However, the issue raised in this Appeal is now covered by the decision of this Court rendered in Tax Appeal No.118/2014 and relevant Paragraphs of the said decision read as under :- 3. Learned Counsel for the appellant contended

that

the

following substantial questions of law are raised :- “[A] Whether the ITAT was justified in holding that the interest receipt of Rs.5,35,77,935/- is not taxable in the hands of assessee when the funds remained unutilized by the assessee and were parked in fixed deposits in assessee's own name on long term basis? [B] Whether the ITAT was justified in deleting the addition of Rs.3,00,000/- made on account of disallowance of expenses claimed as expenditure

account

of contribution to Gujarat Vibrant Summit 2007?” 4. Further, it is submitted that issue No.(A) is covered by the decision of this Court in the case of Gujarat Power Corporation Ltd. v. Income-Tax Officer reported in [2013] 354 ITR 201 (Guj). and also the decision of this Court in Tax Appeal No.838/2013. 5. On Issue No.2, qua the discussion made by both the authorities, i.e. the Commissioner (Appeals) and the Page 4 of 5

O/TAXAP/1248/2014 JUDGMENT Tribunal, we are in complete agreement with the view taken by the Tribunal. 6. In the aforesaid circumstances, the Appeal lacks merits and hence, deserves to be dismissed. 6. In the aforesaid circumstances, when the issue raised in this Appeal has already been answered by this Court, we are of the view that there is no point in admitting this Appeal. Hence, this Tax Appeal deserves to be dismissed. The same is held in favour of the assessee and against the Department. Sd/- (K.S. JHAVERI, J.) Sd/- (K.J. THAKER, J) CAROLINE Page 5 of 5