THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) vs. SURAT URBAN DEVELOPMENT AUTHORITY (SUDA)

C/TAXAP/269/2020 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 269 of 2020 ========================================================== THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) Versus SURAT URBAN DEVELOPMENT AUTHORITY (SUDA) ========================================================== Appearance: MR MR BHATT, SR. ADVOCATE WITH MRS MAUNA M BHATT(174) for the Appellant(s) No. 1 for the Opponent(s) No. 1 ========================================================== CORAM: HONOURABLE THE CHIEF JUSTICE MR. VIKRAM NATH and HONOURABLE MR. JUSTICE J.B.PARDIWALA

Date : 30/09/2020

ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1 This Tax Appeal is at the instance of the Revenue, being dissatisfied with the order passed by the Income Tax Appellate Tribunal, “D” Bench, Ahmedabad, in the ITA No.2429/Ahd/2017 for the A.Y.2009-10. 2 The Revenue has proposed the following substantial questions of law for the consideration of this Court: “[A] Whether on the facts and circumstances of the case and in law, the Hon’ble Tribunal was justified in holding that the re-assessment proceedings to be wrong and void ab initio whereas the proceedings for reassessment for reopening of assessment was validly on the basis of information and after recording proper reason? [B] Whether on the facts and circumstances of the case Page 1 of 4

C/TAXAP/269/2020 ORDER and in law, the Hon’ble Tribunal was justified in holding that activities of the assessee are not in the nature of commerce/trade without considering the fact that the assessee is involved in widespread commercial activities which is covered under first and second provisos to section 2(15) of the Act without considering the merit of the issue? [C] Whether on the facts and circumstances of the case and in law, the Hon’ble Tribunal was justified in considering the activity of the assessee as engaged in the development of urban area which is in the nature of advancement of general public utility not hit by the newly introduced first and second proviso to section 2(15) of the Act without considering the merit of the issue? [D] Whether on the facts and circumstances of the case and in law, the Hon’ble Tribunal was justified in deleting the addition of Rs.2,51,276/- by not appreciating the fact that the addition to fixed assets has already been allowed in earlier years as application of income which amounts to double deduction without considering the merit of the issue? [E] Whether on the facts and circumstances of the case and in law, the Hon’ble Tribunal was justified in deleting the addition of Rs.38,30,97,603/- on account of expenditure on housing project considering that a capital expenditure by a person need not to be a capital receipt of the person receiving that amount which the assessee has received for discharge of its objects without considering the merit of the issue? Page 2 of 4

C/TAXAP/269/2020 ORDER [F] Whether on the facts and circumstances of the case and in law, the Hon’ble Tribunal was justified in deleting the addition of General Development Expenditure Fund of Rs.7,25,19,123/- considering that a capital expenditure by a person need not be a capital receipt of the person receiving that amount which the assessee has received for the discharge of its objects without considering the merit of the issue? [G] Whether on the facts and circumstances of the case and in law, the Hon’ble Tribunal was justified giving benefit in accumulation @15% of Rs.6,56,00,660/- u/s. 11(1)(a) of the Act without appreciating the fact that once the proviso of section 2(15) is applicable, the benefit of section 11(2) cannot be allowed further without considering the merit of the issue? [H] Whether on the facts and circumstances of the case and in law, the Hon’ble Tribunal was justified in allowing carry forward of deficit of Rs.1,20,90,804/- against its future income in absence of any express provision in the Act regarding the same without considering the merit of the issue? 3 We have heard Mr. M.R.Bhatt, the learned Senior Counsel assisted by Mrs. Mauna Bhatt, the learned Senior Standing Counsel appearing for the Revenue and have perused the materials on record. The questions proposed by the Revenue are no longer res integra in view of the Page 3 of 4

C/TAXAP/269/2020 ORDER judgment of this very Court rendered in the Tax Appeal No.79 of 2020 dated 25.02.2020. All the questions proposed are squarely covered by the decision rendered in the case of Ahmedabad Urban Development Authority vs. ACIT (Exemption), 2017 396 ITR 323 (Guj.). 3 In the result, the Appeal fails and is hereby dismissed. (VIKRAM NATH, CJ) (J. B. PARDIWALA, J) A. B. VAGHELA/P.SUBRAHMANYAM Page 4 of 4