DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTION), JAIPUR vs. RAJASTHAN HOUSING BOARD, JAIPUR

Briefly stated, the facts of the case are that the assessee is engaged in the activity of developing housing schemes in the State of Rajasthan. The assessment was framed U/s 143(3) vide order dated 23.03.2016 wherein the AO observed that though the assessee’s activity falls under the ambit of “general public utility”, however they are of commercial in nature and covered by the first and second proviso to Section 2(15) of the Act. It was held by the AO that even through the assessee is registered U/s 12AA of the Act, no benefit under Section 11 and 12 can be provided to the assessee in terms of Section 13(8) r.w. first and second proviso to Section 2(15). Accordingly, the income of the assessee was computed without giving any benefit for application of income and accumulation of income for the objects of the Housing Board and income was computed in accordance with commercial principals and the adjusted net surplus amounting to 52,66,63,119/- was brought to tax. Further, the AO made an adjustment towards contingencies equalization reserve amounting to Rs. 30,04,95,237/- holding the same as contingent liability and not as an ascertained liability. Further, additions were made on account of disallowance of depreciation amounting to Rs. 2,05,10,753/- and undisclosed profit from auction of the properties amounting to Rs. 5,69,04,017/-.

The assessee, being aggrieved by the order of the Assessing Officer, preferred an appeal before the ld. CIT(A) who has allowed the appeal of the assessee following the earlier order passed by the Coordinate Bench in assessee’s own case. Now the Revenue is in appeal before us against the said findings of the ld. CIT(A).

At the outset, the ld. AR submitted that the matter is squarely covered by the decision of the Coordinate Bench in ITA No. 21/JP/2013 for A.Y. 2009-10 dated 20.01.2017 wherein all these grounds of appeal were decided in favour of the assessee. It was accordingly submitted that the same may kindly be followed.

In ITA No. 21/JP/2013 for A.Y. 2009-10, the Coordinate Bench has held as under:- “23. 2. We have heard rival contention, perused the material available on record and gone through the orders of the authorities below. We find that the Coordinate Bench has dealt with the identical issue elaborately in the case of Hoshiarpur Improvement Trust & Others vs. ITO in ITA No. 200/Asr/2010. The Coordinate Bench has considered various judgments and came to the conclusion that as long as broader public cause is served, whether by the State funding or by efficient regulation of the affairs, it is an object of general public utility. Authorities below were not justified in declining the benefit of section 11 read with section 2(15) to the assessee, and in holding that the assessee trust was not covered by advancement of any object of general public utility. The Coordinate Bench has held that even if the activities in the nature of trade, commerce or business etc. are undertaken in the course of actual carrying out of advancement of any object of general public utility, till the end of the previous year relevant to the assessment year 2016-17, the activities will continue to be covered by the scope of Section 2(15). The year under appeal is 2009-10, therefore, respectfully following the decision of the Coordinate Bench in the case of Hoshiarpur Improvement Trust & Others vs. ITO in ITA No. 200/Asr/2010, we do not see any reason to interfere in the order of ld. CIT (A). Ground Nos. (ii) and (iii) are rejected.”

Undisputedly, there are no changes in the facts and circumstances of the case or in the legal position for the impugned assessment year. Following the decision of the Coordinate Bench in assessee’s own case referred (supra), the grounds of appeal taken by the Revenue are hereby dismissed.

विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File { ITA No. 282/JP/2018} vkns'kkuqlkj@ By order, सहायक पंजीकार@Aेेज. त्महपेजतंत