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Facts
The assessee, Raebareli Development Authority, is a body established under the Uttar Pradesh Urban Planning & Development Act, 1973, for the development of the area. The Revenue disputed its claim for exemption under Section 11 of the Income Tax Act, 1961, treating its activities as trade or business. The Assessing Officer made additions for business profit and disallowed depreciation. The CIT(A) dismissed the assessee's appeal.
Held
The Tribunal held that the assessee's primary object is general public utility, which is a charitable purpose under Section 2(15) of the Income Tax Act. The activities undertaken by the Authority do not involve trade, commerce, or business with a profit motive, and therefore, the proviso to Section 2(15) is not applicable. The Tribunal relied on various Supreme Court and High Court judgments.
Key Issues
Whether the activities of the Raebareli Development Authority constitute trade, commerce, or business, thereby disentitling it from exemption under Section 11 of the Income Tax Act, considering Section 2(15) and its proviso.
Sections Cited
11, 143(2), 2(15)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH “B”, LUCKNOW
Before: SHRI KUL BHARAT & SHRI ANADEE NATH MISSHRA
PER KUL BHARAT, VICE PRESIDENT.:
This bunch of four appeals by the assessee against the different orders of the Ld. Commissioner of Income Tax (Appeals) [hereinafter referred as to “the Ld. CIT(A)”], pertaining to the A.Ys. 2012-13, 2015-16, 2016-17 & 2017-18. The facts in the grounds raised
in this bunch of appeals are similar. For the sake of convenience, all appeals were heard together and are being disposed off by this consolidated order. First, we will take up the pertaining to the A.Y. 2017-18 is taken as a lead case. The assessee has raised following grounds of appeal: - “(1) Development Authority, (here in after called RDA) has been established under “The Uttar Pradesh Urban Planning & Development Act, 1973” and is fully owned state government body. RDA is working under the to 235/LKW/2023 Page 2 of 22 supervision of UP Govt. & Works for the development of the area provide basic facility to citizen. It’s working with objective of no profit no loss. (2) The first proviso to section takes out an activity from the ambit of charity object if the same is in the nature of trade, commerce or business. Section 2(15) reads as under: “2. (15) “charitable purpose” includes relief of the poor, education, medical relief, Raebareli Development Authority, do preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest.) and the advancement of any other object of general public utility Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, respective of the nature of use or application, or retention, of the income from such activity; Provided further that the first proviso shall not apply of the aggregate value of the receipts from the activities referred to therein is twenty five lakh rupees or less in the previous year. 3.(1). The assessee was set up as under The Uttar Pradesh Urban Planning & Development Act,1973 with an objective of development of. all development schemes as well as beautification of the District came under its purview In the objects, it is, inter alia, mentioned that the existing local bodies and other authorities inspite of their best efforts had not been able to cope with the problems of town planning and urban development and, therefore, to tackle the same resolutely the State Government considered it advisable that in such developing areas, The entire activities are controlled/ administered through various government orders and notifications. 3.(2). It is noticeable that in section 2(15) preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest have been brought within the definition of "charitable purpose”. In our opinion, the submission of the assessee that development of the district by providing housing, roads, development and maintenance of parks (boost to environment) plantation of trees (again pertaining to environment), providing sewerage system (clean and healthy environment) are all objects for the welfare of the people of the Raebareli Development Authority district; as also these are objects of general public utility. However, since these are the objects of general publicity utility and the boost to environment is only incidental to the activity undertaken by the assessee, therefore, the activity carried out by assessee comes within the last limb of section 2(15) viz. advancement of any other object of general public utility and, therefore, it is to be examined whether the same does not involve the carrying on of activity in the nature of trade, commerce or business or any activity of rendering any services in relation to any trade commerce or business or cess or fee or any other consideration irrespective of the nature of use or application or reduction of the income from such activity. 3.(3). In this regard, we would first refer to the various sections dealing with the activity undertaken by the assessee. As per section 3 of the U P Urban Planning & Development Act, 1973, first of all the State has to form an opinion that any area within the state requires to be developed according to plan and on formation of such opinion, it is to notify in the gazette the area to be a development area. Thereupon, the State will to 235/LKW/2023 Page 3 of 22 constitute an Authority to be called the Development Authority in respect of that development area as per section 4 of the said Act. 3.(4). The objects of the Authority are contained in Section 7 and for carrying out its objects of development, it has been vested with the power: (1) to acquire, hold, manage and dispose of land and other property; (11) to carry out building, engineering, mining and other operations; (iii) to execute works in connection with the supply of water and electricity, to dispose of sewage and to provide and maintain other services and amenities (iv) generally to do anything necessary or expedient for purpose of such development and for purposes incidental there to Raebareli Development Authority 3.(5). Section 14 of the Act gives exclusive right to the Development Authority for development of land in respect of area which has been declared as development area u/s 3. After such declaration no development of land shall be undertaken or carried out or continued in that area by any person or body (including a department of government), unless permission of such development has been obtained in writing from the Vice Chairman in accordance with the provisions of the Act. 3.(6). Further, the development has to be carried out as per the plans. Section 18 of the Act requires the State government to acquire the land and transfer the same to the Development Authority. The Authority is not entitled to gift the land but to dispose of the land by way of sale, exchange or lease or by the creation of any easement, night or privilege or otherwise. 3.(7). Section 20 deals with the fund of the Authority, which is reproduced hereunder: "20. Fund of the Authority (1) The Authority shall have and maintain its own fund which shall be credited (a) All moneys received by the Authority from the Stage Government by way of grants. loans, advances or otherwise; (b) All moneys borrowed by the Authority from sources other than the State Government by way of loans or debentures; (c) All fees. tolls and charges received by the Authority under this Act; (d) All moneys received by the Authority from the disposal of lands, buildings and other properties, movable and immovable; and (e) All moneys received by the Authority by way of rents and profits or in any other manner or From any other source. (f) The fund shall be applied towards meeting the expenses incurred by the Authority 1n the Administration of this Act and for no other purposes.
3. (8). All these provisions in the Act lead to inescapable conclusion that State Govt. constituted Development Authority for the welfare of people and not with any profit motive.
3. (9). Now we will examine the proviso to section 2(15) with reference to above broad scheme of the Act. From the above it is evident that the main object of the assessee is development of the area as per the mandate of U- P. Urban Planning & Development Act, 1973. The activity undertaken by the Authority comes within the object of general public utility and it cannot be concluded that it involves the carrying on of any activity in the nature of trade, commerce or business. Unless the activity undertaken by the assessee comes within the ambit of trade, commerce or business, the proviso would not get attract. 3.(10). Hon'ble Supreme Court in the case of CIT vs. Gujarat Maritime Board 295 ITR 561 has held that where the assessee was under a legal obligation to apply its income which was directly and substantially from to 235/LKW/2023 Page 4 of 22 the business held under trust for the development of minor ports in the State of Gujarat, then it does not involve any profit motive and assessee was entitled for registration u/s 12A. The Hon'ble Supreme Court pointed out that the income earned by the Port was deployed for the development of minor ports in the state of Gujarat. Hon'ble Supreme Court took note of the fact that u/s 73 of the Gujarat Man time Board Act 1981 all moneys received by or on behalf of the Board were to be credited to a fund called the general account of the minor ports and under section 74, detailed guidelines as noted at page 564 of the report, were there. The mode of dealing with deficit or surplus was contemplated u/s 75 of the said Act. Considering all these sections, the Hon'ble Supreme Court held that there could not be said to be any profit. Unless there was a profit motive, it cannot be said that an entity was carrying on any trade, commerce or business. 3.11. We further find that in case of Krishi Utpadan Mandi Samity (supra), the Hon'ble Allahabad High Court, while dealing with the proviso to section 2(15), inter alia, observed that main object is to be considered and incidentally 1f some profit is made and the said profit is used for charitable purpose the said trust/ Institution does not cease to be established for charitable purpose. 3.12. We further find that in the case of Muzaffarnagar Development Authority (supra), the ITAT following the decisions in the case of UP Avas Evam Vikas Parishad (supra); and M/s Khurja Development Authority Vs. CIlI (supra), allowed the assessee's appeal. 3.13. Further in the case of Sabarmats Ashram Gaushala Trust Vs. ADIT (E) (supra), we find that Tribunal has held that profit motive is must for holding an activity to be in the nature of trade, commerce or business. 3.14. In view of above discussion we hold that assessee Authority has been created with the object of general public utility which is a charitable object within the meaning of section 2(15) and the proviso to section 2(15) 1s not applicable because assessee Authority 1s not carrying out activity with any profit motive but the predominant object is welfare of people at large. (4) As per the Case of Haridwar Development Authority vs. Ld. CIT Hon'ble {TAT follow the decision taken by Hon’ble Allahabad High Court in case of CIT Vs. Krishi utapadan mandi samiti. At the time hearing in same case Ld. Counsel for the assessee in the rejoinder submitted that the decisions in the cases of Punjab Urban Planning & Development Authority (supra) & Jalandhar Development Authority (supra) are not applicable in the present case, because this Authority is constituted under the U.P. Urban Planning & Development Act, 1973 and it under the jurisdiction of Hon'ble Allahabad High Court so, as per the above (Haridwar Development Authority) case, assessee (RDA) jurisdiction is also same, so please follow the judgment of Hon'ble Allahabad High Court. (5) Any Builder never developed the city, they developed his project only upto the time of possession provided to his customers, after giving all possession Builder never come back for development of their old site, But in the case RDA, its developed there old site after giving possession its can be verified By expenditure done on RDS’s Old site such as Site development Indira nagar, site development ahiya Raipur, Munshiganj ete. to 235/LKW/2023 Page 5 of 22 (6) Assesse’s object is based on UP urban planning and development Act 1973, which is applied in UP State in after 1973. As per object of the act Developed the ‘Related District’ for the General Public utilities, and in year 2008 (Finance Act 2008) some amendments made, in proviso 2(15) that the society turnover 1s cannot be above Rs. 25 lakhs, if his nature related with trade, commerce, etc As per circular no. 2008 of Finance Act 2008 1s clearly motioned section 2(15) it’s based on of fact or law as applicable. In the case of related assessee, The UP urban planning and development 1973 is not amended its object after insertion, As per fact (Point No. 08) or proper physical examination by any of the competent Authority it can be decided that, Whether The object of The UP urban planning and development 1973 is purely for general Public Utilities of the related District or not. (7) We are submitting some more detail in favour of RDA they are as follows: (1) Any Builder never provided Installments facilities their customer, but RDA always at, because its follows the Government policies, as per every Government agenda, providing housing facilities to every poor Indian who is not able to purchase their own house without Installment. 1) Most of the decision taken by the RDA in board meetings, the member of the board is Govt officer, they are not a businessman, they never takes any profit or gains from RDA, They Shall takes any decision which shall be in favour of District Raebareli and their people, so there is no doubt, board’s decision are in favor of general public. (iii) At the end of the every month RDA, send Monthly progress report (MPR) to Awas bandhu Awas Bandhu checked the monthly performance of RDA. (iv) At the middle of the month performance budget call by the Gram vikas niyojak, (v) At the end of social report sends to the CDO office. (vi) Form point no 2to 5 all of authority, controlled, checked, constructed, planned etc. for RDA in the favour of general public. (vii) RDA work is like Police, as Police providing safety to us, like this, Any dwelling persons if deceased with encroachment, in their mohllas, town etc. in that case they can directly complained about this encroachment to RDA, RDA will takes action about this type of complains and take action they can deem fit. (viii) RDA doing social responsibility, & controlled Green Land, pond etc. it's not mean it is the favour of Farmer, it’s the favour general public, because without green land farmer can’t produced crops for us, and ponds is also important for conservation of rain water maintain water level in city area. (ix) As assessee is calming Depreciation in Income-Expenditure, but Preparation of Income Expenditure is only for notional purpose, Because Balance Sheet Cannot be prepare without preparing Income & expenditure account, so Income-Expenditure is very required for Balance Sheet, But ITR of the assessee has filed through Receipt Payment Account instead of Income expenditure, Please check the Receipt Payment Account, to 235/LKW/2023 Page 6 of 22 Depreciation entry was not passed through Receipt Payment Account, so please do not add deprecation as Income of Assessee. (xii) RDA Preparing all books of account as required by law and showed at the time hearing. (xiii) RDA is not profit making entity used its entire surplus fund in development of Raebareli and their resides pergon, if any fund will remain of any Developed site that has been transferred to Municipal Corporation of Raebareli for development in future. Any other relief, which your good self may deem fit.”
The facts giving rise to the present appeal are that in this case the assessee filed its return of income in ITR-7 on 30.10.2017, declaring total income at Nil after claiming exemption u/s 11 of the Income Tax Act, 1961 (‘the Act”, for short). The case was selected for scrutiny under Computer- Assisted Scrutiny System (CASS). Thereafter, a notice u/s 143(2) of the Act was issued and served upon the assessee. In response thereto, the assessee filed its submissions and other evidence as called. Thereafter, the Assessing Officer proceeded to frame assessment after considering the submissions of the assessee and ruled that the case of the assessee is covered by the proviso to Section 2(15) of the Act as amended w.e.f. 01.04.2016 made an addition of business profit at Rs.3,32,79,731/-. Further, the Assessing Authority disallowed the depreciation claimed by the assessee amounting to Rs.43,28,224/-. Thus, the Assessing Officer computed the income of Rs.3,76,07,955/-. Aggrieved against this, the assessee preferred an appeal before the Ld. CIT(A) who dismissed the appeal of the assessee. Now, the assessee is in appeal before this Tribunal.
At the outset, Ld. Counsel for the assessee contended that the issue in question is related to all these appeals has been decided in favour of the assessee and the Revenue has accepted in subsequent years. He has filed assessment order pertaining to to 235/LKW/2023 Page 7 of 22 the A.Y. 2022-23 dated 25.03.2024. Ld. Counsel has also filed a copy of the judgment rendered by the Hon'ble Supreme Court in the case of Assistant Commissioner of Income Tax (Exemptions) vs Ahmedabad Urban Development Authority. The matter was decided along with other bunch of appeals in Civil Appeal No.21762 of 2017. Ld. Counsel submitted that the assessee was also one of the parties in the matter.
On the other hand, the Ld. CIT-DR supported the orders of the lower authorities.
Heard, the Ld. Representatives of the parties and perused the materials available on record. The Hon'ble Supreme Court in the case of Assistant Commissioner of Income Tax (Exemptions) vs Ahmedabad Urban Development Authority (supra) was dismissed the appeal in Civil Appeal No.6489 of 2018 against the assessee herein observed as under: - “254 In accordance with the foregoing discussion, and summary of conclusions, the numerous appeals are disposed of as follows: (i) The revenue’s appeal against the Improvement Trust, Moga, the Hoshiarpur Improvement Trust, Bathinda Improvement Trust, Fazilka Improvement Trust, Sangrur Improvement Trust, Patiala Improvement Trust, Jalandhar Improvement Trust, Kapurthala Improvement Trust, Pathankkot Improvement Trust, Improvement Trust, Hansi, and the Special Leave Petitions filed against the Gujarat Maritime Board and Karnataka Water Supply and Drainage Board are rejected. (ii) The revenue’s appeal against Ahmedabad Urban Development Authority, the Gujarat Housing Board, the Gandhinagar Urban Development Authority, Rajkot Urban Development Authority, Surat Urban Development Authority, Jamnagar Area Development Authority, and the Gujarat Industrial Development Corporation are rejected. Likewise, the revenue’s appeal against Agra Development Trust; UP Awas Evam Vikas Parishad; Raebareli Development Authority, Rajasthan Housing Board; Mangalore Urban Development Authority; Mathura Vrindavan Development Authority; Meerut Development Urban Development Authority, Yamuna Expressway Industrial Development Authority; Greater Noida Industrial Development Authority; New Okhla Industrial Development Authority and Karnataka Industrial Areas Development Board are rejected.” to 235/LKW/2023 Page 8 of 22 6. It is brought to our notice that the Revenue in assessee’s case, pertaining to the A.Y. 2022-23 under the identical facts the contention of the assessee that it is entitled for exemption u/s 11 of the Act has been accepted following the judgment of Hon'ble Apex Court. For the sake of clarity, the observation of the assessing authority is reproduced as under: - “On examination of the submission of the assessee and reason for selection of the case, the submission of the assessee in this regard is accepted and no variation has been proposed on this issue. And income of the assessee is assessed at returned income.”
Therefore, in the light of the above, the impugned orders is hereby set aside and restore the assessment to the file of the assessing authority who would frame assessment afresh after verifying the facts, if the facts are identical as were before the Hon'ble Supreme Court, the AO would delete the impugned additions. Grounds of appeal of the assessee are allowed for statistical purposes.
8. Now, we take up the assessee’s appeal in to 235/LKW/2023 for A.Y. 2012-13, 2015-16 & 2016-17. The identical grounds have been taken in all these appeals. For the sake of clarity, all the grounds are reproduced as under: - “ITA. No.233/LKW/2023 for A.Y. 2012-13 “(1) Development Authority, (here in after called RDA) has been established under “The Uttar Pradesh Urban Planning & Development Act, 1973” and is fully owned state government body. RDA is working under the supervision of UP Govt. & Works for the development of the area provide basic facility to citizen. It’s working with objective of no profit no loss. (2) The first proviso to section takes out an activity from the ambit of charity object if the same is in the nature of trade, commerce or business. Section 2(15) reads as under: “2. (15) “charitable purpose” includes relief of the poor, education, medical relief, Raebareli Development Authority, do preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest.) and the advancement of any other object of general public utility Provided that the advancement of any other object of general public utility to 235/LKW/2023 Page 9 of 22 shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, respective of the nature of use or application, or retention, of the income from such activity; Provided further that the first proviso shall not apply of the aggregate value of the receipts from the activities referred to therein is twenty five lakh rupees or less in the previous year. 3.(1). The assessee was set up as under The Uttar Pradesh Urban Planning & Development Act,1973 with an objective of development of. all development schemes as well as beautification of the District came under its purview In the objects, it is, inter alia, mentioned that the existing local bodies and other authorities inspite of their best efforts had not been able to cope with the problems of town planning and urban development and, therefore, to tackle the same resolutely the State Government considered it advisable that in such developing areas, The entire activities are controlled/ administered through various government orders and notifications. 3.(2). It is noticeable that in section 2(15) preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest have been brought within the definition of "charitable purpose”. In our opinion, the submission of the assessee that development of the district by providing housing, roads, development and maintenance of parks (boost to environment) plantation of trees (again pertaining to environment), providing sewerage system (clean and healthy environment) are all objects for the welfare of the people of the Raebareli Development Authority district; as also these are objects of general public utility. However, since these are the objects of general publicity utility and the boost to environment is only incidental to the activity undertaken by the assessee, therefore, the activity carried out by assessee comes within the last limb of section 2(15) viz. advancement of any other object of general public utility and, therefore, it is to be examined whether the same does not involve the carrying on of activity in the nature of trade, commerce or business or any activity of rendering any services in relation to any trade commerce or business or cess or fee or any other consideration irrespective of the nature of use or application or reduction of the income from such activity. 3.(3). In this regard, we would first refer to the various sections dealing with the activity undertaken by the assessee. As per section 3 of the U P Urban Planning & Development Act, 1973, first of all the State has to form an opinion that any area within the state requires to be developed according to plan and on formation of such opinion, it is to notify in the gazette the area to be a development area. Thereupon, the State will constitute an Authority to be called the Development Authority in respect of that development area as per section 4 of the said Act. 3.(4). The objects of the Authority are contained in Section 7 and for carrying out its objects of development, it has been vested with the power: (1) to acquire, hold, manage and dispose of land and other property; (11) to carry out building, engineering, mining and other operations; (iii) to execute works in connection with the supply of water and electricity, to dispose of sewage and to provide and maintain other services and amenities (iv) generally to do anything necessary or expedient for purpose of such development and for purposes incidental there to Raebareli Development Authority to 235/LKW/2023 Page 10 of 22 3.(5). Section 14 of the Act gives exclusive right to the Development Authority for development of land in respect of area which has been declared as development area u/s 3. After such declaration no development of land shall be undertaken or carried out or continued in that area by any person or body (including a department of government), unless permission of such development has been obtained in writing from the Vice Chairman in accordance with the provisions of the Act. 3.(6). Further, the development has to be carried out as per the plans. Section 18 of the Act requires the State government to acquire the land and transfer the same to the Development Authority. The Authority 1s not entitled to gift the land but to dispose of the land by way of sale, exchange or lease or by the creation of any easement, night or privilege or otherwise. 3.(7). Section 20 deals with the fund of the Authority, which is reproduced hereunder: "20. Fund of the Authority (1) The Authority shall have and maintain its own fund which shall be credited (a) All moneys received by the Authority from the Stage Government by way of grants. loans, advances or otherwise; (b) All moneys borrowed by the Authority from sources other than the State Government by way of loans or debentures; (c) All fees. tolls and charges received by the Authority under this Act; (d) All moneys received by the Authority from the disposal of lands, buildings and other properties, movable and immovable; and (e) All moneys received by the Authority by way of rents and profits or in any other manner or From any other source. (f) The fund shall be applied towards meeting the expenses incurred by the Authority 1n the Administration of this Act and for no other purposes. 3. (8). All these provisions in the Act lead to inescapable conclusion that State Govt. constituted Development Authority for the welfare of people and not with any profit motive. 3. (9). Now we will examine the proviso to section 2(15) with reference to above broad scheme of the Act. From the above it is evident that the main object of the assessee is development of the area as per the mandate of U- P. Urban Planning & Development Act, 1973. The activity undertaken by the Authority comes within the object of general public utility and it cannot be concluded that it involves the carrying on of any activity in the nature of trade, commerce or business. Unless the activity undertaken by the assessee comes within the ambit of trade, commerce or business, the proviso would not get attract. 3.(10). Hon'ble Supreme Court in the case of CIT vs. Gujarat Maritime Board 295 ITR 561 has held that where the assessee was under a legal obligation to apply its income which was directly and substantially from the business held under trust for the development of minor ports in the State of Gujarat, then it does not involve any profit motive and assessee was entitled for registration u/s 12A. The Hon'ble Supreme Court pointed out that the income earned by the Port was deployed for the development of minor ports in the state of Gujarat. Hon'ble Supreme Court took note of the fact that u/s 73 of the Gujarat Man time Board Act 1981 all moneys received by or on behalf of the Board were to be credited to a fund called the general account of the minor ports and under section 74, detailed guidelines as noted at page 564 of the report, were there. The mode of dealing with deficit or surplus was contemplated u/s 75 of the said Act. Considering all these sections, the Hon'ble Supreme Court held that there could not be said to be any profit. Unless there was a profit motive, it to 235/LKW/2023 Page 11 of 22 cannot be said that an entity was carrying on any trade, commerce or business. 3.11. We further find that in case of Krishi Utpadan Mandi Samity (supra), the Hon'ble Allahabad High Court, while dealing with the proviso to section 2(15), inter alia, observed that main object is to be considered and incidentally 1f some profit 1s made and the said profit is used for charitable purpose the said trust/ Institution does not cease to be established for charitable purpose. 3.12. We further find that in the case of Muzaffarnagar Development Authority (supra), the ITAT following the decisions in the case of UP Avas Evam Vikas Parishad (supra); and M/s Khurja Development Authority Vs. CIlI (supra), allowed the assessee's appeal. 3.13. Further in the case of Sabarmats Ashram Gaushala Trust Vs. ADIT (E) (supra), we find that Tribunal has held that profit motive is must for holding an activity to be in the nature of trade, commerce or business. 3.14. In view of above discussion we hold that assessee Authority has been created with the object of general public utility which is a charitable object within the meaning of section 2(15) and the proviso to section 2(15) 1s not applicable because assessee Authority 1s not carrying out activity with any profit motive but the predominant object is welfare of people at large. (4) As per the Case of Haridwar Development Authority vs. Ld. CIT Hon'ble {TAT follow the decision taken by Hon’ble Allahabad High Court in case of CIT Vs. Krishi utapadan mandi samiti. At the time hearing in same case Ld. Counsel for the assessee in the rejoinder submitted that the decisions in the cases of Punjab Urban Planning & Development Authority (supra) & Jalandhar Development Authority (supra) are not applicable in the present case, because this Authority is constituted under the U.P. Urban Planning & Development Act, 1973 and it under the jurisdiction of Hon'ble Allahabad High Court so, as per the above (Haridwar Development Authority) case, assessee (RDA) jurisdiction is also same, so please follow the judgment of Hon'ble Allahabad High Court. (5) Any Builder never developed the city, they developed his project only upto the time of possession provided to his customers, after giving all possession Builder never come back for development of their old site, But in the case RDA, its developed there old site after giving possession its can be verified By expenditure done on RDS’s Old site such as Site development Indira nagar, site development ahiya Raipur, Munshiganj ete. (6) Assesse’s object is based on UP urban planning and development Act 1973, which is applied in UP State in after 1973. As per object of the act Developed the ‘Related District’ for the General Public utilities, and in year 2008 (Finance Act 2008) some amendments made, in proviso 2(15) that the society turnover 1s cannot be above Rs. 25 lakhs, if his nature related with trade, commerce, etc As per circular no. 2008 of Finance Act 2008 1s clearly motioned section 2(15) it’s based on of fact or law as applicable. In the case of related assessee, The UP urban planning and development 1973 is not amended its object after insertion, As per fact (Point No. 08) or proper physical examination by any of the competent Authority it can be decided that, Whether The object of The UP urban planning and development 1973 is purely for general Public Utilities of the related District or not. to 235/LKW/2023 Page 12 of 22 (7) We are submitting some more detail in favour of RDA they are as follows: (1) Any Builder never provided Installments facilities their customer, but RDA always at, because its follows the Government policies, as per every Government agenda, providing housing facilities to every poor Indian who is not able to purchase their own house without Installment. 1) Most of the decision taken by the RDA in board meetings, the member of the board is Govt officer, they are not a businessman, they never takes any profit or gains from RDA, They Shall takes any decision which shall be in favour of District Raebareli and their people, so there is no doubt, board’s decision are in favor of general public. (iii) At the end of the every month RDA, send Monthly progress report (MPR) to Awas bandhu. Awas Bandhu checked the monthly performance of RDA. (iv) At the middle of the month performance budget call by the Gram vikas niyojak, (v) At the end of social report sends to the CDO office. (vi) Form point no 2to 5 all of authority, controlled, checked, constructed, planned etc. for RDA in the favour of general public. (vii) RDA work is like Police, as Police providing safety to us, like this, Any dwelling persons if deceased with encroachment, in their mohllas, town etc. in that case they can directly complained about this encroachment to RDA, RDA will takes action about this type of complains and take action they can deem fit. (viii) RDA doing social responsibility, & controlled Green Land, pond etc. it's not mean it is the favour of Farmer, it’s the favour general public, because without green land farmer can’t produced crops for us, and ponds is also important for conservation of rain water maintain water level in city area. (ix) As assessee 1s calming Depreciation in Income-Expenditure, but Preparation of Income Expenditure is only for notional purpose, Because Balance Sheet Cannot be prepare without preparing Income & expenditure account, so Income-Expenditure is very required for Balance Sheet, But ITR of the assessee has filed through Receipt Payment Account instead of Income expenditure, Please check the Receipt Payment Account, Depreciation entry was not passed through Receipt Payment Account, so please do not add deprecation as Income of Assessee. (xii) RDA Preparing all books of account as required by law and showed at the time hearing. (xiii) RDA is not profit making entity used its entire surplus fund in development of Raebareli and their resides pergon, if any fund will remain of any Developed site that has been transferred to Municipal Corporation of Raebareli for development in future. Any other relief, which your good self may deem fit.” to 235/LKW/2023 Page 13 of 22 “(1) Development Authority, (here in after called RDA) has been established under “The Uttar Pradesh Urban Planning & Development Act, 1973” and is fully owned state government body. RDA is working under the supervision of UP Govt. & Works for the development of the area provide basic facility to citizen. It’s working with objective of no profit no loss. (2) The first proviso to section takes out an activity from the ambit of charity object if the same is in the nature of trade, commerce or business. Section 2(15) reads as under: “2. (15) “charitable purpose” includes relief of the poor, education, medical relief, Raebareli Development Authority, do preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest.) and the advancement of any other object of general public utility Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, respective of the nature of use or application, or retention, of the income from such activity; Provided further that the first proviso shall not apply of the aggregate value of the receipts from the activities referred to therein is twenty five lakh rupees or less in the previous year. 3.(1). The assessee was set up as under The Uttar Pradesh Urban Planning & Development Act,1973 with an objective of development of. all development schemes as well as beautification of the District came under its purview In the objects, it is, inter alia, mentioned that the existing local bodies and other authorities inspite of their best efforts had not been able to cope with the problems of town planning and urban development and, therefore, to tackle the same resolutely the State Government considered it advisable that in such developing areas, The entire activities are controlled/ administered through various government orders and notifications. 3.(2). It is noticeable that in section 2(15) preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest have been brought within the definition of "charitable purpose”. In our opinion, the submission of the assessee that development of the district by providing housing, roads, development and maintenance of parks (boost to environment) plantation of trees (again pertaining to environment), providing sewerage system (clean and healthy environment) are all objects for the welfare of the people of the Raebareli Development Authority district; as also these are objects of general public utility. However, since these are the objects of general publicity utility and the boost to environment is only incidental to the activity undertaken by the assessee, therefore, the activity carried out by assessee comes within the last limb of section 2(15) viz. advancement of any other object of general public utility and, therefore, it is to be examined whether the same does not involve the carrying on of activity in the nature of trade, commerce or business or any activity of rendering any services in relation to any trade commerce or business or cess or fee or any other consideration irrespective of the nature of use or application or reduction of the income from such activity. to 235/LKW/2023 Page 14 of 22 3.(3). In this regard, we would first refer to the various sections dealing with the activity undertaken by the assessee. As per section 3 of the U P Urban Planning & Development Act, 1973, first of all the State has to form an opinion that any area within the state requires to be developed according to plan and on formation of such opinion, it is to notify in the gazette the area to be a development area. Thereupon, the State will constitute an Authority to be called the Development Authority in respect of that development area as per section 4 of the said Act. 3.(4). The objects of the Authority are contained in Section 7 and for carrying out its objects of development, it has been vested with the power: (1) to acquire, hold, manage and dispose of land and other property; (11) to carry out building, engineering, mining and other operations; (iii) to execute works in connection with the supply of water and electricity, to dispose of sewage and to provide and maintain other services and amenities (iv) generally to do anything necessary or expedient for purpose of such development and for purposes incidental there to Raebareli Development Authority 3.(5). Section 14 of the Act gives exclusive right to the Development Authority for development of land in respect of area which has been declared as development area u/s 3. After such declaration no development of land shall be undertaken or carried out or continued in that area by any person or body (including a department of government), unless permission of such development has been obtained in writing from the Vice Chairman in accordance with the provisions of the Act. 3.(6). Further, the development has to be carried out as per the plans. Section 18 of the Act requires the State government to acquire the land and transfer the same to the Development Authority. The Authority 1s not entitled to gift the land but to dispose of the land by way of sale, exchange or lease or by the creation of any easement, night or privilege or otherwise. 3.(7). Section 20 deals with the fund of the Authority, which is reproduced hereunder: "20. Fund of the Authority (1) The Authority shall have and maintain its own fund which shall be credited (a) All moneys received by the Authority from the Stage Government by way of grants. loans, advances or otherwise; (b) All moneys borrowed by the Authority from sources other than the State Government by way of loans or debentures; (c) All fees. tolls and charges received by the Authority under this Act; (d) All moneys received by the Authority from the disposal of lands, buildings and other properties, movable and immovable; and (e) All moneys received by the Authority by way of rents and profits or in any other manner or From any other source. (f) The fund shall be applied towards meeting the expenses incurred by the Authority 1n the Administration of this Act and for no other purposes. 3. (8). All these provisions in the Act lead to inescapable conclusion that State Govt. constituted Development Authority for the welfare of people and not with any profit motive. 3. (9). Now we will examine the proviso to section 2(15) with reference to above broad scheme of the Act. From the above it is evident that the main object of the assessee is development of the area as per the mandate of U- P. Urban Planning & Development Act, 1973. The activity undertaken by the Authority comes within the object of general public utility and it cannot be concluded that it involves the carrying on of any activity in the nature of trade, commerce or business. Unless the activity undertaken by the to 235/LKW/2023 Page 15 of 22 assessee comes within the ambit of trade, commerce or business, the proviso would not get attract. 3.(10). Hon'ble Supreme Court in the case of CIT vs. Gujarat Maritime Board 295 ITR 561 has held that where the assessee was under a legal obligation to apply its income which was directly and substantially from the business held under trust for the development of minor ports in the State of Gujarat, then it does not involve any profit motive and assessee was entitled for registration u/s 12A. The Hon'ble Supreme Court pointed out that the income earned by the Port was deployed for the development of minor ports in the state of Gujarat. Hon'ble Supreme Court took note of the fact that u/s 73 of the Gujarat Man time Board Act 1981. all moneys received by or on behalf of the Board were to be credited to a fund called the general account of the minor ports and under section 74, detailed guidelines as noted at page 564 of the report, were there. The mode of dealing with deficit or surplus was contemplated u/s 75 of the said Act. Considering all these sections, the Hon'ble Supreme Court held that there could not be said to be any profit. Unless there was a profit motive, it cannot be said that an entity was carrying on any trade, commerce or business. 3.11. We further find that in case of Krishi Utpadan Mandi Samity (supra), the Hon'ble Allahabad High Court, while dealing with the proviso to section 2(15), inter alia, observed that main object is to be considered and incidentally 1f some profit 1s made and the said profit is used for charitable purpose the said trust/ Institution does not cease to be established for charitable purpose. 3.12. We further find that in the case of Muzaffarnagar Development Authority (supra), the ITAT following the decisions in the case of UP Avas Evam Vikas Parishad (supra); and M/s Khurja Development Authority Vs. CIlI (supra), allowed the assessee's appeal. 3.13. Further in the case of Sabarmats Ashram Gaushala Trust Vs. ADIT (E) (supra), we find that Tribunal has held that profit motive is must for holding an activity to be in the nature of trade, commerce or business. 3.14. In view of above discussion we hold that assessee Authority has been created with the object of general public utility which is a charitable object within the meaning of section 2(15) and the proviso to section 2(15) 1s not applicable because assessee Authority is not carrying out activity with any profit motive but the predominant object is welfare of people at large. (4) As per the Case of Haridwar Development Authority vs. Ld. CIT Hon'ble {TAT follow the decision taken by Hon’ble Allahabad High Court in case of CIT Vs. Krishi utapadan mandi samiti. At the time hearing in same case Ld. Counsel for the assessee in the rejoinder submitted that the decisions in the cases of Punjab Urban Planning & Development Authority (supra) & Jalandhar Development Authority (supra) are not applicable in the present case, because this Authority is constituted under the U.P. Urban Planning & Development Act, 1973 and it under the jurisdiction of Hon'ble Allahabad High Court so, as per the above (Haridwar Development Authority) case, assessee (RDA) jurisdiction is also same, so please follow the judgment of Hon'ble Allahabad High Court. (5) Any Builder never developed the city, they developed his project only upto the time of possession provided to his customers, after giving all to 235/LKW/2023 Page 16 of 22 possession Builder never come back for development of their old site, But in the case RDA, its developed there old site after giving possession its can be verified By expenditure done on RDS’s Old site such as Site development Indira nagar, site development ahiya Raipur, Munshiganj ete. (6) Assesse’s object is based on UP urban planning and development Act 1973, which is applied in UP State in after 1973. As per object of the act Developed the ‘Related District’ for the General Public utilities, and in year 2008 (Finance Act 2008) some amendments made, in proviso 2(15) that the society turnover 1s cannot be above Rs. 25 lakhs, if his nature related with trade, commerce, etc As per circular no. 2008 of Finance Act 2008 1s clearly motioned section 2(15) it’s based on of fact or law as applicable. In the case of related assessee, The UP urban planning and development 1973 is not amended its object after insertion, As per fact (Point No. 08) or proper physical examination by any of the competent Authority it can be decided that, Whether The object of The UP urban planning and development 1973 is purely for general Public Utilities of the related District or not. (7) We are submitting some more detail in favour of RDA they are as follows: (1) Any Builder never provided Installments facilities their customer, but RDA always at, because its follows the Government policies, as per every Government agenda, providing housing facilities to every poor Indian who is not able to purchase their own house without Installment. 1) Most of the decision taken by the RDA in board meetings, the member of the board is Govt officer, they are not a businessman, they never takes any profit or gains from RDA, They Shall takes any decision which shall be in favour of District Raebareli and their people, so there is no doubt, board’s decision are in favor of general public. (iii) At the end of the every month RDA, send Monthly progress report (MPR) to Awas bandhu. Awas Bandhu checked the monthly performance of RDA. (iv) At the middle of the month performance budget call by the Gram vikas niyojak, (v) At the end of social report sends to the CDO office. (vi) Form point no 2to 5 all of authority, controlled, checked, constructed, planned etc. for RDA in the favour of general public. (vii) RDA work is like Police, as Police providing safety to us, like this, Any dwelling persons if deceased with encroachment, in their mohllas, town etc. in that case they can directly complained about this encroachment to RDA, RDA will takes action about this type of complains and take action they can deem fit. (viii) RDA doing social responsibility, & controlled Green Land, pond etc. it's not mean it is the favour of Farmer, it’s the favour general public, because without green land farmer can’t produced crops for us, and ponds is also important for conservation of rain water maintain water level in city area. (ix) As assessee is calming Depreciation in Income-Expenditure, but Preparation of Income Expenditure is only for notional purpose, Because to 235/LKW/2023 Page 17 of 22 Balance Sheet Cannot be prepare without preparing Income & expenditure account, so Income-Expenditure is very required for Balance Sheet, But ITR of the assessee has filed through Receipt Payment Account instead of Income expenditure, Please check the Receipt Payment Account, Depreciation entry was not passed through Receipt Payment Account, so please do not add deprecation as Income of Assessee. (xii) RDA Preparing all books of account as required by law and showed at the time hearing. (xiii) RDA is not profit making entity used its entire surplus fund in development of Raebareli and their resides pergon, if any fund will remain of any Developed site that has been transferred to Municipal Corporation of Raebareli for development in future. Any other relief, which your good self may deem fit.” for A.Y. 2016-17 “(1) Development Authority, (here in after called RDA) has been established under “The Uttar Pradesh Urban Planning & Development Act, 1973” and is fully owned state government body. RDA is working under the supervision of UP Govt. & Works for the development of the area provide basic facility to citizen. It’s working with objective of no profit no loss. (2) The first proviso to section takes out an activity from the ambit of charity object if the same is in the nature of trade, commerce or business. Section 2(15) reads as under: “2. (15) “charitable purpose” includes relief of the poor, education, medical relief, Raebareli Development Authority, do preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest.) and the advancement of any other object of general public utility Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, respective of the nature of use or application, or retention, of the income from such activity; Provided further that the first proviso shall not apply of the aggregate value of the receipts from the activities referred to therein is twenty five lakh rupees or less in the previous year. 3.(1). The assessee was set up as under The Uttar Pradesh Urban Planning & Development Act,1973 with an objective of development of. all development schemes as well as beautification of the District came under its purview In the objects, it is, inter alia, mentioned that the existing local bodies and other authorities inspite of their best efforts had not been able to cope with the problems of town planning and urban development and, therefore, to tackle the same resolutely the State Government considered it advisable that in such developing areas, The entire activities are controlled/ administered through various government orders and notifications. 3.(2). It is noticeable that in section 2(15) preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest have been brought within the definition of "charitable purpose”. In our opinion, the submission of the assessee that development of the district by providing to 235/LKW/2023 Page 18 of 22 housing, roads, development and maintenance of parks (boost to environment) plantation of trees (again pertaining to environment), providing sewerage system (clean and healthy environment) are all objects for the welfare of the people of the Raebareli Development Authority district; as also these are objects of general public utility. However, since these are the objects of general publicity utility and the boost to environment is only incidental to the activity undertaken by the assessee, therefore, the activity carried out by assessee comes within the last limb of section 2(15) viz. advancement of any other object of general public utility and, therefore, it is to be examined whether the same does not involve the carrying on of activity in the nature of trade, commerce or business or any activity of rendering any services in relation to any trade commerce or business or cess or fee or any other consideration irrespective of the nature of use or application or reduction of the income from such activity. 3.(3). In this regard, we would first refer to the various sections dealing with the activity undertaken by the assessee. As per section 3 of the U P Urban Planning & Development Act, 1973, first of all the State has to form an opinion that any area within the state requires to be developed according to plan and on formation of such opinion, it is to notify in the gazette the area to be a development area. Thereupon, the State will constitute an Authority to be called the Development Authority in respect of that development area as per section 4 of the said Act. 3.(4). The objects of the Authority are contained in Section 7 and for carrying out its objects of development, it has been vested with the power: (1) to acquire, hold, manage and dispose of land and other property; (11) to carry out building, engineering, mining and other operations; (iii) to execute works in connection with the supply of water and electricity, to dispose of sewage and to provide and maintain other services and amenities (iv) generally to do anything necessary or expedient for purpose of such development and for purposes incidental there to Raebareli Development Authority 3.(5). Section 14 of the Act gives exclusive right to the Development Authority for development of land in respect of area which has been declared as development area u/s 3. After such declaration no development of land shall be undertaken or carried out or continued in that area by any person or body (including a department of government), unless permission of such development has been obtained in writing from the Vice Chairman in accordance with the provisions of the Act. 3.(6). Further, the development has to be carried out as per the plans. Section 18 of the Act requires the State government to acquire the land and transfer the same to the Development Authority. The Authority is not entitled to gift the land but to dispose of the land by way of sale, exchange or lease or by the creation of any easement, night or privilege or otherwise. 3.(7). Section 20 deals with the fund of the Authority, which is reproduced hereunder: "20. Fund of the Authority (1) The Authority shall have and maintain its own fund which shall be credited (a) All moneys received by the Authority from the Stage Government by way of grants. loans, advances or otherwise; (b) All moneys borrowed by the Authority from sources other than the State Government by way of loans or debentures; (c) All fees. tolls and charges received by the Authority under this Act; (d) All moneys received by the Authority from the disposal of lands, buildings and other properties, movable and immovable; and (e) All moneys received by the Authority by way of rents and profits or in any other manner or to 235/LKW/2023 Page 19 of 22 From any other source. (f) The fund shall be applied towards meeting the expenses incurred by the Authority in the Administration of this Act and for no other purposes. 3. (8). All these provisions in the Act lead to inescapable conclusion that State Govt. constituted Development Authority for the welfare of people and not with any profit motive. 3. (9). Now we will examine the proviso to section 2(15) with reference to above broad scheme of the Act. From the above it is evident that the main object of the assessee is development of the area as per the mandate of U- P. Urban Planning & Development Act, 1973. The activity undertaken by the Authority comes within the object of general public utility and it cannot be concluded that it involves the carrying on of any activity in the nature of trade, commerce or business. Unless the activity undertaken by the assessee comes within the ambit of trade, commerce or business, the proviso would not get attract. 3.(10). Hon'ble Supreme Court in the case of CIT vs. Gujarat Maritime Board 295 ITR 561 has held that where the assessee was under a legal obligation to apply its income which was directly and substantially from the business held under trust for the development of minor ports in the State of Gujarat, then it does not involve any profit motive and assessee was entitled for registration u/s 12A. The Hon'ble Supreme Court pointed out that the income earned by the Port was deployed for the development of minor ports in the state of Gujarat. Hon'ble Supreme Court took note of the fact that u/s 73 of the Gujarat Man time Board Act 1981. all moneys received by or on behalf of the Board were to be credited to a fund called the general account of the minor ports and under section 74, detailed guidelines as noted at page 564 of the report, were there. The mode of dealing with deficit or surplus was contemplated u/s 75 of the said Act. Considering all these sections, the Hon'ble Supreme Court held that there could not be said to be any profit. Unless there was a profit motive, it cannot be said that an entity was carrying on any trade, commerce or business. 3.11. We further find that in case of Krishi Utpadan Mandi Samity (supra), the Hon'ble Allahabad High Court, while dealing with the proviso to section 2(15), inter alia, observed that main object is to be considered and incidentally 1f some profit 1s made and the said profit is used for charitable purpose the said trust/ Institution does not cease to be established for charitable purpose. 3.12. We further find that in the case of Muzaffarnagar Development Authority (supra), the ITAT following the decisions in the case of UP Avas Evam Vikas Parishad (supra); and M/s Khurja Development Authority Vs. CIlI (supra), allowed the assessee's appeal. 3.13. Further in the case of Sabarmats Ashram Gaushala Trust Vs. ADIT (E) (supra), we find that Tribunal has held that profit motive is must for holding an activity to be in the nature of trade, commerce or business. 3.14. In view of above discussion we hold that assessee Authority has been created with the object of general public utility which is a charitable object within the meaning of section 2(15) and the proviso to section 2(15) 1s not applicable because assessee Authority 1s not carrying out activity with any profit motive but the predominant object is welfare of people at large. to 235/LKW/2023 Page 20 of 22 (4) As per the Case of Haridwar Development Authority vs. Ld. CIT Hon'ble {TAT follow the decision taken by Hon’ble Allahabad High Court in case of CIT Vs. Krishi utapadan mandi samiti. At the time hearing in same case Ld. Counsel for the assessee in the rejoinder submitted that the decisions in the cases of Punjab Urban Planning & Development Authority (supra) & Jalandhar Development Authority (supra) are not applicable in the present case, because this Authority is constituted under the U.P. Urban Planning & Development Act, 1973 and it under the jurisdiction of Hon'ble Allahabad High Court so, as per the above (Haridwar Development Authority) case, assessee (RDA) jurisdiction is also same, so please follow the judgment of Hon'ble Allahabad High Court. (5) Any Builder never developed the city, they developed his project only upto the time of possession provided to his customers, after giving all possession Builder never come back for development of their old site, But in the case RDA, its developed there old site after giving possession its can be verified By expenditure done on RDS’s Old site such as Site development Indira nagar, site development ahiya Raipur, Munshiganj ete. (6) Assesse’s object is based on UP urban planning and development Act 1973, which is applied in UP State in after 1973. As per object of the act Developed the ‘Related District’ for the General Public utilities, and in year 2008 (Finance Act 2008) some amendments made, in proviso 2(15) that the society turnover 1s cannot be above Rs. 25 lakhs, if his nature related with trade, commerce, etc As per circular no. 2008 of Finance Act 2008 1s clearly motioned section 2(15) it’s based on of fact or law as applicable. In the case of related assessee, The UP urban planning and development 1973 is not amended its object after insertion, As per fact (Point No. 08) or proper physical examination by any of the competent Authority it can be decided that, Whether The object of The UP urban planning and development 1973 is purely for general Public Utilities of the related District or not. (7) We are submitting some more detail in favour of RDA they are as follows: (1) Any Builder never provided Installments facilities their customer, but RDA always at, because its follows the Government policies, as per every Government agenda, providing housing facilities to every poor Indian who is not able to purchase their own house without Installment. 1) Most of the decision taken by the RDA in board meetings, the member of the board is Govt officer, they are not a businessman, they never takes any profit or gains from RDA, They Shall takes any decision which shall be in favour of District Raebareli and their people, so there is no doubt, board’s decision are in favor of general public. (iii) At the end of the every month RDA, send Monthly progress report (MPR) to Awas bandhu Awas Bandhu checked the monthly performance of RDA. (iv) At the middle of the month performance budget call by the Gram vikas niyojak, (v) At the end of social report sends to the CDO office. (vi) Form point no 2to 5 all of authority, controlled, checked, constructed, planned etc. for RDA in the favour of general public. to 235/LKW/2023 Page 21 of 22 (vii) RDA work is like Police, as Police providing safety to us, like this, Any dwelling persons if deceased with encroachment, in their mohllas, town etc. in that case they can directly complained about this encroachment to RDA, RDA will takes action about this type of complains and take action they can deem fit. (viii) RDA doing social responsibility, & controlled Green Land, pond etc. it's not mean it is the favour of Farmer, it’s the favour general public, because without green land farmer can’t produced crops for us, and ponds is also important for conservation of rain water maintain water level in city area. (ix) As assessee 1s calming Depreciation in Income-Expenditure, but Preparation of Income Expenditure is only for notional purpose, Because Balance Sheet Cannot be prepare without preparing Income & expenditure account, so Income-Expenditure is very required for Balance Sheet, But ITR of the assessee has filed through Receipt Payment Account instead of Income expenditure, Please check the Receipt Payment Account, Depreciation entry was not passed through Receipt Payment Account, so please do not add deprecation as Income of Assessee. (xii) RDA preparing all books of account as required by law and showed at the time hearing. (xiii) RDA is not profit making entity used its entire surplus fund in development of Raebareli and their resides pergon, if any fund will remain of any Developed site that has been transferred to Municipal Corporation of Raebareli for development in future. Any other relief, which your good self may deem fit.”
It is stated at bar, the facts are identical as were in therefore, our finding in paragraph no. 7 rendered in shall apply mutatis mutandis to ITA. Nos. 233 to 235/LKW/2023. For the same reason, grounds of appeal of the assessee are allowed for statistical purposes.
In the result, appeals of the assessee are allowed for statistical purposes. Order pronounced in the open Court on 21/05/2025.