New Delhi Municipal Corporation v. State of Punjab

7 SCC 339Reported decision1979#4374 most cited

What is New Delhi Municipal Corporation v. State of Punjab authority for?

An activity in the nature of trade and business is not considered trade or business under Article 289(ii) unless carried out with a profit motive. Mere sale of government properties or granting leases and licenses does not constitute trade or business.

27

judgments rely on this decision, according to BharatTax’s citation analysis of 366,005 Indian tax judgments — from 2015 to 2025.

Also referred to as

New Delhi Municipal Corporation v. State of Punjab · Article 289(ii) · trade or business · profit motive · government property sale · leases and licenses

Sections most often in play

Section 11Section 2(15)Section 10(20A)Section 12ASection 13(3)Section 154Section 13Section 13(1)(c)

Issues it is cited on

section 10(20a)section 11(2)(a)section 10(20)section 58section 12aa(3)section 13(8)section 13(3)section 4(2)section 60section 11(5)section 13(1)(d)advancement of general public utility

Judgments citing New Delhi Municipal Corporation v. State of Punjab

M/S. Bangalore Metro Rail Corporation Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle - 1(1)(2), Bangalore

In the result, all the appeals of the assessee as well as revenue’s appeal are partly allowed for statistical purposes

ITA 1113/BANG/2019[2012-13]Status: DisposedITAT Bangalore06 Apr 2023AY 2012-13

Bench: Shri N.V. Vasudevan & Shri Chandra Poojariassessment Year: 2011-12

For Appellant: Shri Srihari Kutsa, A.RFor Respondent: Shri Sankar Ganesh K., D.R
Section 2Section 3

…vernment. He submitted that the assessee passes all the tests necessary in the opinion of the Supreme Court in this case and qualifies itself as a State. 2.48 The nine judge bench of the Supreme Court in New Delhi Municipal Council v. State of Punjab, (1997) 7 SCC 339, has held that an activity can be described as trade or business only when it is carried on with profit motive. Accordingly, it held that only where a trade or business is carried on with profit motive, clause (2) of Article 289 would be attracted. Where there is no profit motive involved in any activity carried on by the State Government, the Cour…

M/S. Bangalore Metro Rail Corporation Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle - 1(1)(2), Bangalore

In the result, all the appeals of the assessee as well as revenue’s appeal are partly allowed for statistical purposes

ITA 1112/BANG/2019[2011-12]Status: DisposedITAT Bangalore06 Apr 2023AY 2011-12

Bench: Shri N.V. Vasudevan & Shri Chandra Poojariassessment Year: 2011-12

For Appellant: Shri Srihari Kutsa, A.RFor Respondent: Shri Sankar Ganesh K., D.R
Section 2Section 3

…vernment. He submitted that the assessee passes all the tests necessary in the opinion of the Supreme Court in this case and qualifies itself as a State. 2.48 The nine judge bench of the Supreme Court in New Delhi Municipal Council v. State of Punjab, (1997) 7 SCC 339, has held that an activity can be described as trade or business only when it is carried on with profit motive. Accordingly, it held that only where a trade or business is carried on with profit motive, clause (2) of Article 289 would be attracted. Where there is no profit motive involved in any activity carried on by the State Government, the Cour…

Additional Commissioner of Income Tax, Special Range - 1, Bangalore vs. M/S. Bangalore Metro Rail Corporation Limited, Bangalore

In the result, all the appeals of the assessee as well as revenue’s appeal are partly allowed for statistical purposes

ITA 1048/BANG/2019[2011-12]Status: DisposedITAT Bangalore06 Apr 2023AY 2011-12

Bench: Shri N.V. Vasudevan & Shri Chandra Poojariassessment Year: 2011-12

For Appellant: Shri Srihari Kutsa, A.RFor Respondent: Shri Sankar Ganesh K., D.R
Section 2Section 3

…vernment. He submitted that the assessee passes all the tests necessary in the opinion of the Supreme Court in this case and qualifies itself as a State. 2.48 The nine judge bench of the Supreme Court in New Delhi Municipal Council v. State of Punjab, (1997) 7 SCC 339, has held that an activity can be described as trade or business only when it is carried on with profit motive. Accordingly, it held that only where a trade or business is carried on with profit motive, clause (2) of Article 289 would be attracted. Where there is no profit motive involved in any activity carried on by the State Government, the Cour…

Assistant Commissioner of Income Tax (Exemptions) vs. Ahmedabad Urban Development Authority

C.A. No.-021762-021762 - 2017Supreme Court19 Oct 2022

Bench: HON'BLE THE CHIEF JUSTICE

…); the Gujarat Industrial Development Corporation (hereafter “GIDC”) and Gujarat Housing Board (hereafter “GHB”). Counsel submitted that all three corporations were established by or under statutes enacted by the Gujarat legislature; they were 25 (1997) 7 SCC 339 (hereafter “NDMC”) 27 treated as local authority under Section 10(20) of the IT Act, as it existed till 2003. Thereafter they were treated as charitable institutions engaged in activities involved in the advancement of public utility till the amendment of 2008. Learned counsel highlighted that the AUDA was created purely for the development…

Shri Vijay Makhija S/O Shri Govind Ram Makhija vs. The Principal Commissioner of Tax-I

ITA/81/2019HC Rajasthan29 Jul 2020

Bench: SABINA,PRAKASH GUPTA

For Appellant: Mr. Amit Chaudhary and Mr. Vijay ChawlaFor Respondent: Mr. Ashish Shrivastava, Senior Advocate with Mr
Section 2(15)Section 260ASection 3Section 38Section 38(1)Section 72

…ess or commercial receipts. This is in line with the larger Bench judgments of this Court in Shri Ramtanu Coop. Housing Society7 and NDMC8. 7 Shri Ramtanu Coop. Housing Society Ltd. v. State of Maharashtra, (1970) 3 SCC 323 8 NDMC v. State of Punjab, (1997) 7 SCC 339 Page 16 of 20 (Tax Case No.81/2019) 275. However, at the same time, in every case, the assessing authorities would have to apply their minds and scrutinise the records, to determine if, and to what extent, the consideration or amounts charged are significantly higher than the cost and a nominal markup. If such is the case, t…

The Principal Commissioner of Income Tax-II, Visakhapatnam vs. L. Suryakantham, Visakhapatnam

ITTA/280/2017HC Telangana08 Oct 2018

Bench: RAMESH RANGANATHAN,KONGARA VIJAYA LAKSHMI

…down with certitude of Constitution Bench under Article 145 (3). This is how the issue was placed before the Constitution Bench of the Hon’ble Supreme Court. 3. Later on in the case of Jaiprakash Associates Ltd. Vs. State of Madhya Pradesh and Ors, (2009) 7 SCC 339. “The Hon’ble Supreme Court observed that though some of the important factors have been addressed to by the Constitution Bench in Jindal case, certain other important constitutional issues are involved 10 / 54 because of the approach so far as the levy on transport cases indicated above are concerned is conceptually and contextually dif…

Pr. Commissioner of Income Tax (Central-1) vs. Late Shri Sudhir Sareen

ITA/284/2015HC Delhi06 Jul 2015

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE VIBHU BAKHRU

Section 375

…cted matters Page 16 of 193 (a) The Supreme Court has relied upon Article 372(2) and the dissenting judgment of Chief Justice A. M. Ahmadi (as he then was) in NDMC v. State of Punjab, (1997) 7 SCC 339 to conclude that pre-constitutional laws do not enjoy the same degree of presumption of constitutionality as those which were enacted after the Constitution came into force. The appropriate provision that the court ought to have discussed is Article 13(1) of the Constitution. Even though, the court notices its judgment in John Vallamattom v. U…

New Delhi Municipal Corporation v. State of Punjab (7 SCC 339) — Cited in 27 Judgments | BharatTax