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TMI Blog2016 (7) TMI 1392X X X X Extracts X X X X X X X X Extracts X X X X ..... see and in favour of Revenue by holding that since UPSIDC is a company incorporated under Act, 1956 and not an authority constituted by or under any enactment in India, therefore, is not entitled for claiming exemption under Section 10(20A) of Act, 1961. - Income Tax Appeal No. - 231 to 235 of 2006 - - - Dated:- 5-7-2016 - Sudhir Agarwal and Prabhat Chandra Tripathi, JJ. S.K. Garg for the Appellant A.N. Mahajan,B.Agrawal for the Respondent ORDER: 1. Heard learned counsel for the parties. 2. These appeals are connected having arisen from common judgment and order dated 17.11.2005 passed by Income Tax Appellate Tribunal (Lucknow) in five connected appeals i.e I.T.R. Nos. 1216, 1217, 1218, 1219 and 1220 relating to assessment years 1977-78, 1978-79, 1981-82, 1985-86 and 1987-88. 3. The appeals were admitted on the following three substantial questions of law:- (i) Whether the ITAT, was legally correct in holding that UPSIDC did not have the status of Authority as stipulated in section 10(20A) of the Act and in rejecting its claim for exemption, thereunder ? (ii) Whether the Tribunal was legally correct in holding that in the absence of a specific no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity it is difficult to advance any submission so as to claim status of local authority for UPSIDC. 8. Thereafter, he proceeded and confined his arguments with respect of Section 10(20A) of Act, 1961, founded whereunder three substantial questions of law as noted above were formulated and appeals have been admitted. 9. Though in memo of appeals, appellant has claimed its existence under U.P. Industrial Development Act, 1962 (hereinafter referred to as UPID Act, 1962') but learned counsel for appellant fairly stated that neither before Tribunal nor before this Court, appellant could produce any notification showing its creation or existence under UPID Act, 1962. 10. In fact, learned counsel for appellant fairly admits that there is no notification issued under Section 3 of UPID Act, 1962 resulting in creation of UPSIDC thereunder, therefore, claim of appellant that it has been constituted under UPID Act, 1962 is not founded on any material on record. On the contrary, it is an admitted case of appellant that it is a company incorporated under Act, 1956. 11. We also find that status of UPSIDC has been discussed by this Court in I.T.A. No. 191 of 2006 connected with I. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spose of property, both movable and immovable, and to contract, and do all things necessary for the purposes of this Act. 17. Term 'corporation' is also defined in Section 2(d) of UPID Act, 1962, and reads as under : 2(d) Corporation means the U.P. Industrial Development Corporation established under Section 3; 18. Therefore, what was contemplated in Act, 1962, is a 'Corporation' named 'U.P. Industrial Development Corporation, while, Assessee in question was incorporated as U.P. State Industrial Development Corporation Ltd. and came into existence much before the enactment of UPID Act, 1962. Whether there was any change in the name of Corporation at any subsequent point of time is not known. 19. Section 12 of UPID Act, 1962, on the contrary shows that 'Corporation' under the aforesaid Act, shall take over and employ all the existing staff serving for the purposes in U.P. State Industrial Development Corporation etc. who would give their willingness to serve in the Corporation. 20. Section 13 of UPID Act, 1962, which discusses the functions and powers of Corporation, further provides that Corporation would take over and manage industr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by law for the purpose of planning development or improvement of cities, towns and villages or both. 16. This Court finds that in Gujarat Industrial Development Corporation vs. CIT (supra) that GIDC was created under a provincial enactment for the purpose of planning or development or improvement of cities, towns or villages or in combination of them. Court also negated the view taken by High Court that the second limb of the requirement was not satisfied since GIDC was established for the purpose of developing or establishing industries in any particular area and not for the purpose of planning developing or improving a particular city, town or a particular area. This view taken by High Court was not approved by Supreme Court and referring to the provisions of GID Act, 1962, Court held that second alternative of second limb of Section 10(20A) of Act, 1961, as noticed above is satisfied. Relevant observations, in this regard, as contained in para 9, 10 and 11 of judgment are reproduced as under:- 9. The Gujarat Act was enacted to make special provision for securing the orderly establishment of industries in industrial areas and industrial estates in the State of Gujarat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Corporation will receive moneys for disposal of lands buildings and other properties and also that the Corporation would receive rents and profits in appropriate cases. Receipts of these moneys arise not out of any business or trade but out of sole purpose of establishment growth and development of industries. The Corporation has to provide amenities and facilities in industrial estates and industrial areas. Amenities of road, electricity, sewerage and other facilities in industrial estates and industrial areas are within the programme of work of the Corporation. 18. It was also held that the word development under Section 10(20A) of Act, 1961 should be understood in its wide sense. There is no warrant to exclude all development programmes relating to an industry from purview of the word development in the said sub-section. There is no indication in Act, 1961 that development envisaged should confine to non-industrial activities. Development of a place can be accelerated through varieties of schemes and establishment of an industry is one of the modes for developing an area. Court also observed that the purpose of granting exemption from income-tax to certain auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages or for both. KSSIDC was not constituted under any law. It was incorporated pursuant to a resolution of Government of Karnataka. The objectives and purposes for which it was incorporated and manner of its creation under Companies Act, cannot be equated with the authority constituted in India by or under any law enacted. Moreover, KSSIDC is not discharging functions of housing accommodation and also planning and development of cities, towns and villages or both. Hence, KSSIDC was not held entitle to claim exemption under Section 10(20A) of the Act, 1961. 22. Some part of observations and findings of Karnataka High Court with regard to purpose and objective for which KSSIDC was created is not consistent with the law laid down in Gujarat Industrial Development Corporation vs. CIT (supra) and to that extent we find ourselves in respectful disagreement thereto but the first part that KSSIDC was a 'company' incorporated under Act, 1956 and not an 'authority' constituted under any law enacted in India is fully applicable in the present case a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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