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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 ..... it cannot be treated to be an "Authority" constituted in India "for the purposes of planning, development or improvement of cities, towns or villages or both" as stipulated under Section 10(20A) of the Act so as to be entitled to avail exemption thereunder ? (iii) Whether on a true and correct interpretation of the preamble of U.P. Industrial Development Act (Act No.19), 1962 and various provisions as appearing therein, as are related to setting of a requisite type of corporation and defining its area of operation, UPSIDC was liable to be treated as an 'authority' for the purposes of its claim for exemption under Section 10(20A) ? 4. The undisputed facts are that U.P. State Industrial Development Corporation (hereinafter referred to as 'UPSIDC') is a company incorporated under the Companies Act, 1956 (hereinafter referred to as 'Act, 1956') and is a State Government undertaking incorporated inter-alia to promote, establish and execute industries, works, projects and enterprises and/or to provide aid or assistance to industrial undertakings, and/or to establish industries in Industrial Areas and Industrial Estates in State of U.P. 5. UPSIDC claimed exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of present appeals, may be reproduced as under: "11. From the facts noticed by Tribunal, in the impugned judgment, it is said that Assessee M/s U.P. State Industrial Development Corporation Ltd. (hereinafter referred to as 'UPSIDC'), is a company registered under the Companies Act, 1956 and wholly owned by State of Uttar Pradesh, therefore, it is a State undertaking. The objects and purposes incorporating the aforesaid company is to acquire and develop land for the purposes of promoting industrialisation in State of Uttar Pradesh. UPSIDC, got the land acquired through State of Uttar Pradesh for developing industrial area, allot land to entrepreneurs and receives premium and lease rent etc., in instalments from such Entrepreneurs" "15 UPSIDC was incorporated under the Companies Act, 1956 on 29th March, 1961. The object of incorporation, mentioned in the said letter was to provide loan, term advances to Industrial Entrepreneurs, by providing developed land on deferred payment basis and also loans. However, from the aforesaid order, we find that there is also some contradictory facts and in paragraph 7, it is mentioned that UPSIDC was formed under U.P. Industrial D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is different then UPSIDC and the said legislation in fact intended for complete take over of UPSIDC by the Corporation, who would work to give effect to the objectives of UPID Act, 1962. 21. Therefore, aforesaid Act would not provide any assistance for the purposes of understanding functions and objectives for which UPSIDC was incorporated in 1961." 12. In the present appeals, thus, the claim of UPSIDC about its origin under UPID Act, 1962 cannot be accepted. 13. Now we come to consider the above questions by excluding the applicability of UPID Act, 1962. Unless appellant is an authority constituted in India by or under any law enacted, Section 10 (20A) of Act, 1961 shall not be attracted. This is evident from a bare reading of the aforesaid provision which reads as under:- "10(20A). any income of an authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both;" 14. This provision has been considered by Supreme Court in Gujarat Industrial Development Corporation vs. CIT (1997) 227 ITR 414. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, and for purposes connected with the matters aforesaid as can be discerned from the preamble thereof. 10. Section 2 (g) of the Act defines "industrial area" as any area declared to be an industrial area by the State Government by notification in the Official Gazette which is to be developed and where industries are to be accommodated. Section 2(n) defines "industrial estate" as any site selected by the State Government where the Corporation builds factories and other buildings and makes them available for any industries or class of industries. Section 13 of the Gujarat Act enumerate the functions of the Corporation and they contain, inter alia, "to promote and assist in the rapid and orderly establishment, growth and development of industries in the State of Gujarat. 11. We have no doubt that a proper planning is absolutely necessary for creation of an industrial area. Inside roads, sub-roads buildings, sanitation, parks and other amenities have also to be provided in a planned industrial area as per the modern concept of any industrial complex. Even educational institutions may have to be provided in such complex. Therefore, development of industrial area would have its direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an or rural areas, for public good. When object is such, an interpretation which would preserve it should be accepted even if the provision is capable of more than one interpretation. 19. If we examine the present case in the light of aforesaid exposition of law laid down in Gujarat Industrial Development Corporation vs. CIT (supra) we find that the first limb of requirement to attract Section 10(20A) of Act, 1961 that one who is claiming exemption thereunder must be "an authority" constituted by or under any law enacted in India, is not satisfied. Therefore, even if second limb of Section 10(20A) of Act, 1961 is satisfied, appellant- UPSIDC will not qualify for exemption since satisfaction of both requirement is must. 20. A similar question was considered by a Division Bench of Karnataka High Court in M/s Karnataka State Small Industries Development Corporation Ltd vs. The Assistant Commissioner of Income Tax in I.T.A. No. 1281 of 2006 decided on 3rd September, 2012. Therein also Karnataka State Small Industries Development Corporation (hereinafter referred to as 'KSSIDC') claimed exemption under Section 10(20A) of Act, 1961. It was negated by assessing authority holding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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