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TMI Blog2023 (4) TMI 1346X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT (Exemptions) erred in law and on facts invoking the provisions of Sec. 263 if the Act to hold scrutiny assessment order passed u/s 143(3) of the Act as erroneous and prejudicial to the interest of Revenue. 2. Ld. CIT (E) erred in law and on facts in holding order as erroneous and prejudicial to the interest of revenue on account of AO having allowed capital expenditure of Rs. 2, 03, 54, 26,000/- without properly examining the expenses in view of provisions of Sec. 13(8) of the Act as well as case records of preceding year and without obtaining any supporting details and/or proper verification. 3. Ld. CIT (E) erred in law and on facts holding order passed by AO following favorable judgment of Hon'ble Gujarat High Court in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pal CIT, if the exemption claimed by the assessee is withdrawn in the light of the provisions of section 13(8) of the Act, then the capital expenditure is also required to be disallowed and added back to the total income of the assessee. The Principal CIT observed that in the immediately preceding year i.e. assessment year 2016-17, the capital expenditure was disallowed by the then AO in the light of the provisions of section 13(8) of the Act. However, during the year under consideration, the AO has allowed the capital expenditure incurred by the assessee amounting to Rs 2,03,54,26,000/-. In view of the above, the Principal CIT held that the order passed by the assessing officer, by allowing the above claim of the assessee with respect to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order passed by the Gujarat High Court and held that Statutory Corporations, Boards, Authorities, Commissions, etc. (by whatsoever names called) in housing development, town planning, industrial development sectors are involved in advancement of objects of general public utility, and are therefore entitled to be considered as charities in general public utility categories. Accordingly, since both the Gujarat High Court as well as Honourable Supreme Court have both decided the issue in favour of the assessee, the order passed by the assessing officer cannot be held to be erroneous and prejudicial to the interests of the revenue. Further, the counsel for the assessee placed reliance on the case of GM Mittal Stainless Steel 263 ITR 255 (SC), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 or section 12 shall not be available to the assessee, if the first proviso to section 2(15) of the Act becomes applicable in case of such person. However, we observe that at the time when the 263 proceedings were initiated by the Principal CIT, the jurisdictional Gujarat High Court had already decided the issue in favour of the assessee and had held that assessee-society constituted under Gujarat Town Planning and Urban Development Act, 1976, to execute works in connection with supply of water, disposal of sewerage and provision of other services and amenities, could be said to be providing general public utility services within the meaning of section 2(15) of the Act. Further, subsequently the Supreme Court of India also affirmed/upheld ..... X X X X Extracts X X X X X X X X Extracts X X X X
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