ACIT Vs Jamnagar Area Development Authority (ITAT Ahmedabad)
The Income Tax Appellate Tribunal, Ahmedabad Bench, decided two appeals filed by the Revenue against separate orders passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for Assessment Years 2016–17 and 2018–19. Since identical issues were involved in both years, the Tribunal considered them together.
The Revenue challenged the findings of the CIT(A) holding that the activities of the assessee, an urban development authority constituted under the Gujarat Town Planning and Urban Development Act, 1976, were not in the nature of trade, commerce, or business. On this basis, the Revenue contended that the assessee was not entitled to exemption under Section 11 of the Income Tax Act, 1961 and that the case fell within the first and second provisos to Section 2(15). The Revenue also disputed the deletion of various additions and disallowances, including additions relating to government grants, service and amenities fees, disallowance of accumulation under Sections 11(1)(a) and 11(2), and disallowance of capital expenditure.
At the outset, both parties fairly submitted that the issues raised in the present appeals were already covered by an earlier decision of the Tribunal in the assessee’s own case for Assessment Year 2017–18. The Tribunal therefore reproduced and relied upon the operative portion of that earlier order.
