DCIT (Exemption) Vs Rajkot Urban Development Authority (ITAT Ahmedabad)
ITAT Ahmedabad held that exemption u/s. 11(1)(2) and 11(1)(a) of the Income Tax Act duly admissible to Rajkot Urban Development Authority (RUDA) since the activities were not commercial in nature.
Facts- The assessee, Rajkot Urban Development Authority (RUDA), is a local authority established under the Gujarat Town Planning and Urban Development Act, 1976. The appellant is registered u/s. 12AA of the Income Tax Act, 1961, which grants it certain exemptions typically available to charitable or public utility organizations. For the relevant A.Y., the assessee filed its income tax return, declaring a total income of Nil after claiming exemptions u/s. 11(1)(2) and 11(1)(a) of the Income Tax Act.
During the assessment proceedings, AO denied exemption u/s 11(1)(2) and 11(1)(a) of the Income Tax Act to the assessee. CIT(A) allowed the appeal of the assessee. Being aggrieved, revenue has preferred the present appeal.
Conclusion- Held that the CIT(A), following the decision of the Hon’ble Gujarat High Court in the case of the Ahmedabad Urban Development Authority (AUDA), had correctly allowed the assessee’s appeal for the assessment years 2009-10 to 2014-15, affirming that its activities were of a public utility nature and not commercial in nature.
