| The Tax Publishers2020 TaxPub(DT) 3544 (Chd-Trib) : (2020) 207 TTJ 0001 INCOME TAX ACT, 1961
Section 4 Section 12A
Where assessee fund was constituted for development of major infrastructure projects for the benefit of State, as there was no separate entity, distinct from State was created by virtue of creation of assessee-fund and expenditure out of Fund was incurred only with directions and approval of State Government, therefore, assessee belonged to State and consequently, IDC receipts and interest on FDRs were not liable to tax in hands of assessee in assessment years 2009-10 and 2013-14.
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Income - Chargeability of Infrastructure development charges (IDC) and FDs - Assessee - infrastructure development fund created under Haryana Development and Regulation of Urban Areas Act, 1975--Position prior to assessment year 2013-14
Assessee- Infrastructure Development Fund was constituted for development of major infrastructure projects for the benefit of State. Assessee received Infrastructure development charges (IDC), paid by various colonizers while setting-up housing project in the State of Haryana. Assessee contended that as administration of assessee vested in a high-powered committee and it merely contributed to infrastructure projects approved by government, therefore fund entirely vested in State. Revenue alleged that while filing for registration under section 12A, assessee itself admitted it to be separate entity from State. Held: There was no separate entity, distinct from State was created by virtue of creation of assessee-fund. Expenditure out of the Fund was incurred only with the directions and approval of State Government. Also, there was no merit in argument of revenue that assessee itself admitted being a distinct and separate entity from the State, while applying for grant of registration under section 12A and filing Income Tax Returns, it could not thereafter take a contrary stand. Merely because assessee interpreted facts relating to its creation and administration as demonstrating itself to be an entity distinct and separate from the State, while seeking registration under section 12A, it did not stop assessee from taking a contradictory stand, which was in accordance with law, in any other proceeding. Further, merely because assessee no longer required approval of the Finance Department of the State while utilizing funds, it did not alter or impinge upon its character as being money of the State kept aside for specific purpose. Therefore, assessee belonged to State and consequently, the IDC receipts and interest on FDRs were not liable to tax in hands of assessee in assessment years 2009-10 and 2013-14.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2009-10, 2013-14 & 2014-15
INCOME TAX ACT, 1961
Section 4
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