DCIT, Exemption circle, Ghaziabad Vs. Kanpur Development Authority

Parties Involved

Facts Summary

The assessee, Kanpur Development Authority (KDA), is an authority notified under the Uttar Pradesh Urban Planning (Development and Registration) Act 1973. KDA is tasked with promoting and securing the development of the development area according to plan. It has the power to acquire, hold, manage, and dispose of land and other property, carry out building, engineering, mining, and other operations, execute works in connection with the supply of water and electricity, dispose of sewage, and provide and maintain other services and amenities. KDA enjoyed exemption under section 10(20A) of the Income Tax Act up to the Assessment Year 2002-03. From 01.04.2003, this provision was omitted, making its income taxable thereafter. For the Assessment Year 2014-15, KDA declared a profit of Rs 157,72,14,688/- on total income/gross receipt of Rs 393,47,55,385/-, claiming exemption under sections 11 and 12 of the Act. The Assessing Officer (AO) made additions to the assessee's income, which were subsequently challenged and partly allowed by the Commissioner of Income Tax (Appeals) (CIT(A)).…

Legal Issues

• 1. Deletion of additions of Rs.157,72,14,688/- made by the AO against surplus raised through commercial activities.
• 2. Deletion of additions of Rs.74,65,69,311/- made by the AO against infrastructure development fund without being credited to Income and Expenditure account.
• 3. Deletion of depreciation of Rs.1,69,33,620/- made by the AO while capital expenditure on fixed assets have been allowed in respective years.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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