Gujarat Industrial Development Corporation v. The Commissioner Of Income Tax

A GUJARAT INDUSTRIAL DEVELOPMENT CORPORATION v. THE COMMISSIONER OF INCOME TAX AUGUST 20, 1997 B [B.N. KIRPAL AND K.T. THOMAS, JJ.] Income Tax Act, 1961-Section 10(20A)-Gujarat Industrial Develop-ment Act, 1962-Section 2(9)(n) & 13-lncome of Appellant from industrial development-Whether falls within ''planning, development or improvement C of cities, towards villages or both''-Held, yes. The Appellant Corporation was formed under the Gujarat In-dustrial Development Act, 1962, for the the purpose of securing the orderly establishment of industries in the State of Gujarat. The Appellant claimed exemption from payment of Income Tax under Sec. 10(20A) of the Act of D 1961. The claim of the Appellant was disallowed by the Income Tax Officer but allowed by the Appellate Commissioner. On second Appeal the Tribunal reversed the view taken by Appellate Commissioner. The High Court dismissed the claim of the Appellant and held that since develop-ment of an area would require roads, buildings, sanitation, parks, sports, educational institutions and several other amenities, a city or town or village could be well developed without any industry. On appeal, the Appellant contended that as per Section 10(20A) if F an Authority is constituted for the purpose of planning or development or improvement of any city or town or village or a combination of them, the income of such Authority is not exigible to Income Tax. Allowing the Appeal, the Court HELD : 1.1. The development of industrial area would have its direct impact on the development or improvement of that part of the city, town or village where such area is located. Delinking industrial area from the scope of development of any area is, without any practical sense. [ 470-F-G] · 1.2. The word "development" in Section 10(20A) for the I.T. Act should H be understood in its wide sense. These is no warrant to exclude all develop· 466 ment programmes relating to any industry from the purview of the word A "development" in the said sub-section. There is no indication in the Act that development envisaged therein should confine to non-industrial activities. Development of a place can be accelerated through varieties of schemes and establishment of industries is one of the modes of developing an area. [471-E-F] B Shri Ramtanu Co-operative Housing Society Ltd. & Anr. v. State of Maharashtra and Ors., [1970) 3 SCC 323, relied on. 1.3. One of the reasons for incorporating a specific provision of exemption from income tax such as sub-section 10(20A) is to protect public bodies created under law for achieving the purpose of developing urban or C rural areas for public good. When the object is such, an interpretation which would preserve it should be accepted even if the provision is capable of more than one interpretation. That principle of interpretation is very much applicable to fiscal statutes also. [471-G] State of Tamil Nadu. v. M.K Kandaswami, [1976) 1 SCR 38; Calcutta D Jute Manufacturing Company & Anr. v. Commercial Tax Officer & Ors., JT (1997) 5 SC 690, referred to. 1.4. The authorities constituted by law for facilitating all kinds of development of cities, towns and villages for public purposes shall not be E subjected to the liability to pay income tax. The High Court interpreted the exemption clause too rigidly and narrowly which result in the anomaly of bringing authorities like appellant Corporation within the tentacles of income tax liability while the authorities dealing with housing schemes which provide houses to private individuals would stand outside the taxing sphere. [ 472-B-C] F CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2950 of 1985 Etc . . From the Judgment and Order dated 28.6.84 of the Gujarat High Court in l.T.R. No. 37 of 1976. Sameer Parekh, Ms. Musharaf Chawdhary for P.H. Parekh for the appellants. Ranbir Chandra, Arun K. Sharma and B.K. Prasad for the Respon- SUPREME COURT REPORTS [1997] SUPP. 3 S.C.R. soar warareta Profa afr 1998] 3s few 24. 38 fia al Gare SH A Vest BA UA 1534, 124% si 505(2) H eas feu 7 saeF feaaffair defats a ofa we ae fra ee HoT area @ fae ferro apaeTa A ga Pela F aga sitranftan wehfet~ at 81 de fe wea St aa aaa fen a gan 2oaSF SoeaA TT A SH fore aE eT aTSenaation& fares ah amr farfaa feu ae Y saa sa ds orasit F sieita srraei S fae anaesWaew- grafted O11 fifvaa wa 8 orttenelt ar franco sa sree. F fore sel Fara ST fee aPret aMaI BATse veapha S sre F few, Var Tals SK WAM SK gon ar Mas HEM, aifaH was siew Ue He B BawBi TRAM Ser SHIRT at Gtfee Fore sre HANS Sah St reatTaal ee wate farTe fos wesan & feet aie ot aca A eetaeT|| anSO, [1998] 3 Se few 47 20 ST, 1997 dfaer, 1950 — aqeSe 289(1) — wafad area safer, 1961 — IT 10(20-%) — aaa a a —|arttenelqa wider 3% ARTaf feen 10(ara) 20%) & aaaa a BEII CaSoe — se MAM aa arewai| TSR stelfire free Pera a ES Wee aarprene ee i feet em Pea A fae at ort 289(1)STIR SUPT St UAT 10( 20%) H seta HAMA a Ge I eT fra! Melee saw aeiiet > eral Hl HAA TAT |arate anita aaftrnco 3 aera SE BN Stee He at See feat Sea aes A ota fe A -Sfinr — area aifafrer at err 10 (20e)fare” wee Hr Fee Sef SeTeT ST ASU Sb STURTSi faara weg ah vftaa S final weir O dana wot faare eee al at arrafsis wet at ae srereecha aetart ated | farat Les Hi faenra ar ae fenes at SHAT V Als Wars at ST Tene S Si Sein Ht LITTHEAT AASfdh ateal FS ws 21 rae a we a fade sede wel a1 Fa fH SuaNT 10 (20%) we aT csara& fore wet a arin dat S fara &, wits & fore fatearea gfe cite Preerii a deat wertREA SL re Gea SeNa Ter Sct ten Pata wl gas sae S, Tale fore Sefee yet at Sasa SH TH a|siftren freer ait a dt at facta oar ae fears Uses Sergi at ot cy eta ei aaa: feerfa ere & fee citswater & fee wedi, tere stk ora Fas ake Hh ferenre & Ferg Party are fsa oafroee srroF H afc_wat a1 Che 13, 143i 15)--—| career at Fok area ae So eit 3 fe =p atra—ara ged aides F ae wet sera Tran fer aa sitettfires farcare wt sree safes cat SRT 10 |(20%) & set, wad atk wei S arise, faara a ger S wise S fore a Set fre’ ae SH sits CAM 2, aienell, Ws sitar fama Fr (sas Fra") Fe sngaleas ster, wee Glaent sTHse 299(1) & atta atte aaa siren autres HH UT 10 F Gs (20%) ch aes HIT A ee BH Ta Tea| PTAseaaera at is ats FSi rat a aR ane fea! gafeTy, Frere 4 feers gaTSIT BT Te Ati HIRTatel 3. Ind silehtte fase sfatra, 1962 (dag A SATA afafraa’) & ae waft Ind silehtte fase sfatra, 1962 (dag A SATA afafraa’) & ae waft silehtte fase sfatra, 1962 (dag A SATA afafraa’) & ae waft fase sfatra, 1962 (dag A SATA afafraa’) & ae waft sfatra, 1962 (dag A SATA afafraa’) & ae waft 1962 (dag A SATA afafraa’) & ae waft (dag A SATA afafraa’) & ae waft A SATA afafraa’) & ae waft SATA afafraa’) & ae waft afafraa’) & ae waft & ae waft ae waft waft[[at]] eniteoF a after3. Ind silehtte fase sfatra, 1962 (dag A SATA afafraa’) & ae waft Ind silehtte fase sfatra, 1962 (dag A SATA afafraa’) & ae waft silehtte fase sfatra, 1962 (dag A SATA afafraa’) & ae waft fase sfatra, 1962 (dag A SATA afafraa’) & ae waft sfatra, 1962 (dag A SATA afafraa’) & ae waft 1962 (dag A SATA afafraa’) & ae waft (dag A SATA afafraa’) & ae waft A SATA afafraa’) & ae waft SATA afafraa’) & ae waft afafraa’) & ae waft & ae waft ae waft waft[[at]] eniteoF aarene sfraeretat ated A fait SH saree ara Bar Te ae aA Sa sik sa FT RK areSH Ta A A a Geechee & aiftea a fee F Mea eifews Fy SMe a GS HNA fewer A AeIAH TATSTEAATH-.(anita) 3 Sat snert we Ste sat at aera Tar | a Tas fareA facta artter A oe farreaa st Gate ct aSAYA ATA SAATA ST STA Te RTH aH (AMT) SRT Sa He A Tete FAA| FAH WAN Sea ALATAAUB aS fore Sh wer feta Fare 1a, Tee Sse H eyes 289(1) A Bahra A TAU HAH ATISeSRT 10( 20%) @ Saifere em | Star SR tha @, Sea aTA HT Ser Se FaeForge A Tea aa Tel4. Ra ai 1 TA, Sa Ta A arene aS FemaS faeryTAR SAAT area 9 elI IT fe 10( ae 20%) Shas Sewers H arqed cse 289( Mf 1)A LSAT, BH Bey WHT GH YA SH aT eT WT arene atfafrera st oT 10 (20%)FA WARE (ay dy Frara tari & fea Bf artaBe atk seat orageaae st oft Her SH ferg, a Med, AT AT.