As the Activities of the Assessee are Under the Statutory Obligation under Development Act 1973, The Activities Can Not be Treated as Trade, Commerce or Business: ITAT Agra

In the case of Agra Development Authority vs DCIT, ITAT Agra has held that after respectfully following the decision of the coordinate bench in the matter of JHANSI DEVELOPMENT AUTHORITY (supra) we hold that the assessee activities like Income from sale of plots/ lands, Freehold conversion income, interest income from instalments, development charges, building plan sanction fees, lease rent , income from stamp duty , Building rent, Sale of masterplan book/tender form, Cycle/scooter/car stand charges and Miscellaneous incomewere discharged by the assessee in accordance with the objects of the Development Act 1973 and other statutory obligations , and therefore we have no hesitation to hold that all these activities are charitable in nature.The activities of the assessee in receipt of amount from such activities cannot be examined in isolation, as the assessee was propelled to do all these activities under the statutory obligation under Development Act 1973 and therefore even if there is receipt more than the threshold limit, then also these activities which were driven by the Development Act, 1973 cannot be held to be in the nature of trade commerce or business.

We may also point out that various other authorities including Aligarh Development authority, NOIDA development authority etc, which are discharging the similar functions as that of the assessee and were created under the Development Act 1973, wereheld to be entitled for deduction under Section 11 the Income Tax Act by ITAT, Delhi. In the light of the above we are of the opinion that the assessee is also entitled to deduction under section 11 of the Income Tax Act for the activities mentioned hereinabove.

In the light of the above findings, the appeals of the assessee are allowed and the appeal of the revenue is dismissed.

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