KARNATAKA INDUSTRIAL AREA DEVELOPMENT BOARD, BENGALURU Vs. ADDITIONAL DIRECTOR OF INCOME TAX (EXEMPTIONS), BENGALURU

JUDGEMENT

(1.) Mr.Sanmathi E.I, learned counsel for the appellant.

(2.) This appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as the Act , for short) has been preferred by the revenue. The subject matter of the appeal pertains to the Assessment year 2009-10. The appeal was admitted by a Bench of this Court vide order dated 09.08.2017 on the following substantial question of law:

(3.) The facts leading to filing of this appeal briefly stated are that the assessee, namely, Karnataka Industrial Area Development Board is a statutory body constituted under Section 5 of the Karnataka Industrial Area Development Act, 1966 (hereinafter referred to as the KIAD Act for short). The assessee filed the returns of the income on 24.02.2010 for the assessment year 2009-10. The assessing officer by an order dated 23.11.2011, inter alia held that the assessee had earned a profit of Rs.155,76,64,004/- for the year ending 31.03.2009 and the aforesaid profit was 80% of the total income. It was held that the assessee has earned profits systematically over the last few years and the activity of the assessee amounts to commercial in nature as it is engaged in the sale of land and in providing services. It was further held that the Director of Income Tax has cancelled the registration granted under Section 12A of the Act vide order dated 28.10.2011 and therefore, the income of the assessee can be computed under the normal provisions of the Act. The assessing officer denied the exemption to the assessee by invoking the provisions of Section 2(15) of the Act and concluded the assessment. Being aggrieved, the assessee has filed an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals), vide an order dated 16.02.2015 has dismissed the appeal preferred by the assessee. The assessee thereupon, approached the Income Tax Appellate Tribunal (hereinafter referred to as the Tribunal for short) by filing an appeal. The Tribunal vide order dated 04.09.2015 allowed the appeal preferred by the assessee and inter alia held that the Proviso to Section 2(15) of the Act is not applicable to the assessee. In the aforesaid factual background, the Revenue has filed this appeal.