RAJASTHAN STATE INDUSTRIAL DEVELOPMENT AND INVESTMENT CORPORATION LIMITED Vs. ASSISTANT COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This appeal filed by the M/s. Rajasthan State Industrial Development & Investment Corporation Limited (hereinafter called as the "RIICO") is directed against the order dtd. 28/5/2018 passed by the Income Tax Appellate Tribunal, whereby the learned Tribunal has remitted back the matter to the Assessing Officer.

(2.) The facts of the case are that the assessee appellant- RIICO is a Rajasthan State Government Enterprise. The Board of Directors of the assessee-appellant consists of senior officers of the cadre of Indian Administrative Services and overall management and control is under the supervision of Government of Rajasthan. The assessee-appellant is regularly filing its income tax returns under the provisions of Income Tax Act from time to time after getting the books of accounts audited as per the provisions of Companies Act and Income Tax Act. The books are also separately audited by the office of Comptroller & Auditor General. For the assessment year 2006-2007, the assessee appellant filed its return of income on 27/10/2006 declaring therein total income at Rs.43,73,82,600.00. The return of income was subsequently revised on 24/8/2007 declaring therein total income at Rs.43,73,82,600.00. The assessee appellant's primary objective was to set up of industrial areas in the State of Rajasthan such as SEZ parks, Information Technology parks, Bio- Technology parks, Stone parks, Textile parks, Agro parks, etc., for which it acquired lands and spent substantial amount towards creating infrastructural facilities so as to enable setting up of industries in such industrial parks by way of allotment/auction. The land acquired by the assessee appellant for the purpose of creating industrial parks is stock-in-trade and the assessee appellant carries out development activities in such industrial areas. Assessee appellant valued its closing stock of land at actual direct development expenditure (less grant utilized) incurred on the area in stock. The management realizing that disposal/realization of land under litigation/encroachment is not possible in near future, it was considered appropriate to value such stock of land at ZERO price. Accordingly datas were collected from various regional managers of such land. After getting the feedback, such land under litigation/encroachment was valued at Rs.NIL. The following disclosure was made in the notes to accounts:

(3.) Relevant and sufficient disclosures and notes for adopting the said valuation policy were duly disclosed in the Audit Report which was duly approved by the Board of Directors and thereafter by share holders in their Annual General Meeting.