Relief to MIDC after land exempted from Income Tax

In a major relief to the Maharashtra Industrial Development Corporation (MIDC), the Income Tax Appellate Tribunal has a recovery notice from the income tax department on a piece of MIDC land.

The tribunal noted that the department cannot apply a tax on a land lease made by MIDC as the corporation only has land control rights and not ownership, which remain with the state.

"The corporation is not expected to use the land commercially or to make the profit out of it. Therefore, the court has taken a decision that the amount coming to the corporation is not eligible for taxation," the tribunal said in a recent order dismissing the tax claim.

An official statement issued by the state said, "due to the court order being applicable for all the appeals of the corporation, recovery of Rs 9,311 crore by income tax department is no longer payable.

The court has also directed to return Rs 395 crore recovered by the corporation with 12 percent interest."

The department had started tax collection on the amount leased from the land lease distributed by MIDC from 2006 to 2016. The statement further said in the past years, they collected Rs 9,311 crore. Apart from this, the department sealed the bank accounts of the corporation and recovered Rs 395 crore.

"Opposing the decision, the corporation had taken a stay order from the Supreme Court. The matter was referred to the income tax commissioner again for hearing, which was rejected. After this, MIDC had challenged to the decision of in the Appellate Tribunal," it said.

The statement further said in this ruling, other corporations such as Cidco, Mhada, and MMRDA, will also be benefited by this decision apart from other states.