Tuticorin Port Trust, Tuticorin V. ACIT, Tuticorin

CO 125/CHNY/2012

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8219 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 08-01-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 08-01-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 02-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N DEVANATHAN
• Assessee Lawyers: A K DHALL IRS
• Keywords: Depreciation; Charitable institution; Retrospective amendment; Capital expenditure
• Section: 143(3); 12AA; 10B; 154

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL C BENCH, CHENNAI. BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT & SHRI S.S. GODARA, JUDICIAL MEMBER I.T.A. NO. 1060/MDS/2012 ASSESSMENT YEAR : 2008-09 & C.O. NO. 125/MDS/2012 [IN I.T.A. NO. 1060/MDS/2012] THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE I, TUTICORIN. VS. TUTICORIN PORT TRUST, HARBOUR ESTATE, TUTICORIN 628 004 [PAN: AAALT0206D] (APPELLANT) (RESPONDENT/ CROSS OBJECTOR) APPELLANT BY : SHRI A.K. DHALL, IRS, CIT RESPONDENT BY : SHRI N. DEVANATHAN, ADVOCATE DATE OF HEARING : 08.01.2013 DATE OF PRONOUNCEMENT : 08.01.2013 ORDER PER S.S. GODARA, JUDICIAL MEMBER THIS APPEAL BY THE REVENUE AND CROSS OBJECTIONS AT THE BEHEST OF THE ASSESSEE, EMANATE FROM THE ORDER OF THE COMMISSIONE R OF INCOME TAX (APPEALS) I, MADURAI DATED 29.02.2012 IN ITA NO. 01 53/10-11 FOR ASSESSMENT YEAR 2008-09. THE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 [IN SHORT THE AC T] BY THE DCIT CIRCLE I, TUTICORIN VIDE ORDER DATED 28.12.2010. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS IN THE APPEAL: I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.1060 1060 1060 1060/M/ /M/ /M/ /M/1 11 12 22 2 & && & C.O. C.O. C.O. C.O. NO. NO. NO. NO.125 125125 125/M/12 /M/12 /M/12 /M/12 2 1. THE ORDER OF THE CIT(A) IS OPPOSED TO LAW ON T HE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 2. THE CIT{A) ERRED IN ALLOWING THE DEPRECIATION A S CLAIMED BY THE ASSESSEE BY RELYING THE FOLLOWING DECISIONS: I) PUNJAB &HARYANA HIGH COURT'S DECISION IN THE CA SE OF CIT VS. MARKET COMMITTEE PIPLI(330 ITR 16) II) HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CI T VS. SOCIETY OF THE SISTER OF ST. ANNE (146 ITR 28) III) HON'BLE SUPREME COURT DECISION IN THE CASE OF CIT VS. MANAV MANGAL SOCIETY (328 ITR (ST) 9). 3. THE CIT(A) OUGHT TO HAVE SEEN THAT THE DECISION OF SUPREME COURT IN THE CASE OF CIT VS. MANAV MANGAL SOCIETY (328 IT R (ST) 9) IS NOT A SPEAKING ORDER AND THE PETITION WAS NOT DISPOSED ON MERITS. 4. THE CIT(A) ALSO OUGHT TO HAVE FOLLOWED THE DECI SION OF SUPREME COURT IN THE CASE OF SCIENTIFIC ADVISOR VS. DANIEL 1990 SCR (2) 440, 1990 SCC SUPL. 374, WHEREIN IT HELD THAT THE DISMIS SAL IN LIMINE OF THE SPECIAL LEAVE PETITION CANNOT PRECLUDE THE TRIBUNAL OR COURT FROM CONSIDERING THE ISSUE IN THE APPEALS ON MERITS. 5. THE CIT(A) OUGHT TO HAVE FOLLOWED THE DECISION O F THE HIGH COURT (MP) IN THE CASE OF PUNJAB STATE ELECTRICITY BOARD VS ASHOK KUMAR (AAR 1990 P& H 117, PARAGRAPHS 24 & 26(MP) WHEREIN IT HELD THAT WHERE SUPREME COURT REFUSED TO GRANT SPECIAL LEAVE TO APPEAL, IT CANNOT BE CONSTRUED AS A SEAL OF APPROVAL. 6. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE ADD UCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF TH E CIT(A) MAY BE REVERSED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 3. THE DR REPRESENTING REVENUE HAVE REITERATED THE ABOVE SAID PLEADINGS AND PRAYED FOR ACCEPTANCE OF THE APPEAL. ON THE OTHER HAND, IT HAS BEEN VEHEMENTLY ARGUED BY THE ASSESSEE THAT THE CIT(A) HAS RIGHTLY INTERFERED IN THE DISALLOWANCE MADE BY THE ASSESSIN G OFFICER PERTAINING TO THE DEPRECIATION IN QUESTION. IN ADDITION, HE HAS A LSO FILED SHORT PAPER BOOK I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.1060 1060 1060 1060/M/ /M/ /M/ /M/1 11 12 22 2 & && & C.O. C.O. C.O. C.O. NO. NO. NO. NO.125 125125 125/M/12 /M/12 /M/12 /M/12 3 TO SUPPORT THE CIT(A)S ORDER. 4. WE HAVE HEARD BOTH PARTIES AT LENGTH AND ALSO P ERUSED THE RELEVANT FINDINGS OF THE ASSESSING OFFICER AS WELL AS CIT(A) . ADMITTED FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PORT TRUST CREATED BY AN ACT OF THE PARLIAMENT. ON 28.09.2008, IT HAD E-FILED ITS RETU RN AND DECLARED INCOME OF ` .92,84,66,016/- WHICH WAS PROCESSED UNDER SECTION 1 43(1) OF THE ACT. IN SCRUTINY PROCEEDINGS, THE ASSESSING OFFICER ISSUE D NOTICE TO THE ASSESSEE UNDER SECTION 143(2) OF THE ACT ON 14.09.2009. IN THE MEANTIME, THE ASSESSEE SUCCEEDED IN GETTING REGISTRATION UNDER SE CTION 12AA OF THE ACT WITH RETROSPECTIVE EFFECT FROM CIT-I MADURAI VIDE O RDER DATED 30.03.2010. ACCORDINGLY, IT ALSO FILED ITS REVISED STATEMENT AD MITTING TOTAL INCOME OF ` .10,36,85,743/- IN VIEW OF SECTION 11 OF THE ACT ALONG WITH AUDITED REPORT UNDER SECTION 10B OF THE ACT. 5. AFTER PERUSING ASSESSEES REVISED STATEMENT OF INCOME, THE ASSESSING OFFICER NOTICED THAT DEPRECIATION OF ` .11,56,72,779/- HAD BEEN CLAIMED AS AN APPLICATION OF FUND UNDER SECTION 11(1). IN THE ASS ESSMENT ORDER DATED 28.12.2010, HE DECLINED THE CLAIM OF DEPRECIATION A ND HELD THAT THE SAME AMOUNTED TO DOUBLE DEDUCTION AS THE ENTIRE CAPITAL EXPENDITURE ON FIXED ASSET AS INCURRED BY THE ASSESSEE HAD BEEN CONSIDER ED AS AN APPLICATION OF INCOME. IN THIS MANNER, THE AMOUNT OF DEPRECIATION CLAIMED OF ` .11,56,72,779/- WAS ADDED IN ASSESSEES TOTAL INCOM E. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.1060 1060 1060 1060/M/ /M/ /M/ /M/1 11 12 22 2 & && & C.O. C.O. C.O. C.O. NO. NO. NO. NO.125 125125 125/M/12 /M/12 /M/12 /M/12 4 IN APPEAL PREFERRED BY THE ASSESSEE, THE CIT(A) HA S DIRECTED THE ASSESSING OFFICER TO VERIFY THE GENUINENESS OF THE CLAIM WITH REFERENCE TO RELEVANT RECORDS AND ALLOW THE SAME IF FOUND CORREC T. IT IS IN THIS BACKDROP OF FACT THAT THE REVENUE IS IN APPEAL BEFORE US. 6. AFTER HEARING BOTH PARTIES AND PERUSING THE REC ORDS OF THE CASE AS WELL AS PAPER BOOK FILED BY THE AR, IT IS EVIDENT THAT T HE SAME VERY CLAIM HAD ARISEN IN I.T.A. NO. 1055/MDS/2012 FOR THE ASSESSME NT YEAR 2003-04 PERTAINING TO THIS VERY ASSESSEE, THE COORDINATE BE NCH HAD HELD AS UNDER: 3. THE SOLE ISSUE INVOLVED IN THE ABOVE GROUNDS O F APPEALS TAKEN BY THE REVENUE IS THAT THE COMMISSIONER OF INCOME TAX (APP EALS) ERRED IN ALLOWING DEPRECIATION TO THE ASSESSEE TRUST RELYING ON THE D ECISION OF THE HONBLE PUNJAB &HARYANA HIGH COURT'S DECISION IN THE CASE OF CIT V S. MARKET COMMITTEE PIPLI (330 ITR 16), HON'BLE KARNATAKA HIGH COURT IN THE C ASE OF CIT VS SOCIETY OF THE SISTER OF ST. ANNE (146 ITR 28) AND HON'BLE SUP REME COURT DECISION IN THE CASE OF CIT VS. MANAV MANGAL SOCIETY(328 ITR (ST) 9 ). 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN T HE INSTANT CASE, THE ASSESSEE TRUST WAS GRANTED REGISTRATION UNDER SECTION 12AA O F THE ACT BY THE COMMISSIONER OF INCOME TAX VIDE ITS ORDER DATED 30. 03.2010 IN C.NO. 464/02/2007-08/CIT-I WITH EFFECT FROM 01.04.2002. T HE EFFECT OF THIS ORDER OF THE COMMISSIONER OF INCOME TAX WAS GIVEN TO THE ASS ESSEE BY THE DCIT CIRCLE I, TUTICORIN VIDE ITS ORDER DATED 31.03.2010. 5. THE ASSESSEE BEING AGGRIEVED BY THIS ORDER FILE D APPEALS FOR THE ALL THE ASSESSMENT YEARS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) AND CLAIMED THAT THE ASSESSING OFFICER WAS NOT JUSTIFIE D IN NOT ALLOWING DEPRECIATION WHILE COMPUTING INCOME FOR THE PURPOSE OF SECTION 11 OF THE ACT. THE COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED TH E APPEALS OF THE ASSESSEE AND DIRECTED THE ASSESSING OFFICER TO VERI FY THE GENUINENESS OF THE CLAIM OF DEPRECIATION AND ALLOW THE SAME IF FOUND C ORRECT. 6. AGAINST THIS ORDER OF THE COMMISSIONER OF INCOM E TAX (APPEALS), THE REVENUE IS IN APPEAL BEFORE US FOR ALL THE ASSESSME NT YEARS. 7. THE ONLY CONTENTION OF THE DR BEFORE US IS THAT THE APPEALS BEFORE THE I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.1060 1060 1060 1060/M/ /M/ /M/ /M/1 11 12 22 2 & && & C.O. C.O. C.O. C.O. NO. NO. NO. NO.125 125125 125/M/12 /M/12 /M/12 /M/12 5 COMMISSIONER OF INCOME TAX (APPEALS) WERE IN RELATI ON TO AN ORDER PASSED UNDER SECTION 154 OF THE ACT AND THEREFORE IN SUCH A PROCEEDING, THE ISSUE OF DEDUCTIBILITY OF DEPRECIATION IN CASE OF CHARITABLE INSTITUTION COULD NOT HAVE BEEN DECIDED AS THE ISSUE IS DEBATABLE. TO SHOW THA T THE ISSUE WAS DEBATABLE, SHE PLACED RELIANCE ON THE DECISION OF THE HONBLE KERALA HIGH COURT IN THE CASE OF LISSIE MEDICAL INSTITUTIONS, KOCHI VS. CIT [2012-TIOL-303-HC-KERALA- IT], WHEREIN IT WAS HELD THAT WHEN CAPITAL EXPENDIT URE IS ALLOWED AS DEDUCTION THEN DEPRECIATION ON THE SAME CAPITAL EXPENDITURE C ANNOT BE AGAIN ALLOWED. 8. ON THE OTHER HAND, THE AR OF THE ASSESSEE SUPPO RTED THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND SUBMITTED THAT THE DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V. MANAV MANGAL SOCIETY (2010) 328 ITR 421 (P&H) RELIED UPON BY THE COMMISSIONER OF INCOME TAX (APPEALS) HAS BEEN CONFIRMED BY THE HONBLE SUP REME COURT IN AS MUCH AS THE SLP AGAINST THE SAID DECISION WAS DISMISSED BY THE HONBLE SUPREME COURT BY PASSING A SPEAKING ORDER, WHICH IS REPORTE D AT 328 ITR (ST.) 9. 9. WE DO NOT FIND ANY FORCE IN THE APPEALS OF THE REVENUE. THE CONTENTION OF THE REVENUE THAT THE PROCEEDINGS IN THE INSTANT CASE ARE ARISING OUT OF AN ORDER PASSED UNDER SECTION 154 OF THE ACT AND ALLOW ABILITY OF DEPRECIATION BEING A DEBATABLE ISSUE, THE COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT JUSTIFIED IN DECIDING THE SAME ON MERITS THEN ON TH E VERY SAME ANALOGY IT HAS TO BE HELD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIE D IN DISALLOWING THE DEPRECIATION IN SUCH A PROCEEDINGS. BE THAT AS IT M AY. WE FIND THAT THE ISSUE OF ALLOWABILITY OF DEPRECIATION IN THE CASE OF CHARITA BLE INSTITUTION IS COVERED BY THE DECISION OF THE HONBLE MADRAS HIGH COURT IN TH E CASE OF CIT V. RAO BAHADUR CALAVALA CUNNAN CHETTY CHARITIES (1982) 135 ITR 485 IN FAVOUR OF THE ASSESSEE. THEREFORE, IT CANNOT BE HELD THAT THE ISSUE WAS STILL DEBATABLE AFTER THE DECISION OF THE HONBLE JURISDICTIONAL HI GH COURT. WE, THEREFORE, DO NOT FIND ANY ERROR IN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND THEREFORE ALL THE APPEALS OF THE REVENUE ARE DI SMISSED. 10. IN THE CROSS OBJECTIONS FILED BY THE ASSESSEE, THE ASSESSEE HAS MERELY SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME T AX (APPEALS) AND HAS TAKEN NO GROUNDS IN THE COS AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS). THEREFORE, THE COS FILED BY THE ASSE SSEE ARE DISMISSED AS INFRUCTUOUS. 12. IN THE RESULT, ALL THE APPEALS OF THE REVENUE AND CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. WE HAVE CONSIDERED THE ABOVE FINDINGS OF THE COORDI NATE BENCH AND ALSO PERUSED THE GROUNDS RAISED BY THE REVENUE IN B OTH CASES WHICH TURN OUT TO BE IDENTICAL. THEREFORE, WE ARE OF THE OPINI ON THAT THE CIT(A) HAS I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.1060 1060 1060 1060/M/ /M/ /M/ /M/1 11 12 22 2 & && & C.O. C.O. C.O. C.O. NO. NO. NO. NO.125 125125 125/M/12 /M/12 /M/12 /M/12 6 RIGHTLY ACCEPTED ASSESSEES CLAIM OF DEPRECIATION. THE SAME IS, THEREFORE CONFIRMED. CONSEQUENTLY, THE APPEAL STANDS DISMISSE D. C.O. NO.125/MDS/2012 7. SINCE THE CROSS OBJECTIONS FILED BY THE ASSESSE E ONLY SUPPORT THE ORDER OF THE CIT(A), WHICH WE HAVE CONFIRMED, THE O BJECTIONS ARE ALSO DISMISSED. 8. TO SUM UP, BOTH APPEAL FILED BY THE REVENUE AND CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON TUESDAY, THE 8 TH OF JANUARY, 2013 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) VICE-PRESIDENT (S.S. GODARA) JUDICIAL MEMBER CHENNAI, DATED, THE 08.01.2013 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.