Appeal details
Counselvise Citation
[2016] 112 COUNSELVISE.COM (IT) 4200 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 2 month(s) 5 day(s)
Appellant
Respondent
Appeal Type
Cross Objection
Pronouncement Date
20-09-2016
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
C
Next Hearing Date
20-09-2016
Assessment Year
2005-2006
Appeal Filed On
15-07-2014
Judgement Text
, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NOS. 600 & 601/AHD/2014 / ASSESSMENT YEAR : 2005-06 & 2010-11 RESPECTIVELY ACIT, CIRCLE-2 SURAT VS THE UDHNA ACADEMY EDUCATION TRUST, CENTRAL ROAD NO.14, UDHNA UDYOG NAGAR, SURAT PAN : AAATU 0431 F / (APPELLANT) / (RESPONDENT) CO NO.155/AHD/2014 (IN ITA NO.600/AHD/2014) / ASSESSMENT YEAR : 2005-06 THE UDHNA ACADEMY EDUCATION TRUST, SURAT PAN : AAATU 0431 F VS ACIT, CIRCLE-2 SURAT CROSS-OBJECTOR ORIGINAL APPELLANT REVENUE BY : SHRI PRASOON KABRA, SR DR ASSESSEE BY : SHRI M.K. PATEL, AR / DATE OF HEARING : 20/09/2016 / DATE OF PRONOUNCEMENT: 20/09/2016 / O R D E R PER R.P. TOLANI, JUDICIAL MEMBER:- THESE TWO APPEALS BY THE REVENUE ARE DIRECTED AGAIN ST THE ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, SURAT DATED 20.12.2013 AND 19.12.2013 FOR AYS 2005-06 AND 2010-11 RESPECTIVELY . THE CROSS-OBJECTION FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-II, SURAT DATED 20.12.2013 FOR AY 2005-06. 2. BEFORE US, AT THE OUTSET, LD. COUNSEL FOR THE AS SESSEE SUBMITTED THAT HE IS NOT PRESSING THE CROSS-OBJECTION; HENCE THE CROS S-OBJECTION FILED BY THE ASSESSEE IS DISMISSED AS NOT PRESSED. ITA NO. 600&601 AND CO NO.155/AHD/2014 ACIT VS. UDHNA ACADEMY EDN TRUST AY : 2005-06 & 2010-11 2 3. THE COMMON ISSUE RAISED IN BOTH THE REVENUES AP PEALS IS AS UNDER:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHE R THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING THE CLAIM OF DEPRECIATION OF RS.39,67,198/- FOR AY 2005- 06 AND RS.48,76,882 FOR AY 2010-11 ON ASSETS ACQUIRE D BY THE TRUST FROM APPLICATION OF INCOME, WHICH WAS ALREADY EXEMPTED A ND CONSEQUENTLY GIVING DOUBLE BENEFIT OF DEDUCTION TO THE TRUST. 4. LD. DEPARTMENTAL REPRESENTATIVE IS HEARD. 5. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ISSUE IN QUESTION IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISIO N OF TRIBUNAL IN THE CASE OF ACIT VS. INSTITUTE OF PLASMA RESEARCH IN ITA NO.150 6/AHD/2009 DATED 21.02.2011, HOLDING AS UNDER:- 5.1 IN THE CONTEXT OF ISSUE BEFORE US, HON'BLE JUR ISDICTIONAL HIGH COURT IN CIT V. SHETH MANILAL RAN CHHODDAS VISHRAM BHAVAN TR UST, 198 ITR 598(GUJ) HELD AS UNDER: WHETHER DEPRECIATION HAS TO BE ALLOWED AS A NECESSA RY DEDUCTION FOR COMPUTING THE INCOME OF A CHARITABLE INSTITUTION WA S THE QUESTION WHICH CAME UP BEFORE THE KARNATAKA HIGH COURT IN CI T V. SOCIETY OF THE SISTERS OF ST. ANNIE (1984] 146 ITR 28. NOTICING THE DIFFERENCE BETWEEN THE WORD ' INCOME ' AND THE EXPRESSION ' TO TAL INCOME ' AND THE NECESSITY FOR PROVIDING DEPRECIATION IN ORDER T O MAINTAIN CORRECT ACCOUNTS, THE HIGH COURT HELD THAT THE AMOUNT OF DE PRECIATION DEBITED TO THE ACCOUNTS OF THE CHARITABLE INSTITUTION HAS T O BE DEDUCTED TO ARRIVE AT THE INCOME AVAILABLE FOR APPLICATION TO C HARITABLE AND RELIGIOUS PURPOSES. SAME VIEW HAS BEEN TAKEN BY THE MADHYA PRADESH HIGH COURT IN CIT V. RAIPUR PALLOTTINE SOCIETY [198 9] 180 ITR 579. IN CIT .V RAO BAHADUR CALAVALA CUNNAN CHETTY CHARIT IES [1982] 135 ITR 485, THE MADRAS HIGH COURT WAS REQUIRED TO CONS IDER WHETHER, FOR THE PURPOSE OF COMPUTING ACCUMULATION IN EXCESS OF 25 PER CENT AS LAID DOWN IN SECTION 11(1)(A) OF THE ACT, ' INCOME ' HAS TO BE COMPUTED UNDER THE VARIOUS HEADS ENUMERATED IN THE INCOME-TAX ACT. IT HELD THAT THE INCOME FROM THE PROPERTIES HELD UN DER TRUST WOULD HAVE TO BE ARRIVED AT IN THE NORMAL COMMERCIAL MANN ER WITHOUT ITA NO. 600&601 AND CO NO.155/AHD/2014 ACIT VS. UDHNA ACADEMY EDN TRUST AY : 2005-06 & 2010-11 3 CLASSIFICATION UNDER THE VARIOUS HEADS SET OUT IN S ECTION 14. IT HELD THAT THE EXPRESSION ' INCOME HAS TO BE UNDERSTOOD I N THE POPULAR OR GENERAL SENSE AND NOT IN THE SENSE IN WHICH THE INC OME IS ARRIVED AT FOR THE PURPOSE OF ASSESSMENT TO TAX BY APPLICATION OF SOME ARTIFICIAL PROVISIONS EITHER GIVING OR DENYING DEDUCTION. IT O BSERVED THAT THE COMPUTATION UNDER THE DIFFERENT CATEGORIES OR HEADS ARISES ONLY FOR THE PURPOSES OF ASCERTAINING THE TOTAL INCOME FOR THE P URPOSES OF CHARGE. THOSE PROVISIONS CANNOT BE INTRODUCED TO FIND OUT W HAT THE INCOME DERIVED FROM THE PROPERTY HELD UNDER TRUST TO BE EX CLUDED FROM THE TOTAL INCOME IS, FOR THE PURPOSE OF THE EXEMPTIONS UNDER CHAPTER III. WE ARE IN RESPECTFUL AGREEMENT WITH THE VIEW TAKEN BY THE KARNATAKA, MADHYA PRADESH AND MADRAS HIGH COURTS. WE, THEREFOR E, ANSWER BOTH THE QUESTIONS REFERRED TO US IN THE AFFIRMATIV E AND AGAINST THE REVENUE. NO ORDER AS TO COSTS 5.2 SIMILAR VIEW HAS BEEN TAKEN BY HON'BLE PUNJAB A ND HARYANA HIGH COURT IN CIT VS. MARKET COMMITTEE, PIPLI [2010] 45 D TR (P&H) 381 WHEN IT WAS HELD THAT DEPRECIATION IS ALLOWABLE ON CAPIT AL ASSETS FROM THE INCOME OF CHARITABLE TRUST FOR DETERMINING THE QUANTUM OF FUN D WHICH HAVE TO BE APPLIED FOR THE PURPOSES OF THE TRUST IN TERMS OF S ECTION 11. 5.3 IN THE LIGHT OF VIEW TAKEN IN THE AFORECITED DE CISIONS, ESPECIALLY WHEN THE REVENUE HAVE NOT PLACED BEFORE US EITHER ANY CONTRA RY DECISION NOR ANY OTHER MATERIAL SO AS TO ENABLE US TO TAKE A DIFFERENT VIE W IN THE MATTER, WE ARE NOT INCLINED TO INTERFERE. THEREFORE, GROUND NO.1 IN TH E APPEAL IS DISMISSED. 5.1. IT IS FURTHER CONTENDED THAT THIS POSITION HAS BEEN ACCEPTED BY LEGISLATURE AND WITH EFFECT FROM 01.04.2015 BY AMEN DMENT U/S 11(6) BY FINANCE ACT, 2015, THE DOUBLE CLAIM OF DEPRECIATION HAS BEEN BARRED WITH EFFECT FROM 01.04.2015. THUS, UP TO 31.03.2014, TH E ASSETS OF THE TRUST, ACQUIRED BY APPLICATION OF INCOME, ARE ELIGIBLE FOR CLAIM OF DEPRECIATION. \ 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIAL PLACED BEFORE US AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. RESPECTFULLY FOLLOWING THE ITAT JUDGMENT IN THE CASE OF INSTITUT E OF PLASMA RESEARCH (SUPRA), RELYING ON JUDGMENT OF HONBLE JURISDICTIO NAL HIGH COURT IN THE ITA NO. 600&601 AND CO NO.155/AHD/2014 ACIT VS. UDHNA ACADEMY EDN TRUST AY : 2005-06 & 2010-11 4 CASE OF SHETH MANILAL RAN CHHODDAS VISHRAM BHAVAN T RUST (SUPRA) AND THE AMENDMENT U/S 11(6) BY FINANCE ACT, 2015 WITH EFFEC T FROM 01.04.2015, WE UPHOLD THE ORDER OF LD. CIT(A). THUS, BOTH THE REV ENUES APPEALS ARE DISMISSED. 7. IN THE RESULT, REVENUES APPEALS AND ASSESSEES CROSS-OBJECTION ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 20 TH SEPTEMBER, 2016 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER R.P. TOLANI (JUDICIAL MEMBER) AHMEDABAD; DATED 20/09/2016 *BIJU T. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD
