COMMISSIONER OF INCOME TAX V. MS SAI ENGINEERING FOUNDATION

ITA/19/2009

AI Insights

The case involves multiple appeals by the Commissioner of Income Tax, Shimla against M/s Sai Engineering Foundation Ltd., concerning the deductions claimed by the respondent under the Income Tax Act. The appeals were consolidated and decided based on a prior ITAT order dated 29.08.2008, which had accepted the respondent's claims for deductions related to charitable activities and statutory exemptions. The High Court of Himachal Pradesh directed the Assessing Officer to verify and implement the ITAT's decision within three months.

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 718810 (HC-HIMACHAL_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 27-10-2015
• Assessment Year: misc
• Other Referred Cases: CIT v S.R.M., CT.M. Thirruppani Trust v CIT reported in 230 ITR 636
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: VISHAL MOHAN; ADITYA SOOD; SUSHANT KEPERATE
• Assessee Lawyers: VINAY KUTHIALA; AASHIMA SHARMA
• Keywords: Assessment; Charitable Activities; Deductions; Income Tax
• Section: 11(1)(a)

Judgement Text

"IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA ITA No. 16 of 2009 a/w ITAs No. 19 to 22 of 2009 Decided on: 27.10.2015 Commissioner of Income Tax, Shimla …Appellant(s). Versus M/s Sai Engineering Foundation Ltd. …Respondent(s). Coram The Hon’ble Mr. Justice Mansoor Ahmad Mir, Chief Justice. The Hon'ble Mr. Justice Tarlok Singh Chauhan, Judge. Whether approved for reporting? For the appellant(s): Mr. Vinay Kuthiala, Senior Advocate, with Ms. Aashima Sharma, Advocate. For the respondent(s): Mr. Vishal Mohan, Advocate, with Mr. Aditya Sood & Mr. Sushant Keperate, Advocates. Mansoor Ahmad Mir, Chief Justice (Oral) Learned counsel for the appellant(s) stated at the Bar that all these appeals be disposed of in terms of para 17 of the order, dated 29.08.2008, made by the Income Tax Appellate Tribunal Chandigarh Bench (for short \"ITAT\") in ­: 2 :­ ITA No. 654/Chandi/2004, titled as M/s Sai Engineering Foundation New Shimla versus D.C.I.T. Circle Shimla, which is subject matter of ITA No. 20 of 2009. Learned counsel for the respondent(s) also stated at the Bar that he has no objection for the same. Their statements are taken on record. 2. It is apt to reproduce para 17 of the order made by the ITAT (supra) herein: \"17. After careful consideration of the facts and the statutory provisions of law we find that the claim of the assessee is tenable and, therefore acceptable. So far as the first claim of regarding 25% deduction of general exemption is concerned, the same being a statutory deduction has to be allowed to the assessee. Further, Rs. 7,60,815/­ again cannot be disputed as the same has been incurred for various objects of the assessee society which are charitable objects and therefore the same is an application of income under section 11(1)(a) of the Act. The last item is in respect of Rs. 22,63,671/­ which sum again has been incurred for charitable purposes as the sum represents purchase of fixed assets for the business activities which is incidental to the charitable activities of the assessee society and is thus an application of income under section 11(1)(a) of the Act, as has been held by the Apex Court in the case of CIT v S.R.M., CT.M. Thirruppani Trust v CIT reported in 230 ITR 636. However, ­: 3 :­ such claim was not before the lower authorities and has been raised before us by way of the Additional Ground of appeal. While we uphold the claim in principle, it is deemed expedient that the factual aspect of the claim be verified by the Assessing Officer. The Assessing Officer shall verify the assessee's claim for purchase of fixed assets amounting to Rs. 22,63,671/­ and thereafter allow the relief as decided above. In the result, the Assessing Officer is directed to recompute the income of the assessee society by allowing all the three deductions from the total income of Rs. 55,90,465/­.\" 3. In the given circumstances, we deem it proper to dispose of all the appeals with a direction to the Assessment Officer to do the needful in terms of the order (supra) within three months. 4. Accordingly, all the appeals are disposed of alongwith the pending applications. (Mansoor Ahmad Mir) Chief Justice (Tarlok Singh Chauhan) Judge October 27, 2015 ( rajni ) "