ACIT (Exemption), New Delhi V. Hamdard Dawakhana (WAKF), New Delhi

ITA 1247/DEL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2889 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 07-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R M MEHTA
• Keywords: Capital asset; Depreciation; Charitable institution; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.1247/DEL/2016 ASSESSMENT YEAR : 2010-11 ACIT (EXEMPTION), CIRCLE-1(1), NEW DELHI. VS. HAMDARD DAWAKHANA (WAKF), 2A/3, HAMDARD BUILDING, ASAF ALI ROAD, NEW DELHI. PAN : AAATH0842H (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI ATIQ AHMAD, SR.DR ASSESSEE BY : SHRI R. M. MEHTA, CA DATE OF HEARING : 27-12-2017 DATE OF PRONOUNCEMENT : 27-12-2017 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 18.12.2015 OF THE CIT(A)-40, NEW DELHI RELATING TO ASSESSMENT YEAR 2010-11. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE READS AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING DEPRECIATION BY IGNORING THE FACT THAT WHERE THE CAPITAL EXPENDITURE HAS BEEN TREATED TO HAVE BEEN APPLIED F OR THE OBJECT OF THE TRUST, ALLOWANCE OF DEDUCTION ON ACCOUNT OF DEPRECIATION W ILL AMOUNT TO DOUBLE DEDUCTION IN VIEW OF THE RECENT DECISION OF HONBLE DELHI HIGH C OURT IN THE CASE OF DIT (E) VS. CHARANJIV CHARITABLE TRUST DATED 18.03.2014. 2 ITA NO.1247/DEL/2016 3. AFTER HEARING BOTH THE SIDES, WE FIND THE ISSUE TO BE DECIDED IN THE GROUNDS OF APPEAL IS REGARDING THE ALLOWANCE OF DEP RECIATION ON ASSETS PURCHASED DURING THE EARLIER YEARS WHICH HAVE BEEN CLAIMED AS APPLICATION OF INCOME IN EARLIER YEARS. THE ASSESSING OFFICER DID NOT ALLOW DEPRECIATION ON ASSETS PURCHASED DURING THE EARLIER YEARS ON THE GR OUND THAT THOSE ASSETS HAVE BEEN CLAIMED AS APPLICATION OF INCOME IN EARLIER YE ARS AND ALLOWING DEPRECIATION ON THE SAME WILL AMOUNT TO DOUBLE BENEFIT. 4. IN APPEAL, THE LD. CIT(A) RELYING ON VARIOUS DEC ISIONS HELD THAT THE ASSESSEE IS ENTITLED TO CLAIM DEPRECIATION ON ASSET S AS WELL AS APPLICATION OF INCOME OF THE SAME. IT IS THE GRIEVANCE OF THE REV ENUE THAT THE ORDER OF THE LD. CIT(A) IS NOT CORRECT IN VIEW OF THE DECISION OF TH E HONBLE DELHI HIGH COURT IN THE CASE OF DIT (E) VS. CHARANJIV CHARITABLE TRUST ORDER DATED 18.03.2014. WE FIND THE HON'BLE SUPREME COURT IN THE CASE OF CIT V S. RAJASTHAN & GUJARATI CHARITABLE FOUNDATION POONA VIDE ORDER DATED 22.12. 2017 HAS HELD THAT EVEN IF THE ENTIRE EXPENDITURE INCURRED FOR ACQUISITION OF A CAPITAL ASSET IS TREATED AS APPLICATION OF INCOME FOR CHARITABLE PURPOSES U/S 1 1(1)(A) OF THE ACT, THE ASSESSEE IS ALSO ENTITLED TO DEPRECIATION U/S 32. T HE ARGUMENT OF THE REVENUE THAT THE GRANT OF DEPRECIATION AMOUNTS TO GIVING DO UBLE BENEFIT TO THE ASSESSEE IS NOT ACCEPTABLE. SECTION 11(6) WHICH BARS DEPRECIAT ION ON EXPENDITURE APPLIED FOR CHARITABLE PURPOSES IS PROSPECTIVE AND APPLIES ONLY FROM ASSESSMENT YEAR 2015-16. SINCE THE IMPUGNED ASSESSMENT YEAR IS 201 0-11, THEREFORE, IN VIEW OF 3 ITA NO.1247/DEL/2016 THE DECISION OF THE HONBLE SUPREME COURT CITED (SU PRA), WE FIND THE NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) ALLOWING D EPRECIATION ON ASSETS PURCHASED DURING THE EARLIER YEARS WHICH HAVE BEEN CLAIMED AS APPLICATION OF INCOME. THE GROUNDS RAISED BY THE REVENUE ARE ACCO RDINGLY DISMISSED. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME HEA RING ITSELF I.E. ON THIS 27 TH DAY OF DECEMBER, 2017. SD/- SD/- (SUCHITRA KAMBLE) (R. K. P ANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27-12-2017. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI