DCIT(E), New Delhi V. Construction Industry Development Council, New Delhi

ITA 125/DEL/2016

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4116 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 08-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR MAHAR
• Keywords: Depreciation; Non-deduction of tax
• Section: 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI R.S.SYAL, HONBLE VICE PRESIDENT AND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO.125/DEL./2016 (ASSESSMENT YEAR : 2011-12) DCIT(E), CONSTRUCTION INDUSTRY DEVELOPMENT CIRCLE -1 (1), VS. COUNCIL E-2BLOCK, PRATYAKSH 801, 8 TH FLOOR, HEMKUNT CHAMBER-89 KAR BHAWAN NEHRU PLACE DR. SHAYAMA PRASAD MUKHARJEE CIVIC CENTRE NEW DELHI NEW DELHI (PAN : AAATC4750F) (APPELLANT) (RESPONDENT) ASSESSEE BY : MS. SWEETY KOTHARI, C.A. REVENUE BY : SH. MANOJ KUMAR MAHAR, SR.DR DATE OF HEARING : 11.10.2018 DATE OF ORDER : 11.10.2018 O R D E R PER LALIET KUMAR, JUDICIAL MEMBER : 1. THE PRESENT APPEAL IS BEING FILED BY THE REVENU E CHALLENGED THE ASSESSEE ON THE FOLLOWING GROUNDS :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING EXEMPT ION U/S 11 & 12 OF THE I.T.ACT BY IGNORING THE FACT THAT TH E ACTIVITIES OF THE ASSESSEE ARE HIT BY PROVISO TO SE CTION 2(15) OF THE I.T.ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING DEPRECIAT ION BY ITA NO.125/DEL./2016 2 IGNORING THE FACT THAT WHERE THE CAPITAL EXPENDITUR E HAS BEEN TREATED TO HAVE BEEN APPLIED FOR THE OBJECT OF THE TRUST, ALLOWANCE OF DEDUCTION ON ACCOUNT OF DE;RECI TATION WILL AMOUNT TO DOUBLE DEDUCTION. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING RS. 1,74, 22,488/- U/S 40(A)(IA) OF THE ACT BY IGNORING THE FACT THAT ASSESSEE HAS INTENTIONALLY VIOLATED PROVISIONS OF CHAPTER XV II-B OF THE ACT. 2. THE LD. AR HAS DRAWN OUR ATTENTION TO THE ORDER PASSED BY THE TRIBUNAL FOR THE ASSESSMENT YEAR 2010-11, 2013-14 A ND 2014-15 IN ITA NO. 916, 238 AND 239/DEL/2018 WHEREIN THE TRIBU NAL IN PARAGRAPH 7, 8 AND 9 HAS HELD AS UNDER :- 7. WE HAVE HEARD THE ARGUMENTS ON EITHER SIDE AND GONE THROUGH THE RECORD IN THE LIGHT OF THE SUBMISSIONS. ON A CAREFUL PERUSAL OF THE ORDER DATED 30/06/2017 AND T HE PAPERS IN THESE APPEALS, WE FIND THAT THE FACTS AND GROUNDS OF APPEALS INVOLVED IN THESE APPEALS ARE SUBSTANTIA LLY THE SAME AS IN ITA NUMBER 2130/DEL/2012 FOR THE ASSESSM ENT YEAR 2008-09. IN THE SAID APPEAL A COORDINATE BENCH OF THIS TRIBUNAL FOUND THAT THE ACTIVITIES OF ORGANISING CO NFERENCE AND SEMINARS OF VARIOUS ORNAMENT AND NON-GOVERNMENT AGENCIES ARE NOT WITH THE AIM OF EARNING ANY PROFIT . IT WAS FURTHER HELD THAT INSOFAR AS THE APPLICATION OF INC OME FROM CONFERENCE AND SEMINARS TOWARDS THE OBJECTIVE OF TH E ASSESSEE SOCIETY IS NOT IN DISPUTE, WITHDRAWAL OF T HE EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT IS NOT JUSTIFIED. THE TRIBUNAL FURTHER HELD THAT THE PROVISIONS OF SE CTION ITA NO.125/DEL./2016 3 40(A)(IA) OF THE ACT ARE CONTAINED IN CHAPTER IV-D OF THE ACT DEALING WITH THE 'PROFIT AND GAINS OF BUSINESS AND PROFESSION' AND BECOME OPERATIONAL ONLY WHEN INCOME IS ASSESSABLE UNDER THAT HEAD AND SINCE THE INCOME IS EARNED BY THE ASSESSEE HAS BEEN HELD AS EXEMPT UNDER SECTI ON 11 AND 12 OF THE ACT, THE RIGOURS OF PROVISIONS OF SEC TION 40(A)(IA) OF THE ACT CANNOT BE APPLIED TO THE FACTS OF THE ASSESSEE. THE TRIBUNAL, THEREFORE, DELETED THE ADDI TION MADE UNDER SECTION 40(A)(IA) OF THE ACT. 8. LD. DR ARGUED THAT NON-DEDUCTION OF TAX IN RESPE CT OF PROVISION OF PAYMENT TO CIVTC ATTRACTS THE PROVISIO NS UNDER ITA NOS 916. 238 AND 239/DEL/2018 SECTION 40( A) (IA) OF THE ACT. HE PLACED RELIANCE ON THE DECISIONS REP ORTED IN PALAM GAS SERVICE VS. CIT, CIVIL APPEAL NO . 5512 OF 2017 (SUPREME COURT) AND PCIT VERSES MANZOOR AHMED WALVIR 84 TAXMANN.COM 233 (J AND K) AND ACADEMY OF MEDICAL SERVICES VERSES CIT 91 TAXMANN.COM 239 (KER ELA). 9. HOWEVER, ADMITTEDLY THERE IS NO CHANGE IN THE FA CTS AND CIRCUMSTANCES THROUGH THE ASSESSMENT YEARS 2008-09, 2010- 11, 2013- 14 AND 2014-15. IN THESE CIRCUMSTANCES TH ERE IS NO MATERIAL BEFORE US TO DEVIATE FROM THE VIEW TAKE N BY A COORDINATE BENCH OF THIS TRIBUNAL FOR THE ASSESSMEN T YEAR 2008-09 OR TO REACH A DIFFERENT CONCLUSION. WE, THE REFORE, WHILE RESPECTFULLY FOLLOWING THE SAME FIND THAT THE IMPUGNED ORDERS DO NOT SUFFER ANY ILLEGALITY AND IRREGULARIT Y AND DO NOT WARRANT ANY INTERFERENCE BY THIS TRIBUNAL. WE, ACCORDINGLY, DISMISS THESE APPEALS. ITA NO.125/DEL./2016 4 3. LD. DR HAS NOT DISPUTED THE DECISION OF TRIBUNAL AND HAS FURTHER SUBMITTED THAT THE SAID DECISION ONLY APPLICABLE TO THE GROUND NO. 1 AND 3 RAISED BY THE REVENUE AND NOT APPLICABLE TO GROUN D NO. 2. 4. ON THE OTHER HAND, LD. AR HAS DRAWN OUR ATTENTIO N TO PARAGRAPH 4.1 OF THE CIT ORDER WHEREIN THE LD. CIT HAS DISMIS SED THE GROUND RAISED BY THE ASSESSEE ON THE PRETEXT THAT THE SAME BECOME INFRUCTUOUS, IN VIEW OF THE FINDING RECORDED BY THE LD. CIT WITH RESPECT TO GROUND NO. 1 AND 3. THE SIMILAR ARGUMENTS WERE RAISED BY T HE ASSESSEE BEFORE US WHEREBY THE LD. AR RELIED UPON THE DECISION OF T HE TRIBUNAL MENTIONED HEREINABOVE AND HAS SUBMITTED THAT THE AD JUDICATION OF GROUND NO. 2 HAD, BECAME ACADEMIC AND IN CONSEQUENT IAL, ONCE IT IS HELD THAT THE INCOME EARNED BY THE ASSESSEE IS AN E XEMPT INCOME IN VIEW OF APPLICABILITY OF THE PROVISIONS OF SECTION 11 AND 12 OF THE ACT. 5. WE HAVE HEARD THE RIVAL CONTENTION AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. THE TRIBUNAL IN ITS ORDER DATE D 05.07.2018 (SUPRA) CASE OF THE ASSESSEE HAS ALREADY DECIDED THE GROUND NO. 1 AND 3 TO WHICH THERE IS NO CAVIL. HENCE, THE APPEAL OF THE R EVENUE IS REQUIRED TO BE DISMISSED WITH RESPECT TO GROUND NO. 1 AND 3. 6. NOW, COMING TO THE GROUND NO. 2 OF THE REVENUE. IN THIS REGARD, WE MAY LIKE TO KNOW RECORD THAT AS PER SECTION 11(6 ) OF THE ACT WHICH IS APPLICABLE TO THE YEAR UNDER CONSIDERATION, THE AS SESSEE IS ENTITLED TO THE DEPRECIATION IN ACCORDANCE WITH LAW. 7. FOR THE READY REFERENCE, WE ARE REPRODUCING HERE INBELOW SECTION 11(6) OF THE ACT TO THE FOLLOWING EFFECT. 6. IN THIS SECTION WHERE ANY INCOME IS REQUIRED TO BE APPLIED OR ACCUMULATED OR SET APART FOR APPLICATION , THEN, FOR ITA NO.125/DEL./2016 5 SUCH PURPOSES THE INCOME SHALL BE DETERMINED WITHOU T ANY DEDUCTION OR ALLOWANCE BY WAY OF DEPRECIATION OR OT HERWISE IN RESPECT OF ANY ASSET, ACQUISITION OF WHICH HAS B EEN CLAIMED AS AN APPLICATION OF INCOME UNDER THIS SECTION IN T HE SAME OR ANY OTHER PREVIOUS YEAR. 8. AS IS CLEAR FROM THE BARE READING OF THE PROVISION, THE ASSESSEE IS ENTITLED TO DEDUCTION ON ACCOUNT OF DEPRECIATION AN D THEREFORE, THE APPEAL OF THE REVENUE IS NOT MAINTAINABLE ON THIS G ROUND ALSO AND HENCE, THE APPEAL OF THE REVENUE IS DISMISSED ON ALL THE G ROUNDS. 9. IN THE FINAL RESULT, APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN OPEN COURT ON 11 TH OCTOBER, 2018. SD/- SD/- (R.S.SYAL) (L ALIET KUMAR) VICE PRESIDENT JUDICIAL MEMBER DATED 11/10/ 2018 BR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXVI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI. ITA NO.125/DEL./2016 6 DATE OF DICTATION 11.10.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 11 .10.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 11.10.2018 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS 11.10.2018 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 11.10.2018 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 12.10.2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 12.10.2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 12. 10.2018 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER