ADIT (E) I(2), MUMBAI V. SAYAJI U BA KHIN MEMORIAL TRUST, MUMBAI

ITA 138/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75818 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2008-2009
• Appeal Filed On: 04-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHOK SURI
• Assessee Lawyers: RAJNIKANT CHANIYARI
• Keywords: Depreciation; Charitable institution

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI . . , . . , BEFORE SHRI H. L. KARWA, PRESIDENT AND SHRI N. K. BILLAIYA, A.M. ./ I.T.A. NO. 138/MUM/2013 ( / ASSESSMENT YEAR: 2008-09) DY. DIT(E)-I(2), ROOM NO.504, PIRAMAL CHAMBERS, 5 TH FLOOR, PAREL, MUMBAI-400 012 / VS. SAYAJI U-BA KHIN MEMORIAL TRUST GREEN HOUSE, 2 ND FLOOR, GREEN STREET, FORT, MUMBAI-400 023 ' ./#$ ./PAN/GIR NO. AAATT 0114 E ( '% /APPELLANT ) : ( &''% / RESPONDENT ) '% ( ) / APPELLANT BY : SHRI ASHOK SURI &''% ( ) / RESPONDENT BY : SHRI RAJNIKANT CHANIYARI * + ( ,- / DATE OF HEARING : 20.03.2014 ./01 ( ,- / DATE OF PRONOUNCEMENT : 20.03.2014 2 / O R D E R PER N. K. BILLAIYA, A. M.: THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A)-1, MUMBAI DATED 15.10.2012 PERTAINING TO THE ASSESSMEN T YEAR (A.Y.) 2008-09. THE REVENUE HAS RAISED FOLLOWING SUBSTANTIVE GROUNDS OF APPEAL: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DIRECTING THE AO TO ALLOW THE CLAIM OF DEP RECIATION AMOUNTING TO RS.75,08,077/-, RELYING ON THE DECISION OF THE HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. INSTITUTE OF BANKING PERSONNEL SERV ICES REPORTED IN 264 ITR 110 (BOM) IGNORING THE RATIO OF JUDGEMENT OF HONBLE SU PREME COURT IN THE CASE OF 2 ITA NO.138/MUM/2013 (A.Y. 2008-09) DY. DIT(E) VS. SAYAJI U-BA KHIN MEMORIAL TRUST ESCORTS LTD. VS. UNION OF INDIA (199 ITR 43) WHEREI N HONBLE SUPREME COURT HAS HELD THAT DOUBLE DEDUCTION CANNOT BE PRESUMED IF TH E SAME IS NOT SPECIFICALLY PROVIDED BY LAW, IN ADDITION TO NORMAL DEDUCTION. 2. THAT WITHOUT PREJUDICE TO GROUND NO. 1 ABOVE, TH E LD. CIT(A) OUGHT TO HAVE HELD THAT, DEDUCTION OF DEPRECIATION U/S.32 WHICH F ALLS UNDER THE HEAD PROFIT AND GAINS FROM BUSINESS AND PROFESSION OF THE INCOME T AX ACT, 1961 WOULD NOT BE AVAILABLE TO A CHARITABLE TRUST WHOSE INCOME IS OTH ERWISE NOT ASSESSABLE UNDER THE ABOVE HEAD. 3. THAT WITHOUT PREJUDICE TO GROUND NO. 1 AND 2 ABO VE, THE LD. CIT(A) OUGHT TO HAVE REJECTED THE CLAIM OF DEPRECIATION, SINCE T HE VALUE OF THE ASSET, THE COST OF WHICH HAS ALREADY BEEN ALLOWED AS A DEDUCTION ON AC COUNT OF APPLICATION OF INCOME, WOULD BE TREATED AS NIL FOR THE PURPOSE OF DEPRECIATION. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) ERRED IN DIRECTING THE AO TO ALLOW THE DEFIC IT OF RS.2,28,16,650/- (ON ACCOUNT OF EXCESS OF EXPENDITURE OVER INCOME) TO BE CARRIED FORWARD WITHOUT APPRECIATING THE FACT THAT THIS WOULD HAVE THE EFFE CT OF GRANTING DOUBLE BENEFIT TO THE ASSESSEE, FIRST AS ACCUMULATION OF INCOME U/S .11(1)(A) OR AS CORPUS DONATION U/S.11(1)(D) IN THE EARLIER YEAR OR CURRENT YEAR AN D THEN AS APPLICATION OF INCOME U/S.11(1)(A) IN THE CURRENT OR SUBSEQUENT YEAR WHIC H WAS LEGALLY NOT PERMISSIBLE. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE FOR CARRY FORWARD OF THE SAID DEFICIT, IGNORING THE FACT THAT THERE WAS NO EXPRES S PROVISION IN THE I. T. ACT, 1961 PERMITTING ALLOWANCE OF SUCH CLAIM. 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING THE ACCUMULATION OR SETTIN G APART OF 15% OF INCOME, AS THE ASSESSEE HAS EXPENDED THE ENTIRE INCOME TOWARDS OBJECT OF THE TRUST AS APPLICATION OF INCOME AND THERE IS NO SURPLUS LEFT TO BE ACCUMULATED. 2. AT THE VERY OUTSET THE LD. COUNSEL FOR THE ASSES SEE STATED THAT THE ISSUES INVOLVED UNDER CONSIDERATION ARE COVERED IN FAVOUR OF THE AS SESSEE BY THE DECISION OF THE TRIBUNAL IN THE ASSESSEES OWN CASE VIDE ITA NO. 5646/MUM/20 11 AND CO NO.153/MUM/2011. THE LD. DR COULD NOT BRING ANY DISTINGUISHING FACT/ DECISION IN FAVOUR OF THE REVENUE. 3. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE LOWE R AUTHORITIES AND THE DECISION OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR A.Y. 20 07-08. WE FIND THAT GROUND NOS. 1, 2 3 ITA NO.138/MUM/2013 (A.Y. 2008-09) DY. DIT(E) VS. SAYAJI U-BA KHIN MEMORIAL TRUST AND 3 ARE IDENTICAL TO GROUND NO. 1 IN APPEAL FOR A .Y. 2007-08. WE FIND THAT THE TRIBUNAL AT PARA 4 ON PG. 3 OF ITS ORDER HAS FOLLOWED THE DE CISION OF THE CO-ORDINATE BENCH IN THE ASSESSEES OWN CASE FOR A.Y. 2004-05 AND ALSO THE D ECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. INSTITUTE OF BANKING PERSONNEL SELECTION [2003] 264 ITR 110 (BOM) AND ALLOWED THE CLAIM OF DEPRECIATION . WE FIND THAT THE LD. CIT(A) HAS ALSO FOLLOWED THE DECISION OF THE HONBLE JURISDICT IONAL HIGH COURT . AS THE ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL IN THE ASSE SSEES OWN CASE , RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL WE UPHOLD THE ORDER OF TH E LD. CIT(A). GROUND NOS. 1 TO 3 ARE ACCORDINGLY DISMISSED. 3. THE ISSUES RAISED VIDE GROUND NOS. 4 & 5 ARE IDE NTICAL TO THE ISSUE RAISED VIDE GROUND NO. 3 IN ITA NO. 5646/MUM/2011. THE DECISION OF THE TRIBUNAL IS AT PARA 9 ON PG. 4 OF ITS ORDER. RESPECTFULLY FOLLOWING THE FINDINGS OF THE TRIBUNAL IN THE ASSESSEES OWN CASE (SUPRA), GROUND NOS. 4 & 5 ARE ACCORDINGLY DIS MISSED. 4. THE ISSUE RAISED VIDE GROUND NO. 6 IS IDENTICAL TO THE ISSUES RAISED VIDE GROUND NO. 2 IN THE APPEAL FOR A.Y. 2007-08. THE DECISION FOR THE GRIEVANCE VIDE GROUND NO. 2 IN A.Y. 2007-08 IS AT PARAS 7 & 8 ON PG. 4 OF THE ORDE R OF THE TRIBUNAL. FACTS AND CIRCUMSTANCES BEING IDENTICAL, RESPECTFULLY FOLLOWI NG THE DECISION OF THE TRIBUNAL IN THE ASSESSEES OWN CASE WE UPHOLD THE ORDER OF THE LD. CIT(A) AND DISMISS GROUND NO. 6 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. 31,4 # ( 3# ( #, 5 ORDER PRONOUNCED IN THE OPEN COURT ON MARCH 20, 201 4 SD/- SD/- (H. L. KARWA) (N. K. BILLAIYA) / PRESIDENT / ACCOUNTANT MEMBER * + MUMBAI; 6 DATED : 20.03.2014 .7../ ROSHANI , SR. PS 4 ITA NO.138/MUM/2013 (A.Y. 2008-09) DY. DIT(E) VS. SAYAJI U-BA KHIN MEMORIAL TRUST ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. '% / THE APPELLANT 2. &''% / THE RESPONDENT 3. * 8, ( ) / THE CIT(A) 4. * 8, / CIT - CONCERNED 5. ;<= &7,7>? , - >?1 , * + / DR, ITAT, MUMBAI 6. =@ A+ / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , * + / ITAT, MUMBAI