Central Tool Room, Ludhiana V. DCIT, C-1 (Exemptions), Chandigarh

ITA 1563/CHANDI/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4877 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 11-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA KANTA
• Keywords: Capital asset; Depreciation; Charitable institution; Capital expenditure
• Section: 11; 11A; 12A

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A, CHANDIGARH , !' # $ % &' , '( BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO. 1563/CHD/2018 / ASSESSMENT YEAR : 2015-16 CENTRAL TOOL ROOM, A-5, PHASE V, FOCAL POINT, LUDHIANA -141010 THE DCIT,C-1(E), CHANDIGARH ./PAN NO. AADFC8986E / APPELLANT /RESPONDENT ! /ASSESSEE BY : SHRI GAURAV SHARMA, CA ' ! / REVENUE BY : SMT. CHANDRAKANTA, SR.DR # $ % /DATE OF HEARING : 13.08.2019 &'() % / DATE OF PRONOUNCEMENT : 13.08 .2019 ')/ ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 28.09.2018 OF THE COMMISSIONER OF INCOM E TAX-4 , LUDHIANA [HEREINAFTER REFERRED TO AS CIT(A) ]. 2. THE SOLE ISSUE RAISED BY THE APPELLANT-ASSESSEE IN THIS APPEAL IS REGARDING CLAIM OF DEPRECIATION. THE APPELLANT SOCI ETY IS REGISTERED AS A ITA NO. 1563-C-2018 CENTRAL TOOL ROOM, LUDHIANA 2 CHARITABLE INSTITUTION U/S 12A OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'). FOR THE EARLIER ASSESSMENT YEARS, THE A PPELLANT-ASSESSEE WAS GRANTED EXEMPTION FROM TAXATION U/S 11 OF THE INCOM E TAX ACT. HOWEVER, FOR THE YEAR UNDER CONSIDERATION, THE ASS ESSING OFFICER DID NOT ALLOW THE ASSESSEE THE EXEMPTION U/S 11A OF TH E ACT AND ASSESSED THE INCOME OF THE ASSESSEE UNDER NORMAL PROVISIONS TREATING THE ASSESSEE AS ASSOCIATION OF PERSONS(AOP). THOUG H, THE ASSESSEE IN THIS APPEAL HAS NOT CONTESTED THE ACTION OF THE ASS ESSING OFFICER IN DENYING EXEMPTION TO THE ASSESSEE U/S 11 OF THE ACT , HOWEVER, THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE ASSESSING OFF ICER HAS NOT ALLOWED THE DEPRECIATION ON THE CAPITAL ASSETS AS PER THE P ROVISIONS OF THE INCOME TAX ACT. THE ASSESSEE HAS PLEADED THAT IT SHOULD BE ALLOWED DEPRECIATION AT THE RATE AS APPLICABLE TO AN AOP UNDER THE PR OVISIONS OF THE ACT AND FURTHER IT SHOULD BE ALLOWED DEPRECIATION ON TH E ADDITIONS OF PLANT AND MACHINERY MADE DURING THE ASSESSMENT YEAR UNDER CONSIDERATION 2015-16. 3. THE PLEA OF THE DEPARTMENT, ON THE OTHER HAND, I S THAT SINCE THE ASSESSEE IN EARLIER YEARS HAD CLAIMED EXEMPTION U/S 11 OF THE ACT AND THE EXPENDITURE INCURRED ON CAPITAL ASSETS HAD ALRE ADY BEEN ALLOWED AS APPLICATION OF INCOME, HENCE, THE DEPRECIATION SHO ULD NOT BE ALLOWED ON THE CAPITAL ASSETS AS IT WILL AMOUNT TO DOUBLE DEDU CTION. ITA NO. 1563-C-2018 CENTRAL TOOL ROOM, LUDHIANA 3 4. IN REBUTTAL, THE LD. COUNSEL FOR THE ASSESSEE HA S SUBMITTED THAT THE ASSESSEE HAD NOT CLAIMED ANY EXPENDITURE ON CAPITAL ASSETS AS APPLICATION OF INCOME IN THE EARLIER ASSESSMENT YEA RS DURING WHICH THE ASSESSEE WAS ALLOWED EXEMPTION FROM TAXATION AS PER THE PROVISIONS OF SECTION 11 OF THE ACT. 5. WE HAVE HEARD THE RIVAL CONTENTIONS. BOTH THE L D. REPRESENTATIVES OF THE PARTIES HAVE SUBMITTED THAT THIS FACTUAL ISS UE WHETHER THE ASSESSEE HAD CLAIMED EXPENDITURE ON CAPITAL ASSETS AS APPLIC ATION OF INCOME IN EARLIER YEARS IS REQUIRED TO BE THOROUGHLY EXAMINED BY THE ASSESSING OFFICER. THEREFORE, IT HAS BEEN SUBMITTED THAT THE MATTER BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR DECISION AFRE SH ON THIS ISSUE. WE ACCORDINGLY, RESTORE THIS ISSUE TO THE FILE OF T HE ASSESSING OFFICER TO DECIDE THE ISSUE RELATING TO THE DEPRECI ATION ON CAPITAL ASSETS AFRESH AFTER CONSIDERING THE SUBMISSIONS OF THE ASS ESSEE AND VERIFICATION OF THE RECORD RELATING TO THE CLAIM OF THE ASSESSEE THAT IT HAD NOT CLAIMED EXPENDITURE ON CAPITAL EXPENDITURE AS APPLICATION O F INCOME IN EARLIER ASSESSMENT YEARS. IF THE CLAIM OF THE ASSESSEE IS FOUND TO BE CORRECT THEN THE ASSESSING OFFICER TO ALLOW THE CLAIM OF DE PRECIATION TO THE ASSESSEE AS PER THE PROVISIONS OF INCOME TAX ACT IR RESPECTIVE OF THE TREATMENT GIVEN IN THE ACCOUNT BOOKS OF THE ASSESSE E. ITA NO. 1563-C-2018 CENTRAL TOOL ROOM, LUDHIANA 4 WITH THE ABOVE DIRECTIONS, THE APPEAL OF THE ASSESS EE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13.08.2019. SD/- SD/- ( # $ % &' / ANNAPURNA GUPTA) '( / ACCOUNTANT MEMBER ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 13.08.2019 .. '+ ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE '+ # / BY ORDER, 8 ' / ASSISTANT REGISTRAR