Services Association of Seventh Day Adventists P Ltd., CHENNAI V. ADIT, CHENNAI

ITA 1710/CHNY/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4794 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 01-08-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 24-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S NATARAJA
• Assessee Lawyers: R M NARAYANAN
• Keywords: Capital asset; Depreciation; Charitable institution
• Section: 12

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI , , % BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.1710/CHNY/2015 /ASSESSMENT YEAR: 2009-10 M/S.SERVICES ASSOCIATION OF SEVENTH- DAY ADVENTISTS (P) LTD., AA 148, III AVENUE, ANNA NAGAR, CHENNAI - 600 040. [PAN: AAACS 9035 J] VS. THE ADIT (EXEMPTIONS)-III, CHENNAI-34. ( ' /APPELLANT) ( ()' /RESPONDENT) ' * / APPELLANT BY : MR.R.M.NARAYANAN, CA ()' * /RESPONDENT BY : MR.S.NATARAJA, JCIT * /DATE OF HEARING : 15.02.2018 * / DATE OF PRONOUNCEMENT : 15.02.2018 / O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER : ITA NO.1710/CHNY/2016 IS AN APPEAL FILED BY THE AS SESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-1 7, CHENNAI, IN ITA NO.241/11-12 DATED 27.02.2015 FOR THE AY 2009-10. 2.0 SHRI S.NATARAJA, JCIT, REPRESENTED ON BEHALF OF THE REVENUE AND SHRI R.M.NARAYANAN, CA, REPRESENTED ON BEHALF OF TH E ASSESSEE. ITA NO.1710/CHNY/2015 :- 2 -: 3.0 IN REGARD TO GROUND NOS.1 TO 6, IT WAS SUBMITTE D BY THE LD.AR THAT THE ISSUE WAS AGAINST THE ACTION OF THE LD.CIT(A) I N NOT ALLOWING THE DEPRECIATION CLAIMED IN RESPECT OF THE ASSETS. IT WAS A SUBMISSION THAT THE ASSESSEE IS A CHARITABLE TRUST, WHICH WAS CLAIM ING THE BENEFIT U/SS.11 & 12 OF THE ACT. IT WAS A SUBMISSION THAT THE ISSU E IS SQUARELY COVERED BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CA SE OF RAJASTHAN & GUJARATI CHARITABLE FOUNDATION, POONA, REPORTED IN 89 TAXMANN.COM 129 (SC), WHEREIN, THE HONBLE SUPREME COURT HELD AS FO LLOWS: EVEN IF THE ENTIRE EXPENDITURE INCURRED FOR ACQUIS ITION OF CAPITAL ASSET IS TREATED AS APPLICATION OF INCOME FOR CHARITABLE PURPOSES U/S.11 (1)(A) OF THE ACT, THE ASSESSEE IS ALSO ENTITLED FOR DEPRECIATION U/S.32. 3.1 IN REPLY, THE LD.DR VEHEMENTLY SUPPORTED THE OR DER OF THE AO & THE LD.CIT(A). 3.2 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. 3.3 AS IT IS NOTICED THAT THE ISSUE OF DEPRECIATION IN RESPECT OF THE ASSETS, ON WHICH, THE CLAIM OF APPLICATION HAS BEEN MADE, IS, NOW, SQUARELY COVERED BY THE DECISION OF THE HONBLE SUP REME COURT IN THE CASE OF RAJASTHAN & GUJARATI CHARITABLE FOUNDATION, POON A, RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF RAJASTHAN & GUJARATI CHARITABLE FOUNDATION, POONA, THE FINDINGS OF THE LD.CIT(A) AND THAT OF THE AO IS REVERSED AND THE AO IS DIRECTED TO GRANT ITA NO.1710/CHNY/2015 :- 3 -: THE ASSESSEE, THE BENEFIT OF DEPRECIATION AS CLAIME D. CONSEQUENTLY, GROUND NOS.1 TO 6 OF THE ASSESSEES APPEAL ARE ALLO WED. 4.0 IN REGARD TO GROUND NOS.7 TO 9, IT WAS SUBMITTE D BY THE LD.AR THAT THE ISSUE WAS AGAINST THE ACTION OF THE LD.CIT(A) I N NOT QUANTIFYING THE CARRY FORWARD OF THE EXCESS APPLICATION OF THE EARL IER YEARS FOR SET OFF AGAINST THE POSSIBLE SURPLUS IN THE SUBSEQUENT YEAR S. IT WAS A SUBMISSION THAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT OF MADRAS IN THE CASE OF M/S.MEDICAL TRUST OF THE SEVENTH DAY ADVENTISTS IN TCA NOS.844, 845, 848, 84 9, 1079 OF 2010 DATED 08.08.2017 AS ALSO THE DECISION OF THE HONBL E JURISDICTIONAL HIGH COURT OF MADRAS IN THE CASE OF MATRISEVA TRUST, REP ORTED IN [2003] 128 TAXMAN 261 (MAD.), WHEREIN, IT HAS BEEN HELD AS FOL LOWS: 5. WITH REGARD TO THE SECOND QUESTION, THE TRIBUNAL HAS HELD THAT THE TRUST IS ENTITLED TO SET OFF THE AMOUNT OF EXCESS APPLICATION OF THE LAST YE AR AGAINST THE DEFICIENCY OF RS. 82,516 OF THE PRESENT ASSESSMENT YEAR. 6. WHEN SIMILAR QUESTIONS CAME UP BEFORE THE RAJAST HAN HIGH COURT AND THE GUJARAT HIGH COURT IN THE CASE OF CIT V. MAHARANA OF MEWAR CHARI TABLE FOUNDATION [1987] 164 ITR 439 AND CIT V. SHRI PLOT SWETAMBER MURTI PUJAK JAIN MAN DAL [19951 211 ITR 293, RESPECTIVELY, BOTH THE RAJASTHAN HIGH COURT AND THE GUJARAT HIGH COURT HAVE ANSWERED THE QUESTIONS IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 7. FOLLOWING THE AFORESAID DECISIONS OF THE RAJASTH AN AND GUJARAT HIGH COURTS, WE ANSWER THE SECOND QUESTION REFERRED TO US IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 4.1 IN REPLY, THE LD.DR VEHEMENTLY SUPPORTED THE OR DER OF THE AO & THE LD.CIT(A). 4.2 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ITA NO.1710/CHNY/2015 :- 4 -: 4.3 AS IT IS NOTICED THAT THE ISSUE IS, NOW, SQUARE LY COVERED BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF MATRISEVA TRUST, REFERRED TO SUPRA, RESPECTFULLY FOLLOWING TH E DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF MATRISEVA TRUST, THE AO IS DIRECTED TO GRANT THE ASSESSEE, THE BENEFIT OF THE CARRY FOR WARD OF EXCESS APPLICATION. CONSEQUENTLY, GROUND NOS.7 TO 9 OF TH E ASSESSEES APPEAL ARE ALLOWED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON FEBRUARY 15, 2018, AT CHENNAI. SD/- SD/- ( ) ( S. JAYARAMAN ) /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) /JUDICIAL MEMBER /CHENNAI, 1 /DATED: FEBRUARY 15, 2018. TLN * (23 43 /COPY TO: 1. ' /APPELLANT 4. 5 /CIT 2. ()' /RESPONDENT 5. 3 ( /DR 3. 5 ( ) /CIT(A) 6. /GF