The ACIT- 2(1), Bhopal V. M/s Shail Educational & welfare Society, Indore

ITA 174/IND/2013

• Counselvise Citation: 17422714 RSA 2013
• Duration Of Justice: 1 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 04-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R A VERMA
• Keywords: Depreciation
• Section: 32; 148; 28; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI MUKU L KR. SHRAWAT, JUDICIAL MEMBER PAN NO. AABAS3763R ITA NO. 174/IND/2013 A.Y. : 2004-05- ACIT, 2(1), BHOPAL VS. M/S. SHA IL EDUCATIONAL & WELFARE SOCIETY, PITHAMPUR ROAD, RAU (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.A.VERMA, SR. DR . REVENUE BY : SHRI HITESH CHIMNANI, C. A. / // / DATE OF HEARING : 16.09.2014 /DATE OF PRONOUNCEMENT: 19/09/2014 / O R D E R PER P.K.BANSAL, A.M. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF CIT(A), RAIPUR, DATED 12.12.2012 BY TAKING FOLLO WING EFFECTIVE GROUND OF APPEAL :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE O F RS. 36,66,096/- MADE BY THE ASSESSING OFFICER ON ACCOUN T OF DEPRECIATION CLAIMED BY THE ASSESSEE. SHAIL EDUCATIONAL & WELFARE SOCIETY, RAU, I.T.A.NO. 174/IND/2013 A.Y.2004-05 2 2. THE FACTS RELATING TO THIS GROUND IS THAT THE ASSES SING OFFICER OBSERVED THAT THE ASSESSEE IS AN EDUCATIONA L SOCIETY AND IN THE ORIGINAL ASSESSMENT DEPRECIATION AMOUNTING T O RS. 36,66,096/- WAS ALLOWED. THEREFORE, NOTICE U/S 148 WAS ISSUED ON 30.3.2011. SINCE THE SOCIETY WAS REGISTERED U/12 A W.E.F. 1.4.2004, THEREFORE, THE ASSESSING OFFICER WAS OF T HE VIEW THAT THE ASSESSEE WAS NOT ENTITLED FOR THE BENEFIT OF THE PR OVISION OF SECTION 11 ALLOWING AS IT RELATES TO ASSESSMENT YEA R 2004-05. THE ASSESSING OFFICER NOTED THAT SINCE THE ASSESSEE IS AN EDUCATIONAL SOCIETY NOT CARRYING ON ANY BUSINESS OR PROFESSION, HE, THEREFORE, DISALLOWED DEPRECIATION CLAIMED AT RS. 36,66,096/-. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) AND RELIED ON THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. RA IPUR PALLOTINE SOCIETY, 180 ITR 579, WHEREIN IT HAS BEEN HELD THAT CONTENTION OF THE REVENUE THAT DEPRECIATION U/S 32 COULD BE ALLOW ED ONLY WHEN INCOME WAS COMPUTED UNDER THE HEAD BUSINESS FALLI NG UNDER SECTION 28 IS NOT JUSTIFIED. THE LD. CIT(A) ALLOWED THE DEPRECIATION TO THE ASSESSEE BY OBSERVING AS UNDER :- 6. I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER AND SUBMISSIONS OF THE APPELLANT. THE ONLY ISSUE TO BE DECIDED IN THE INSTANT CASE IS ALLOWABILITY OF DEPRECIATION ALLOWANCE. I FIND THAT SHAIL EDUCATIONAL & WELFARE SOCIETY, RAU, I.T.A.NO. 174/IND/2013 A.Y.2004-05 3 THE CASE OF THE APPELLANT IS SQUARELY COVERED BY TH E DECISIONS RELIED UPON BY THE APPELLANT AND I AM CONVINCED THAT IT IS NOW A SETTLED POSITION OF LAW THAT EVEN THE TRUST ENTITLED FOR EXEMPTION U/S 11 I S ALSO ENTITLED FOR DEPRECIATION ALLOWANCE. HENCE, THERE IS NO MERIT IN THE DISALLOWANCE OF DEPRECIATION MADE BY THE ASSESSING OFFICER HOLDING THAT THE APPELLANT IS ENGAGED IN RUNNING EDUCATIONAL INSTITUTE. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE AS ALSO THE DECISIONS RELIED UPON BY THE APPELLANT, THE DISALLOWANCE OF DEPRECIATION MADE BY THE ASSESSING OFFICER CANNOT BE SUSTAINED. HENCE, THE DISALLOWANCE IS DELETED. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONGWITH THE ORDERS OF THE TAX AUTHORITIES BELOW. IN OUR VIEW, NO INTERFERENCE IS CALLED FOR I N THE DECISION OF THE CIT(A). THE CASE OF THE ASSESSEE IS COVERED BY THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS . RAIPUR PALLOTINE SOCIETY, 180 ITR 579, IN WHICH THE DIVISI ON BENCH OF THE HON'BLE HIGH COURT HAS REJECTED THE CONTENTION OF T HE REVENUE THAT THE DEPRECIATION U/S 32 OF THE INCOME-TAX ACT, 1961, COULD BE ALLOWED ONLY WHEN THE INCOME WAS COMPUTED UNDER THE HEAD BUSINESS FALLING U/S 28 OF THE INCOME-TAX ACT, 19 61. DECISION OF SHAIL EDUCATIONAL & WELFARE SOCIETY, RAU, I.T.A.NO. 174/IND/2013 A.Y.2004-05 4 THE JURISDICTIONAL HIGH COURT IS BINDING ON US. WE, ACCORDINGLY, DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDE R OF THE CIT(A). WE, THEREFORE, DISMISS THE GROUND TAKEN BY THE REVE NUE. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. SD/- SD/- (MUKUL KR. SHRAWAT) (P. K. BANSAL) JUDICIAL MEMBER ACCOUNTANT M EMBER INDORE; DATED 19/09/2014 CPU*SPS / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT. 3. $%$&' # # ( / CONCERNED CIT 4. # # ( ( ) / THE CIT(A), INDORE 5. +,# &' , # # &' , -.% / DR, ITAT, INDORE 6. ,/0 1 / GUARD FILE. / BY ORDER, -# -# -# -# $2 $2 $2 $2 (ASSTT.REGISTRAR) ITAT, IND ORE SHAIL EDUCATIONAL & WELFARE SOCIETY, RAU, I.T.A.NO. 174/IND/2013 A.Y.2004-05 5 1. DATE OF DICTATION- 16.09.2014 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 19.09.2014 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT .. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 26.09.2014 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 8. DATE OF DESPATCH OF THE ORDER