DCIT, Ambala Cantt. V. M/s Mata Sudershan Tilak Raj Dhawan Educational Trust, Ambala Cantt.

ITA 187/CHANDI/2011

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1283 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 18-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S KEMWAL
• Keywords: Capital asset; Depreciation; Charitable institution
• Section: 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL: B BENCH: CH ANDIGARH BEFORE SHRI D K SRIVASTAVA, AM AND MS. SUSHMA CHOWL A, JM ITA NO. 187/CHANDI/2011 ASSESSMENT YEAR: 2007-08 D.C.I.T., AMBALA V M/S MATA SUDARSAN TILAK RAJ DHAWAN EDUCATIONAL TRUST, TRIBUNE COLONY, AMBALA CANTT. PAN: AAATM 3691B APPELLANT BY: SHRI S.S. KEMWAL, DR RESPONDENT BY: SHRI SUDHIR SEHGAL, ADVOCATE ***** ITA NO. 188/CHANDI/2011 ASSESSMENT YEAR: 2007-08 D.C.I.T. AMBALA V SHRI RAM SWARUP MEMORIAL TRUST 20, INDUSTRIAL AREA, AMBALA CANTT PAN: AACTS 3665D APPELLANT BY: SMT. JAISHREE SHARMA, DR RESPONDENT BY: SHRI SUDHIR SEHGAL, ADVOCATE ORDER D K SRIVASTAVA: BOTH THE APPEALS FILED BY THE DEPAR TMENT ARE DIRECTED AGAINST THE APPELLATE ORDERS SEPARATELY PASSED BY THE LD. C IT(A) ON 2.12.10 IN CASE OF BOTH THE AFORESAID ASSESSEES. GROUNDS OF APPEAL TAKEN BY THE DEPARTMENT ARE IDENTICALLY WORDED IN BOTH THE APPEALS EXCEPT FOR DIFFERENCE IN THE AMOUNT. WE, THEREFORE, FIND IT CONVENIENT TO DISPOSE OFF BOTH THE APPEAL BY A CONS OLIDATED ORDER. 2. IN ITA NO. 187/CHANDIGARH/2011, THE DEPARTMENT HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN ALLOWING DEPRECIATION OF RS.1,16,34,123/- TO THE ASSESSEE TRUST AS APPLICATION OF INCOME EVEN WHEN THE ENTIRE COST OF THE RELEVANT ASSETS HAS ALREADY BEEN CLAIMED AND ALLOWED AS APPLICATION OF INCOME IN THE YEAR OF ACQUISITION ITSELF? 3. IN ITA NO. 188/CHANDIGARH/2011, THE DEPARTMENT HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) HAS ERRED IN ALLOWING DEPRECIATION OF RS.1,09,76,691/- TO THE ASSESSEE TRUST AS APPLICATION OF INCOME EVEN WHEN THE ENTIRE COST OF THE RELEVANT ASSETS HAS M/S MATA SUDERSHAN TILAK RAJ DHAWAN EDUCATINAL TRUST SHRI. RAM SARUP MEMORIAL TRUST 187 & 188/CHANDI/2011 2 ALREADY BEEN CLAIMED AND ALLOWED AS APPLICATION OF INCOME IN THE YEAR OF ACQUISITION ITSELF? 4. WE HAVE HEARD BOTH THE PARTIES. THE SHORT ISSUE IN BOTH THE APPEALS IS WHETHER DEPRECIATION CLAIMED BY THE ASSESSEE AND ALLOWED BY THE DEPARTMENT CAN BE TREATED AS APPLICATION OF INCOME U/S 11 OF THE I-T ACT. FOL LOWING THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT V. MARKET COMMITTE E, PIPLI, 45 DTR (P & H) 381, THE LD. CIT(A) HAS HELD THAT THE DEPRECIATION ALLOWED B Y THE ASSESSEE IS LIABLE TO BE TREATED AS APPLICATION OF INCOME. PARA 3.3 OF THE A PPELLATE ORDER PASSED BY THE LD. CIT(A) IN THIS BEHALF IN THE CASE OF M/S MATA SUDER SHAN TILAK RAJ DHAWAN EDUCATIONAL TRUST, AMBALA CANTT READS AS UNDER: I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE B Y THE APPELLANT AND THE REASONING GIVEN BY THE AO WHILE DISALLOWING THE CLA IM OF DEPRECIATION BY THE APPELLANT AND FIND MERIT IN THE SUBMISSIONS MADE BY THE APPELLANT. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF MARKET C OMMITTEE, PIPLI, 45 DTR 381 HAVE HELD THAT THE DEPRECIATION IS ALLOWABLE ON CAPITAL ASSETS FROM THE INCOME OF THE CHARITABLE TRUST FOR DETERMINING THE QUANTUM OF FUNDS WHICH HAVE TO BE APPLIED FOR THE PURPOSES OF THE TRUST IN TERMS OF SECTION 11 OF THE ACT. RESPECTFULLY FOLLOWING THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT AND THE ADDITION MADE BY THE AO AMOUNTING TO RS. 1,16,34,123/- BY WAY OF DISALLOWANCE OF DEPRECIATION IS DELETED. THIS GR OUND OF APPEAL IS ALLOWED. 5. THE APPEAL BY SHRI RAM SWARUP MEMORIAL TRUST, AM BALA CANTT HAS ALSO BEEN ALLOWED BY THE LD. CIT(A) WITH SIMILAR OBSERVATIONS AS AFORESAID. 6. WE HAVE HEARD BOTH THE PARTIES. AT THE TIME OF H EARING, THE LD. DR COULD NOT BRING TO OUR NOTICE ANY DECISION EITHER BY A LARGER BENCH OF THE HON'BLE JURISDICTIONAL HIGH COURT OR THE HON'BLE SUPREME COURT OVER-RULING THE JUDGMENT IN CIT V. MARKET COMMITTEE, PIPLI (SUPRA). THE AFORESAID JUDGMENT RE NDERED BY THE HON'BLE JURISDICTIONAL HIGH COURT IS BINDING ON THIS TRIBUN AL AS ALSO ON THE LD. CIT(A). WE, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORDER O F THE LD. CIT(A). HIS ORDERS IN BOTH THE APPEALS ARE CONFIRMED. BOTH THE APPEALS FILED B Y THE DEPARTMENT ARE DISMISSED. ORDER PRONOUNCED ON 30 MARCH 2011 SD/- SD/- (SUSHMA CHOWLA) (D K SRIVASTAVA) JUDICIAL MEMBER ACCOUNTANT MEMBER CHANDIGARH: THE 30 MARCH 2011 SURESH M/S MATA SUDERSHAN TILAK RAJ DHAWAN EDUCATINAL TRUST SHRI. RAM SARUP MEMORIAL TRUST 187 & 188/CHANDI/2011 3 COPY TO: 1. THE APPELLANT, D.C.I.T. AMBALA 2. THE RESPONDENT, 1. M/S MATA SUDERSHAN TILAK RAJ DHAWAN EDUCATIONAL TRUST, AMBALA CANTT. 2. SHRI RAM SWARUP MEMORIAL TRUST, AM BALA CANTT. 3. THE CIT(A), PANCHKULA 4. THE LD. CIT, PANCHKULA 5. THE D.R, INCOME-TAX DEPARTMENT, CHANDIGARH TRUE COPY B Y ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH