M/s. Sobhsaria Jankalyan Trust, Kolkata V. Jt.DIT(OSD)(Exemption) - 1, Kolkata , Kolkata

ITA 19/KOL/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4902 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 04-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C J SINGH
• Assessee Lawyers: S M SURANA
• Keywords: Capital asset; Depreciation
• Section: 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA SMC BENCH, KOLKATA [BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER] I.T.A. NO. 19/KOL/2018 ASSESSMENT YEAR: 2009-10 M/S. SOBHSARIA JANKALYAN TRUST........APPELLANT 31, SHIBTOLLA STREET KOLKATA 700 007 [PAN : AABTS 5849 L] JT. DIT (OSD) (EXEMPTION)-1, KOLKATA........RESPONDENT APPEARANCES BY: SHRI S.M. SURANA, ADVOCATE, APPEARED ON BEHALF OF THE ASSESSEE. SHRI C.J. SINGH, ADDL. CIT, APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : OCTOBER 10 TH , 2018 DATE OF PRONOUNCING THE ORDER : OCTOBER 26 TH , 2018 O R D E R PER J. SUDHAKAR REDDY :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-25, KOLKATA (HEREINAFTER THE LD. CIT (A)), PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (THE ACT), DT. 21/09/2017, FOR THE ASSESSMENT YEAR 2009-10 ON THE FOLLOWING GROUNDS:- 1. FOR THAT THE ORDER OF THE LD. CIT (A) IS ARBITRARY, AND BAD IN LAW. 2. FOR THAT THE LD. C.I.T(A) ERRED IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION CLAIMED BY THE ASSESSEE WHILE COMPUTING THE TOTAL INCOME AND APPLICATION THEREOF IGNORING THE BINDING JUDGEMENT OF THE HON'BLE KOLKATA HIGH COURT ON THE ISSUE AND THE PRINCIPLES LAID DOWN BY VARIOUS COURTS THAT DEPRECIATION WAS ALLOWABLE AS CLAIMED. 3. FOR THAT THE LD.CI.T(A) ERRED IN NOT CALCULATING THE APPLICATION OF INCOME AT 85% ON THE GROSS TOTAL RECEIPTS AND SHOULD NOT HAVE REDUCED THE ADMINISTRATIVE EXPENSES INCLUDING DEPRECIATION WHILE SO CALCULATING THE APPLICATION OF INCOME. 4. FOR THAT THE LD. C.I.T(A) ERRED IN NOT ADJUDICATING PROPERLY ON THE APPLICATION OF THE CAPITAL GAIN AGAINST ACQUISITION OF ANOTHER CAPITAL ASSET WHEN IT WAS SHOWN THAT THERE WAS NO SHORT FALL IN SUCH APPLICATION. 5. FOR THAT THE LD. CI.T(A) SHOULD HAVE HIMSELF DECIDED ON THE ISSUE WITH REGARD TO THE REINVESTMENT OF THE FUNDS REALIZED ON SALE IN OTHER CAPITAL WHEN ALL THE FACTS WERE BEFORE THE AO AND CIT(A) THAT THE ENTIRE 2 I.T.A. NO. 19/KOL/2018 ASSESSMENT YEAR: 2009-10 M/S. SOBHSARIA JANKALYAN TRUST FUNDS REALIZED WERE REINVESTED AND EVEN IF ANY SUCH SUM IS FOUND LEFT OUT THAN THE SAME SHOULD HAVE BEEN ADDED TO THE GROSS RECEIPTS FOR THE PURPOSE OF COMPUTATION U/ S 11. 6. FOR THAT THE LD. C.I.T(A) SHOULD HAVE HIMSELF DECIDED ON THE ISSUE THAT THE INVESTMENT IN THE ACQUISITION OF ASSETS DURING THE YEAR WAS RS. 16298236/- AND NOT RS. 13758033/- ALL THE FACTS WERE ON RECORD AND THE AO DID OT ASSIGN ANY REASON TO REDUCE THE CLAIM. 7. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ORDER OF THE AO AND CIT(A) BE MODIFIED AND THE ASSESSEE BE GIVEN THE RELIEF PRAYED FOR. 8. FOR THAT THE ASSESSEE CRAVES LEAVE TO ADD, ALTER OR AMEND ANY GROUND BEFORE OR AT THE TIME OF HEARING. 2. HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAW CITED, I HOLD AS FOLLOWS:- 3. GROUND NO. 1 IS GENERAL IN NATURE. 4. GROUND NO. 2 IS ON THE ISSUE OF DISALLOWANCE OF DEPRECIATION. ADMITTEDLY, THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF RAJASTHAN AND GUJRATI CHARITABLE FOUNDATION PUNE, IN CIVIL APPEAL NO. 7186 OF 2014, JUDGMENT DT. 13/12/2017. HENCE GROUND NO. 2 OF THE ASSESSEE IS ALLOWED. 5. GROUND NO. 3 IS ON THE ISSUE OF COMPUTATION OF ACCUMULATION OF 15% OF INCOME U/S 11(1) OF THE ACT. THE ISSUE INVOLVED HEREIN IS COVERED BY THE JUDGEMENT OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. BIRLA JANHIT TRUST, 208 ITR 372 WHEREIN IT WAS HELD THAT THE 15% ACCUMULATION IS TO BE CALCULATED AFTER DEDUCTING ADMINISTRATIVE EXPENSES AND DEPRECIATION. THE ASSESSING OFFICER IS DIRECTED TO APPLY THE RATIO LAID DOWN BY THE JURISDICTIONAL HIGH COURT ON THIS ISSUE TO THE FACTS OF THIS CASE. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 6. ON GROUND NO. 4 & 6, THE LD. CIT(A) HAS GIVEN CERTAIN DIRECTIONS TO THE ASSESSING OFFICER. THE ASSESSEES GRIEVANCE IS THAT THE ASSESSING OFFICER HAS NOT COMPLIED WITH THE SAME. HENCE THE ASSESSING OFFICER IS HEREBY DIRECTED TO COMPLY WITH THE DIRECTIONS OF THE LD. CIT(A) ON THESE ISSUES. THIS GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 3 I.T.A. NO. 19/KOL/2018 ASSESSMENT YEAR: 2009-10 M/S. SOBHSARIA JANKALYAN TRUST 7. GROUND NO. 5 IS REGARDING SETTING OFF OF TAXABLE CAPITAL GAIN AS APPLICATION OF INCOME U/S 11 OF THE ACT. THE ASSESSEES CASE IS THAT, THIS AMOUNT SHOULD BE TAKEN AS INCOME AND THE AMOUNT SPENT SHOULD BE TAKEN AS APPLICATION OF INCOME U/S 11. THE LD. ASSESSING OFFICER IS DIRECTED TO EXAMINE THIS CLAIM OF THE ASSESSEE AND DISPOSE OFF THE GROUNDS, IN ACCORDANCE WITH LAW. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. KOLKATA, THE 26 TH DAY OF OCTOBER, 2018. SD/- [ J. SUDHAKAR REDDY ] ACCOUNTANT MEMBER DATED :26.10.2018 {SC SPS} COPY OF THE ORDER FORWARDED TO: 1. M/S. SOBHSARIA JANKALYAN TRUST 31, SHIBTOLLA STREET KOLKATA 700 007 2. JT. DIT (OSD) (EXEMPTION)-1, KOLKATA 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSISTANT REGISTRAR HEAD OF OFFICE/ D.D.O. ITAT, KOLKATA BENCHES