The Dy. Commissioner of Income Tax (Exemptions), Circle-1, Ahmedabad V. Mudra Foundation for Communication Research & Education, Ahmedabad

ITA 2191/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8236 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 23-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Depreciation; Charitable institution
• Section: 143(3); 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE DCIT, CIRCLE - 1, AHMEDABAD (APPELLANT) VS MUDRA FOUNDATION FOR COMMUNICATION RESEARCH & EDUCATION, MUDRA HOUSE, SHETH C.G. ROAD, ELLISBRIDGE, AHMEDABAD PAN: AAATM2168D (RESPONDENT) REVENUE BY : S H RI R.P. MAURYA , SR. D . R. ASSESSEE BY: S H RI SANJAY R. SHAH , A.R. DATE OF HEARING : 23 - 03 - 2 018 DATE OF PRONOUNCEMENT : 10 - 05 - 2 018 / ORDER P ER : AMARJIT SINGH, AC COUNTANT MEMBER : - THIS REVENUE S APPEAL FOR A.Y. 2008 - 09 , ARIS ES FROM ORDER OF THE CIT(A) - 9 , AHM EDABAD DATED 08 - 06 - 216 , IN PROCEEDINGS UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS JUSTIFIED IN ALLOWING THE ASSESSEE'S GROUND REGARDING REOPENING OF ASSESSMENT U/S. 147 OF THE ACT. 2) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LD. CIT(A) IS JUSTIFIED IN ALLOWING THE ASSESSEE'S APPEAL IN DELETING THE ADDITION OF DISALLOWANCE OF DEPRECIATION MADE BY THE ASSESSING OFFICER OF RS.5,51,186/ - I T A NO . 2191 / A HD/20 1 6 A SSESSMENT YEAR 200 8 - 09 I.T.A NO. 2191 /AHD/20 16 A.Y. 2008 - 09 PAGE NO DCIT VS. MUDRA FOUNDATION FOR COMMUNICATION RESEARCH AND EDUCATION 2 3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 4) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE BRIEF FACTS OF THE CASE ARE THAT ORIGINAL ASSESSMENT U/S. 143(3) WAS COMPLETED ON 16 TH NOV, 2010 BY ACCEPTING INCOME AT NIL. SUBSEQUENTLY, THE CASE WAS REOPENED U/S. 147 ON THE GROUND THAT ASSESSEE HAS CLAIMED DEPRECIATION OF RS. 53 , 16 , 941/ - AS APPLICATION OF THE INCOME WHICH W AS ALREADY ALLOWED AS AN EXPENDITURE IN THE EARLIER YEARS AS APPLICATION OF FUNDS, THEREFORE, ALLOWING DEPRECIATION WOULD AMOUNT TO DOUBLE DEDUCTION. IN VIEW OF THE ABOVE, THE ASSESSING OFFICER HAS CONCLUDED THAT FURTHER ALLOWANCE ON DEPRECIATION WILL A MOUNT TO DOUBLE DEDUCTION, THEREFORE, IN THE RE - ASSESSMENT PROCEEDINGS , HE HAS DISALLOWED THE CLAIM OF DEPRECIATION OF RS . 53 , 16 , 941/ - . 4. AGGRIEVED ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE BY STA TING THAT THE ISSUE ON ALLOWABILITY OF DEPRECIATION IN THE CASE OF CHARITABLE TRUST HAS BEEN DECIDED BY THE H ON BLE GUJARAT HIGH C OURT IN THE CASE OF CIT VS. SHETH MANILAL RANCHHODDAS VISHRAM BHAVAN TRUST 198 ITR 598 (GUJ). REGARDING FIRST GROUND OF APP EAL OF THE ASSESSEE PERTAINING TO REOPENING OF ASSESSMENT PERTAINING TO A SSESSMENT U/S. 147 OF THE ACT , THE LD. CIT(A) HAS ALLOWE D THE APPEAL OF THE ASSESSEE STATING THAT TH E ORIGINAL ASSESSMENT U/S. 143(3) WAS COMPLETED IN NOV, 2010 AND ASSESSING OFFICER HAS NO WHERE PROVIDED ANY FINDING THAT THEIR SATISFACTION REGARDING ANY FAILURE ON THE PART OF ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR REASSESSMENT. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECOR D CAREFULLY. THE ASSESSMENT U/S. 143(3) OF THE ACT WAS COMPLETED ON 16/11/2010 BY DETERMINING INCOME AT NIL IN THE CASE OF THE ASSESSEE. IN THE RE - ASSESSMENT , THE CLAIM OF DEPRECIATION OF RS . 53,16,941/ - WAS DISALLOWED ON THE GROUND THAT I.T.A NO. 2191 /AHD/20 16 A.Y. 2008 - 09 PAGE NO DCIT VS. MUDRA FOUNDATION FOR COMMUNICATION RESEARCH AND EDUCATION 3 THE CAPITAL EXPE NDIT UR E INCURRED ON THE FIXED ASSETS HAD BEEN ALLOWED AS AN EXPENDITURE IN THE EARLIER YEARS AS A P PREC IA TION OF FUNDS. THE LD. CIT(A) HAS ALLOWED THE CLAIM OF DEPRECIATION AFTER PLACING RELIANCE ON THE DECISION OF HON BLE GUJARAT HIGH COURT IN THE CA S E O F CIT VS. SHETH MANILAL RANCHHODDAS VISHRAM BHAVAN TRUST 198 ITR 598 (GUJ) AND THE DECISION OF THE CO - ORDINATE BENCH OF THE ITAT AHMEDABAD IN THE CASE OF SARDAR PATEL INSTITUTE OF PUBLIC ADMINISTRATION ASSESSMENT YEAR 2008 - 09 VIDE ITA NO. 1322/AHD/2011. D URING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, IT WAS BROUGHT TO OUR NOTICE BY THE LD. COUNSEL THAT HON BLE SUPREME COURT IN THE DECISION OF CIT - III, PUNE VS. RAJASTHAN AND GUJARAT CHARITABLE FOUNDATION POONA VIDE (2018) 89 TAXMANN.COM 127 HAS DECIDE D THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION OF HON BLE BOMBAY HIGH COURT IN CIT VS. INSTITUTE OF BANKING PERSONNEL SELECTION (IBPS) (2003) 131 TAXMAN 386 (BOMBAY). IT WAS HELD BY THE HON BLE BOMBAY HIGH COURT THAT THE INCOME OF THE TRUST IS REQUIRE D TO BE COMPUTED UNDER SECTION 11 ON COMMERCIAL PRINCIPLES AFTER PROVIDING FOR ALLOWANCE FOR NORMA L DEPRECIATION AND DEDUCTION THEREOF FROM GROSS INCOME OF THE T RUST. IN VIEW OF THE ABOVE FACTS AND JUDICIAL FINDINGS , W E DO NOT FIND ANY REASON TO INTERFERE IN THE DECISION OF L D. CIT(A). THEREFORE, THE APPEAL OF THE REVENUE IS DISMISSED ON THIS ISSUE. GROUND NO . 1 6. THIS IS UNDISPUTED FACT T HAT ASSESSMENT FOR T H E YEAR UNDER CONSIDERATION HAS BEEN REOPENED AF T ER 4 YEAR AS THE ORIGIN AL ASSESSMENT WAS COMPLETED ON 1 ST NO V , 2010. AFTER TAKING IN TO CONSIDERATION THE PROVISO TO SECTION 147 OF THE ACT W E OBSERVE THAT THE ASSESSING OFFICER HAS NOT DEMONSTRATED WITH ANY MA T ERIAL AND FINDINGS THAT HERE WAS ANY FAILURE ON THE P ART OF THE AS SESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR REASSESSMENT. AFTER CONSIDERING THE DECISION O F H O N BLE SUPREME COURT IN THE CASE OF ACIT VS. ICICI SECURITIES PRIMARY DEALERSHIP LTD. 348 ITR 299 AS ELABORATED IN THE FINDINGS OF THE LD. CIT(A) THAT THERE IS NOTHING NEW WHICH HAS COME TO THE NOTICE OF REVENUE. WE I.T.A NO. 2191 /AHD/20 16 A.Y. 2008 - 09 PAGE NO DCIT VS. MUDRA FOUNDATION FOR COMMUNICATION RESEARCH AND EDUCATION 4 UPHOLD THE DECISION OF LD. CIT(A) AND THE APPEAL OF THE REVENUE IS ALSO DISMISSED ON THIS ISSUE. 7 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 10 - 05 - 201 8 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 10 /05 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,