Electronics Technology Parks Kerala, Trivandrum V. Addl Director of Income Tax(Exemption), Trivandrum

ITA 220/COCH/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7232 (ITAT-COCHIN)
• Duration Of Justice: 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2014
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 22-09-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 13-05-2014
• Court: TRIBUNAL
• Department Lawyers: M ANIL KUMAR; K K JOHN
• Assessee Lawyers: R SRIDHAR
• Keywords: Depreciation; Charitable institution; Cost of acquisition
• Section: 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND CHANDRA POOJ ARI, AM I.T.A. NO.220 /COCH/2014 ASSESSMENT YEAR : 2008-09 ELECTRONICS TECHNOLOGY PARKS- KERALA, PARK CENTRE, TECHNOPARK CAMPUS, KARYAVATTOM, TRIVANDRUM. [PAN: AAAAE2506N] VS. THE ADDL. DIRECTOR OF INCOME-TAX (EXEMPTION), TRIVANDRUM. (ASSESSEE -APPELLANT) (REVENUE-RESPONDEN T) ASSESSEE BY SHRI R. SRIDHAR, CA REVENUE BY SHRI K.K.JOHN, SR. DR & SHRI M. ANIL KUMAR, CIT(DR) DATE OF HEARING 22/09/2014 DATE OF PRONOUNCEMENT 24/09/2014 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 28-02-2014 PASSED BY THE CIT(A), TRIVANDRUM FOR TH E ASSESSMENT YEAR 2008-09 . 2. THE GRIEVANCE OF THE ASSESSEE IS WITH REGARD TO DISALLOWANCE OF DEPRECIATION TO THE TUNE OF RS.2,73,62,691/-. I.T.A. NO. 220/COCH/2014 2 3. THE FACTS OF THE CASE ARE THAT DURING THE COURSE OF VERIFICATION, IT WAS NOTICED THAT THE ASSESSEE IS ALSO CLAIMING DEPRECIA TION TO THE TUNE OF RS.2,73,62,691/- IN RESPECT OF NEWLY PURCHASED ASSE TS. THE ASSESSEE ALSO CLAIMED THE COST OF ASSETS AS APPLICATION OF INCOME . FOR CLAIMING BOTH THE DEPRECIATION AND COST OF ASSETS, THE ASSESSEE RELIE D UPON THE DECISION OF THE HONBLE BOMBAY HIGH COURT REPORTED IN 264 ITR 110 W HEREIN THE COURT RULED THAT THE ASSESSING OFFICER CANNOT DENY DEPREC IATION ON THE ASSETS, THE ENTIRE COST OF WHICH HAS BEEN FULLY ALLOWED AS APPL ICATION OF INCOME U/S. 11 IN THE PAST YEAR. THE COURTS DECISION CANNOT BE IN TERPRETED TO MEAN THAT THE ASSESSEE IS ELIGIBLE FOR CLAIMING BOTH DEPRECIA TION ON THE NEWLY PURCHASED ASSETS AS WELL AS THE COST OF THE NEWLY P URCHASED ASSETS IN THE SAME YEAR. HENCE, THE ASSESSEES CLAIM OF DEPRECIA TION ON ASSETS PURCHASED DURING THE CURRENT YEAR AMOUNTING TO RS.2 ,73,62,691/- WAS DISALLOWED. AGAINST THIS THE ASSESSEE IS IN APPEAL BEFORE US. 2. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORD. WE FIND THAT THIS ISSUE IS COVERED BY THE JUDGMENT OF THE JURISD ICTIONAL HIGH COURT IN THE CASE OF LISSIE MEDICAL INSTITUTIONS VS. CIT (2012) (348 ITR 344) WHEREIN IT WAS HELD THAT AFTER ALLOWING COST OF ACQUISITION AS APPLICATION OF INCOME FOR CHARITABLE PURPOSES AND OVER AND ABOVE IT DEPRECIAT ION IS CLAIMED ON SUCH ASSETS, SO MUCH OF THE DEPRECIATION ALLOWED WILL GE NERATE INCOME OUTSTANDING IN THE BOOKS OF ACCOUNT AND UNLESS DEPR ECIATION IS I.T.A. NO. 220/COCH/2014 3 SIMULTANEOUSLY WRITTEN BACK BY THE ASSESSEE AS INCO ME AVAILABLE FOR APPLICATION FOR CHARITABLE PURPOSES IN THE NEXT YEA R, THERE WILL BE VIOLATION OF SECTION 11(1)(A) OF THE ACT. IT WAS FURTHER OBSERV ED BY THE HONBLE HIGH COURT THAT THE CBDT IS OF THE CONSIDERED VIEW THAT WHERE AN ASSESSEE HAS ACQUIRED AN ASSET THROUGH APPLICATION OF INCOME AND HAS ALSO CLAIMED THIS AMOUNT AS EXPENDITURE IN ITS INCOME EXPENDITURE ACC OUNT, DEPRECIATION OF SUCH ASSETS WOULD NOT BE AVAILABLE TO THE ASSESSEE. IN VIEW OF THIS, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER WAS UPHE LD AND THE APPEAL WAS DISMISSED. IN VIEW OF THE ABOVE DISCUSSION, WE ARE INCLINED T O DECIDE THE ISSUE AGAINST THE ASSESSEE AND ACCORDINGLY, THIS GROUND O F THE ASSESSEE IS DISMISSED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMI SSED. PRONOUNCED ACCORDINGLY ON 24-09-2014 SD/- SD/- (N.R.S.GANESAN) (CHANDRA POOJARI) JUDICIAL MEMBER ACC OUNTANT MEMBER PLACE: KOCHI DATED: 24TH SEPTEMBER 2014 GJ COPY TO: 1. ELECTRONICS TECHNOLOGY PARKS- KERALA, PARK CENTRE, TECHNOPARK CAMPUS, KARYAVATTOM, TRIVANDRUM. I.T.A. NO. 220/COCH/2014 4 2. THE ADDL. DIRECTOR OF INCOME-TAX(EXEMPTION), TRIV ANDRUM 3. THE COMMISSIONER OF INCOME-TAX(APPEALS),TRIVANDR UM. 4. THE COMMISSIONER OF INCOME-TAX, TRIVANDRUM. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COCHIN