ITO, Trichur V. Irinjalakkuda Diocesan Educational Trust, Trichur

ITA 221/COCH/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2602 (ITAT-COCHIN)
• Duration Of Justice: 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 25-07-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 26-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: C A VARGHESE
• Keywords: Depreciation; Charitable institution

Judgement Text

1 ITA NO. 221/COCH/2013 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 221/COCH/2013 (ASSESSMENT YEAR 2009-10) ITO, WD.1(1) VS IRINJALAKUDA DIOCESAN THRISSUR EDUCATIONAL TRUST IRINJALAKUDA, THRISSUR PAN : AAATI3075M (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. S VIJAYAPRABHA RESPONDENT BY : SHRI C.A. VARGHESE DATE OF HEARING : 25-07-2013 DATE OF PRONOUNCEMENT : 31-07-2013 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-V, KOCHI DATED 22-01-2013 AND PERTAINS TO ASSESSMENT Y EAR 2009-10. 2. SMT. S VIJAYAPRABHA, THE LD.DR SUBMITTED THAT TH E ONLY ISSUE BEFORE THE ASSESSING OFFICER WAS DEPRECIATION. THE ASSESS ING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE VE RY SAME INCOME WAS ALLOWED AS DEDUCTION ON APPLICATION OF INCOME. THE REFORE, THE ASSESSEE WAS NOT ENTITLED FOR DEPRECIATION IN VIEW OF THE DE CISION OF THIS TRIBUNAL IN DDIT VS LISSIE MEDICAL INSTITUTIONS ITA NO.1010/COC H/2008 & CO 2 ITA NO. 221/COCH/2013 NO.6/COCH/2009. HOWEVER, THE ASSESSEE CLAIMED BEFO RE CIT(A) THAT THE LOAN REPAID FOR CONSTRUCTION OF THE BUILDING HAS TO BE ALLOWED AS APPLICATION OF INCOME. THE CIT(A) WITHOUT GIVING ANY OPPORTUNI TY HAS ALLOWED THE CLAIM OF THE ASSESSEE. THE ASSESSEE HAS ALSO CLAIM ED EXEMPTION ON THE GROUND THAT THE INCOME WAS ACCUMULATED FOR CHARITAB LE PURPOSE. NO ONE HAS VERIFIED THE ACCUMULATION OF INCOME. THEREFORE , ACCORDING TO THE LD.REPRESENTATIVE, THE ADDITIONAL CLAIM OF THE ASSE SSEE MADE BEFORE THE CIT(A) WAS ALLOWED WITHOUT GIVING ANY OPPORTUNITY T O THE ASSESSING OFFICER. 3. ON THE CONTRARY, SHRI C.A. VARGHESE, THE LD.REPR ESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE BORROWED LOAN FOR THE PURPOSE OF CONSTRUCTION AND THE LOAN WAS REPAID FROM THE INCOM E OF THE CHARITABLE INSTITUTION. THEREFORE, THE REPAYMENT OF LOAN WAS CONSIDERED BY THE CIT(A) AS APPLICATION OF INCOME. THE CIT(A) ALSO FOUND TH AT 15% OF THE GROSS RECEIPT HAS TO BE TREATED AS ACCUMULATED INCOME FOR CHARITABLE PURPOSE. ON A QUERY FROM THE BENCH, WHETHER THESE ISSUES WER E RAISED BEFORE THE ASSESSING OFFICER, THE LD.REPRESENTATIVE FOR THE AS SESSEE VERY FAIRLY SUBMITTED THAT THESE ARE THE ADDITIONAL CLAIMS MADE BEFORE THE CIT(A) AND SUCH CLAIM WAS NOT MADE BEFORE THE ASSESSING OFFICE R. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IN RESPE CT OF ACCUMULATION OF INCOME AND THE REPAYMENT OF LOAN, THE ASSESSEE HAS RAISED THE ISSUE BEFORE THE CIT(A) FOR THE FIRST TIME. THE ASSESSIN G OFFICER HAD NO OCCASION 3 ITA NO. 221/COCH/2013 TO EXAMINE THE SAME. THIS TRIBUNAL IS OF THE CONSI DERED OPINION THAT THE ASSESSING OFFICER HAS TO EXAMINE THE ISSUE RAISED B Y THE ASSESSEE ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD. IT HAS TO BE VERIFIED WHETHER BORROWED LOANS WERE USED FOR CONSTRUCTION OF THE BU ILDING FOR CHARITABLE ACTIVITY. THE CIT(A) HAS NOT GIVEN ANY OPPORTUNITY TO THE ASSESSING OFFICER, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE AFRESH IN THE LIGHT OF THE MAT ERIAL AVAILABLE ON RECORD. 5. ACCORDINGLY, THE ORDER OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ISSUE OF ACCUMULATION OF INCOME AND REPAYMENT OF LO AN SAID TO BE BORROWED FOR CONSTRUCTION OF BUILDING IS REMITTED B ACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL EXA MINE THE ISSUE IN THE LIGHT OF MATERIAL AVAILABLE ON RECORD AND THEREAFTE R DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTU NITY OF HEARING TO THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 ST JULY, 2013. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 31 ST JULY, 2013 PK/- 4 ITA NO. 221/COCH/2013 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH