ITO, Coimbatore V. Ramaswamy Naidu and Rama Ranganathan Charities, Coimbatore

ITA 2224/CHNY/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7156 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 05-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Keywords: Depreciation; Charitable institution; Capital expenditure
• Section: 12A

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL A BENCH, CHE NNAI . , . ! ! ! ! , ' ' ' ' # # # # BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI V. DURGA RAO, JUDICIAL MEMBER ./ I.T.A.NO.2224/MDS/2014 ' ! $! / ASSESSMENT YEAR :2010-11 THE INCOME TAX OFFICER, COMPANY WARD I, 1 ST FLOOR, 63, RACE COURSE ROAD, COIMBATORE 641 018. VS. M/S. RAMASWAMY NAIDU AND RAMA RANGANATHAN CHARITIES, 54, UPPILIPALAYAM POST, COIMBATORE 641 015. [PAN : AAATR2860H] ( %& %& %& %& /APPELLANT ) ( '(%& '(%& '(%& '(%& / RESPONDENT ) %& ) * / APPELLANT BY : SHRI P. RADHAKRISHNAN, JCIT '(%& ) * / RESPONDENT BY : NONE ) + / DATE OF HEARING : 02.12.2014 ,$ ) + /DATE OF PRONOUNCEMENT : 12.12.2014 - - - - / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) I, COIMBATORE, DATED 26.06.2014 RELEVANT TO THE ASSESSMENT YEAR 2010-11. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S PUBLIC CHARITABLE TRUST DULY REGISTERED UNDER SECTION 12A OF THE INCOME TAX ACT, 1961. THE ASSESSEE TRUST HAS CLAIMED DEPRECIATION OF .28,08,639/-. ACCORDING TO THE I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.22 2222 222 22 24 44 4/M/ /M/ /M/ /M/1 11 14 44 4 2 ASSESSING OFFICER, WHEN THE ENTIRE COST OF ASSETS H AVE ALREADY BEEN CLAIMED AS APPLICATION OF INCOME TOWARDS OBJECTS OF THE TRU ST, THE CLAIM OF DEPRECIATION ON THE COST OF THE VERY SAME ASSETS RE SULTS IN DOUBLE DEDUCTION AND DENIED THE CLAIM OF THE ASSESSEE. 3. ON APPEAL, THE LD. CIT(A), BY FOLLOWING THE DEC ISIONS OF THE ITAT IN THE CASE OF M/S. ELLEN CHARITABLE TRUST IN I.T.A. NO. 1 910/MDS/2013 DT. 13.02.2014 AND M/S. VIDYA VIKASINI SOCIETY IN I.T.A . NO. 1935/MDS/2013 DATED 07.03.2014, DIRECTED THE ASSESSING OFFICER TO ALLOW THE DEPRECIATION CLAIMED BY THE ASSESSEE. 4. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. THE LD. DR STRONGLY SUPPORTED THE ORDER PASSED BY THE ASSESSING OFFICER. 6. NONE APPEARED ON BEHALF OF THE ASSESSEE, DESPIT E SERVICE OF NOTICE. HENCE, WE PROCEEDED TO DECIDE THE APPEAL AFTER HEAR ING THE LD. DR. 7. WE HAVE HEARD LD. DR, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ONLY I SSUE RAISED FOR OUR CONSIDERATION IS WHETHER THE DEPRECIATION IS ALLOWA BLE ON THE FIXED ASSETS, WHEN THE ENTIRE COST OF ASSETS HAVE ALREADY BEEN CL AIMED AS APPLICATION OF INCOME TOWARDS OBJECTS OF THE TRUST. THE ASSESSING OFFICER, BY FOLLOWING THE I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.22 2222 222 22 24 44 4/M/ /M/ /M/ /M/1 11 14 44 4 3 DECISION OF THE HONBLE KERALA HIGH COURT, REJECTED THE CLAIM OF DEPRECIATION MADE BY THE ASSESSEE. HOWEVER, THE LD. CIT(A), BY F OLLOWING TRIBUNALS ORDER, DIRECTED THE ASSESSING OFFICER TO ALLOW THE CLAIM OF DEPRECIATION OF THE ASSESSEE. WE FIND THAT THE TRIBUNAL, IN ITS RECENT DECISION IN THE CASE OF ITO V. M/S. CMS EDUCATIONAL & CHARITABLE TRUST IN I.T.A . NO. 2261/MDS/2012 & OTHERS DATED 17.04.2013, BY CONSIDERING THE JUDGEME NT OF HONBLE KERALA HIGH COURT, DECIDED SIMILAR ISSUE ON IDENTICAL FACT S, WHEREIN THE TRIBUNAL HAS HELD AS UNDER: 5. WE HAVE HEARD THE PARTIES AND PERUSED THE CASE FILES. 6. THE THREE ASSESSEES BEFORE US ARE TRUSTS AND SCRUTINY ASSESSMENTS WERE FINALIZED IN THEIR CASES. THEREIN, THE ASSESSING OFFICER(S) REJECTED THEIR CLAIM OF DEPRECATION ON A SSETS BY HOLDING THAT UNDER SEC 11 OF THE ACT, SINCE CAPITAL EXPENDITURE INCURRED BY A TRUST IS ALLOWABLE AS DEDUCTION, THEREFORE, RELIEF QUA DEPRE CATION WOULD LEAD TO DOUBLE DEDUCTION. 7. IN APPEAL BY THE ASSESSEES, THE CIT(A) PLACED R ELIANCE ON THE DECISIONS OF HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS MARKET COMMITTEE, PIPLI (2011) 330 ITR 16 (P & H) AND CIT VS TINY TOTS EDUCATION SOCIETY (2011) 330 ITR 21 DI STINGUISHING THE CASE OF ESCORTS INDIA LIMITED VS UNION OF INDIA (19 9 ITR 43) AND HELD THAT SUCH CLAIMS OF DEPRECIATION, DO NOT RESULT IN DOUBLE DEDUCTION I.E., DEPRECIATION AND CAPITAL EXPENDITURE ON FIXED ASSET S. 8. THIS LEAVES THE REVENUE AGGRIEVED. 9. AS ALREADY STATED HEREINABOVE, THE SOLE ISSUE I NVOLVED IS DEPRECIATION IN CASE OF TRUSTS I.E., WHETHER IT A MOUNTS TO DOUBLE DEDUCTION OR NOT. WE FIND THAT, THE REVENUE HAS RE LIED ON A DECISION OF HONBLE KERALA HIGH COURT (PLEADED IN THE GROUNDS) AND ON THE OTHER HAND, THE ASSESSEES DRAW SUPPORT FROM THE DECISIONS OF THE HONBLE PUNJAB AND HARYANA HIGH COURT (SUPRA). FACED WITH T HIS SITUATION, WE DRAW SUPPORT FROM THE CASE LAW CIT VS. VEGETABLE PR ODUCTS 88 ITR 192 (SC), HOLDING THAT IN CASE OF DIVERGENT JUDICI AL PRECEDENTS, THE ONE I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.22 2222 222 22 24 44 4/M/ /M/ /M/ /M/1 11 14 44 4 4 WHICH FAVOURS THE ASSESSEE HAS TO BE ADOPTED AND CO NFIRM THE CIT(A)S FINDINGS. 8. THE LD. DR HAS NOT BROUGHT ON RECORD ANY MATERI AL TO SHOW THAT THE ABOVE DECISION OF THE TRIBUNAL HAS BEEN EITHER MODI FIED OR REVERSED BY ANY HIGHER COURTS. THEREFORE, WE FIND NO INFIRMITY IN T HE ORDER PASSED BY THE LD. CIT(APPEALS) ON THIS ISSUE AND DISMISS THE APPEAL F ILED BY THE REVENUE. 9. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 12 TH OF DECEMBER, 2014 AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER CHENNAI, DATED, THE 12.12.2014 VM/- - ) ''+./ 0/$+ /COPY TO: 1. %& / APPELLANT, 2. '(%& / RESPONDENT, 3. 1 ( ) /CIT(A), 4. 1 /CIT, 5. /2 ''+' /DR & 6. 3! 4 /GF.