CARE FOUNDATION , MUMBAI V. COMMISSIONER OF INCOME TAX(APPEAL) NFAC, DELHI, MUMBAI

ITA 2224/MUM/2022

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 9730 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 25-10-2022
• Assessment Year: 2018-2019
• Appeal Filed On: 04-09-2022
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Keywords: Capital asset; Depreciation
• Section: 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘SMC‘ BENCH MUMBAI BEFORE: SHRI M.BALAGANESH, ACCOUNTANT MEMBER ITA No.2224/Mum/2022 (Assessment Year :2018-19) Care Foundation Jawahar Talkies Compound, R.P.Road, Mulund (West), Mumbai-400080 Vs. Commissioner of Income Tax (Appeals)NFAC, Delhi. North Block, National Faceless Assessment Centre, New Delhi-110001 PAN/GIR No.AAATC2868E (Appellant) .. (Respondent) Assessee by None Revenue by Pratap Narayan Sharma Date of Hearing 26/10/2022 Date of Pronouncement 26/10/2022 आदेश / O R D E R PER M. BALAGANESH (A.M): This appeal in ITA No. 2224/Mum/2022 for A.Y.2018-19 arises out of the order by the ld. Commissioner of Income Tax (Appeals)- National Faceless Appeal Centre (NFAC) in appeal No. NFAC/2017-18/10045053 dated 15/07/2022 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3)of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 03/03/2021 by the ld. Assistant Commissioner of Income Tax (hereinafter referred to as ld. AO). 2.The only issue to be decided in this appeal is as to whether the ld.CIT(A) was justified in confirming the disallowance of depreciation ITA No. 2224/Mum/2022 Care Foundation 2 made by the ld.AO to the extent of Rs. 10,64,924/- in the facts of the circumstance of the instant case. 3.None appeared on behalf of the assessee. We have heard the ld.DR and perused the materials available on record. We find that assessee is a Public Charitable Trust duly registered u/s. 12A of the Act, having charitable objects for providing medical relief and education to the poor and upliftment of female and weaker sections of the society. During the year under consideration, the assessee claimed a sum of Rs. 10,64,924/- on account of depreciation as application of income against the gross receipts of the trust. This depreciation was claimed on certain fixed assets purchased and used by the assessee for the purpose of running the charitable activities of the assessee trust. The assessee made a plea that it had not claimed the cost of assets as an application of income in the year in which asset was acquired. Hence, it is entitled to claim depreciation as an application of income u/s. 11(6)of the Act. We find that the ld.CIT(A) had only resorted to explain the history behind allowance of depreciation in the hands of trust prior to A.Y. 2014-15 and thereafter. We find that the ld.CIT(A) had only sort to address the issue in dispute on the aspect of capital asset ought to have been claimed as an application of income in the year of purchase. We are unable to pursuade ourselves to accept to this observation of the ld.CIT(A), especially when the assessee makes a categorical statement that it had not claimed the cost of asset (on which depreciation has been claimed) as an application of income in the year of purchase. This matter could be verified by the revenue from the earlier year from income-tax records. No factual finding has been recorded by the lower authorities to the fact as to whether at all the cost of asset has been claimed as an application of income by the assessee in the year of purchase in earlier year. Hence, we deem it fit and appropriate to remand this issue to the file of ld.AO for the limited ITA No. 2224/Mum/2022 Care Foundation 3 purpose of verification of fact as to whether the assessee had claimed the cost of asset as an application of income in the year of purchase. If it is found that assessee had claimed the cost of asset as an application of income, then the assessee will not be eligible for depreciation in terms of section 11(6) of the Act. Otherwise, the assessee would be eligible of allowance of depreciation during the year under consideration. With this direction, the grounds raised by the assessee are allowed for statistical purpose. 4. In the result, the appeal is allowed for statistical purpose. Order pronounced on 26/10/2022 in open Court. Sd/- (M.BALAGANESH) ACCOUNTANT MEMBER Mumbai; Dated 26/10/2022 KARUNA, sr.ps Copy of the Order forwarded to : BY ORDER, (Sr. Private Secretary / Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. The CIT(A), Mumbai. 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy//