ITO, New Delhi V. Nav Nirman Sewa Samiti, New Delhi

ITA 2621/DEL/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5818 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2011-2012
• Appeal Filed On: 01-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Charitable institution; Capital expenditure
• Section: 11

Judgement Text

- INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E: NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NOS.:-2620, 2621/DEL/2015 ASSESSMENT YEARS: 2010-11, 2011-12 O R D E R PER AMIT SHUKLA, J.M. THE AFORESAID APPEALS HAVE BEEN FILED BY THE REVENUE AGAINST SEPARATE IMPUGNED ORDER OF EVEN DATE 24.2.2015, PAS SED BY LD. CIT (APPEALS) 40, NEW DELHI FOR THE QUANTUM OF ASSESSM ENT PASSED U/S143(3) FOR THE ASSESSMENT YEARS 2010-11 AND 2011-1 2. IN BOTH THE APPEALS THE COMMON ISSUES RAISED ARE AS UNDER:- ITO (E) WARD 2(4), NEW DELHI. VS. NAV NIRMAN SEWA SAMITI, BN-9(EAST) SHALIMAR BAGH, NEW DELHI 110 088. (APPELLANT) (RESPONDENT) ASSESSEE BY: NONE DEPARTMENT BY : SHRI S.R. SENAPATI, SR. D.R. DATE OF HEARING 27/06/2018 DATE OF PRONOUNCEMENT 27/06/2018 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT (A) HAS ERRED IN ALLOWING THE CLAIM OF DEPR ECIATION OF RS.1,05,12,224/- TO THE ASSESSEE IGNORING THE FACT THAT THE ASSESSEE HAD CLAIMED THE AMOUNT INCURRED ON PURCHAS E OF ASSETS IN EARLIER YEARS AS APPLICATION OF INCOME, ON WHICH DEPRECIATION IS CLAIMED NOW AND FURTHER ALLOWANCE OF DEPRECIATION W ILL BE TANTAMOUNT TO DOUBLE DEDUCTION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE CLAIM OF DEPRE CIATION OF RS.1,05, 12,224/ - TO THE ASSESSEE IN VIEW OF THE R ECENT DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF DIT(E) VS CHARANJIV CHARITABLE TRUST DATED 18.03.2014. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE CLAIM OF CARRY FORWARD OF LOSSES DISREGARDING THE FACTS THAT THE SET-OFF AND CARRY FORWARD OF LOSSES ARE DEALT WITH BY THE PROVISION OF SECTION 7 0,71,72,73 & 74 OF THE INCOME TAX ACT. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, T HE LD. CIT(A) HAS ERRED IN ALLOWING THE CLAIM OF CARRY FORWARD OF LOSSES DISREGARDING THE FACTS THAT THE PROVISION OF THE ACT ARE NOT APPLICABLE IN THE CASES WHO ARE CLAIMING EXEMPTION U/S 11&12 OF THE INCOME TAX ACT, 1961. IN THE ASSESSMENT YEAR 2011-12 THE FIGURE OF DEPRECIATI ON AS APPEARING IN GROUND NO. 1 IS RS. 1,26,75,940/- OTHE RWISE THE GROUNDS ARE IDENTICAL. 2. THE FACTS IN BRIEF ARE THAT ASSESSEE SOCIETY IS REGISTERED UNDER SOCIETIES REGISTRATION ACT, 1860. LOOKING TO ITS OBJECTS WHICH ARE WERE 3 FOR CHARITABLE PURPOSES, IT WAS GRANTED REGISTRATION U /S 12AA(1) VIDE ORDER DATED 16.10.2008. THE AO NOTED THAT ASSESSEE HAS CLAIMED EXPENDITURE ON ACCOUNT OF DEPRECIATION OF RS. 1,05,12, 224/- FOR THE ASSESSMENT YEAR 2010-11; AND RS. 1,26,75,940/- FOR T HE ASSESSMENT YEAR 2011-12. ACCORDING TO THE AO THE ASSESSEE IS CL AIMING DEPRECIATION AND CAPITAL EXPENDITURE BOTH AS OF APPLIC ATION OF INCOME AND THEREFORE, IT AMOUNTS TO DOUBLE DEDUCTION. AFTER REF ERRING TO THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF E SCORTS LTD. VS UNION OF INDIA 199 ITR 43, HE DISALLOWED THE CLAIM O F DEPRECIATION. HE FURTHER HELD THAT THE PROVISION OF SECTION 11 R.W.S 12 AND 13 DO NOT ENVISAGE SET OFF OF DEFICIT/EXCESS EXPENDITURE OF EAR LIER ASSESSMENT YEARS AND ACCORDINGLY, HE DISALLOWED THE SET OFF OF L OSS OF EARLIER DEFICIT WITH CURRENT YEAR INCOME. 3. BEFORE THE LD. CIT (A), THE ASSESSEE RELIED U PON THE FOLLOWING DECISIONS OF ALLOWABILITY OF DEPRECIATION:- 1) CIT VS. MARKET COMMITTEE, PIPLI, 330 ITR 16 (2011) (P&H); 2) CIT VS. RAJPUR PALLOTTINE SOCIETY, 180 ITR 579 (198 9)(MP); 3) CIT VS. RAO BAHADUR CALAVALA CNNAN CHETTY CHARITIES , 135 ITR 198 (1982) (MAD); 4) CIT VS. SHETH MANILAL RANCHHODDAS VISHRAM BHAVAN TR UST, 1198 ITR 598 (1992) (GUJ). 5) CIT VS. SOCIETY OF THE SISTERS OF ST. ANNE, 146 ITR 28 (1984) (KARN). 6) CIT VS. INSTITUTE OF BANKING, 264 ITR 110 (2003) (B OM). 4 7) CIT VS. TINY TOTS EDUCATION SOCIETY, 330 ITR 21 (20 11)(P & H) 8) CIT VS. SHETH MANILAL RANCHHODDAS VISHRAM BHAVAN TR UST, 1198 ITR 598 (1992) (GUJ) 9) CIT VS. SOCIETY OF THE SISTERS OF ST. ANNE, 146 ITR 28 (1984)(KARN) 10) CIT VS. INSTITUTE OF BANKING, 264 ITR 110 (200 3) (BOM) 11) CIT VS. TINY TOTS EDUCATION SOCIETY, 330 ITR 21 (2011) (P & H). HEAVY RELIANCE WAS ALSO PLACED ON THE JUDGMENT OF HON BLE DELHI HIGH COURT IN THE CASE OF DIT (EXEMPTION) VS. INDRAPRASTHA CANCER SOCIETY IN ITA NOS. 240,348,406,463 & 464/2014 ORDE R DATED 18.11.2014. LD. CIT (A), THOUGH ALLOWED ASSESSEES CLAIM, HOWEVE R HELD THAT IT IS NOT CORRECT, BUT SINCE THERE IS A JURISDIC TIONAL HIGH COURT JUDGMENTS, THEREFORE, HE IS FOLLOWING THE SAME. 4. IN SO FAR AS SET OFF OF CARRIED FORWARD OF L OSSES AND DEFICIT ADJUSTMENT WITH THE CURRENT YEAR THE RELIANCE WAS PLACED ON FOLLOWING DECISIONS:- I) CIT VS. MAHARANA OF MEWAR CHARITABLE FOUNDATION, 16 4 ITR 439 (RAJ) 1987 II) CIT VS. SHRI PLOT SWETAMABER MURTI PUJAK JAIN MANDA L, 211 ITR 293 (GUJ) 1995 III) CIT VS. MATRISEWA TRUST, 242 ITR 20(MAD) 2000 IV) GOVINDU NAICKER ESTATE VS. ADIT, 248 110 (BOM)2003 V) CIT VS INSTITUTE OF BANKING , 264 ITR 110 (BOM)200 3 VI) DIT VS. RAGHUVANSHI CHARITABLE TRSUT, 197 TAXMANN 170 (DELHI) 2011 VII) CIT VS. GUJARAT SAMAJ, 349 ITR 559 (MP)2012 5 5. LD. CIT (A) FOLLOWING THE PRECEDENCE OF VARIO US JURISDICTIONAL HIGH COURT DIRECTED THE AO TO ALLOW THE BENEFIT OF CARRY FORW ARD OF THE DEFICIT OR LOSS. 6. AFTER HEARING LD. DR AND ON PERUSAL OF THE IMPUGNED ORDER WE FIND THAT, SINCE THE ISSUES RAISED IN THE GROUNDS OF APPEAL ARE SQUARELY COVERED BY THE JUDGEMENT OF HONBLE JURISDICTIONAL H IGH COURT AND OTHER HIGH COURTS WHICH HAS BEEN FOLLOWED BY THE LD. CIT (A), THEREFORE, WE DO NOT FIND ANY MERITS IN THE GROUNDS RAI SED BY THE DEPARTMENT AND ACCORDINGLY THE ASSESSEES CURRENT CLA IM IS ALLOWED WHICH IS IN LYING WITH THE JUDICIAL PRECEDENCE OF THE AFORESAID HIGH COURT JUDGMENTS. 7. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH JUNE, 2018. SD/- SD/- (L.P. SAHU) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 27 /06 /2018 VEENA COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI