ACIT (OSD)(Exemption), Wrad-2, Ahmedabad V. Taleem Research Foundation, Ahmedabad

ITA 2653/AHD/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2332 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 30-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J BHANSALI
• Keywords: Depreciation; Charitable institution; Capital expenditure
• Section: 11; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHR I AMARJIT SINGH , ACCOUNTANT MEMBER AND MS. MADHUMITA ROY , JUDICIAL MEMBER ASSTT. CIT (OSD)(EXEMPTION), WARD - 2, AHMEDABAD (APPELLANT) VS TALEEM RESEARCH FOUNDATION, 1 ST FLOOR, CITY PLAZA, BOPAL STERLING CITY, BOPAL, AHMEDABAD - 380058 PAN: AAATT3879L (RESPONDENT) REVENUE BY : S H RI MUD IT NAGPAL , SR. D . R. ASSESSEE BY: SHRI J. BHANSALI, A.R. DATE OF HEARING : 05 - 03 - 2 019 DATE OF PRONOUNCEMENT : 07 - 03 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCO UNTANT MEMBER : - THIS REVENUE S APPEAL FOR A.Y. 2014 - 15 , ARI SES FROM ORDER OF THE CIT(A) - 4, AHMEDABAD DATED 20 - 09 - 2 017 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE SOLITARY GROUND OF APPEAL OF THE REVENUE IS AGAINST THE DECISION OF LD. CIT(A) IN ALLOWING THE DEPRECIATION OF RS. 3,44,19,962/ - TO THE ASSESSEE I T A NO . 2653 / A HD/20 17 A SS ESSMENT YEAR 2014 - 15 I.T.A NO. 2653 /AHD/20 1 7 A.Y. 2014 - 15 PAGE NO ACIT (OSD)(E) VS. TALEEM RESEARCH FOUNDATION 2 WHICH AMOUNTS TO DOUBLE DEDUCTION AS 100% DEDUCTION WAS ALLOWED TO THE ASSESSEE AS APPLICATION OF INCOME. 3. THE ISSUE IN APPEAL IS PERTAINED TO THE CLAIM OF DEPRECIATION WHICH WAS DISALLOWED BY THE ASSESSING OFFICER ON THE GROUND THAT APPLICATION OF THE INCOME WAS ALREADY ALLOWED AS EXPENDITURE IN THE EARLIER ASSESSMENT YEARS AS APPLICATION OF FUNDS, THEREFORE, ALLOWING DEPRECIATION WOULD AMOUNT TO D OUBLE DEDUCTION. AT THE TIME OF HEARING BEFORE US, LD. REPRESENTATIVES HAVE BROUGHT TO OUR NOTICE THAT THE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE BY STATING THAT THE ISSUE ON ALLOWABILITY OF DEPRECIATION IN THE CASE OF CHARITABLE TRUST HAS BEEN DECIDED BY THE HON BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SHETH MANILAL RANCHHODDAS VISHRAM BHAVAN TRUST 198 ITR 598 (G UJ). 4 . WE HAVE HEARD THE RIVAL CONTE NTIONS AND PERUSED THE MATERIAL ON RECORD CAREFULLY. THE ASSESSMENT U/S. 143(3) OF T HE ACT WAS COMPLETED BY DETERMINING INCOME AT NIL IN THE CASE OF THE ASSESSEE AND THE CLAIM OF DEPRECIATION OF RS. 3,44,19,962 / - WAS DISALLOWED ON THE GROUND THAT THE CAPITAL EXPENDITURE INCURRED ON THE FIXED ASSETS HAD BEEN ALLOWED AS AN EXPENDITURE IN THE EARLIER YEARS AS APPRECIATION OF FUNDS. THE LD. CIT(A) HAS ALLOWED THE CLAIM OF DEPRECIATION AFTER PLACING RELIANCE ON THE DECISION OF HON BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SHETH MANILAL RANCHHODDAS VISHRAM BHAVAN TRUST 198 ITR 598 (GUJ) AND THE DECISION OF THE CO - ORDINATE BENCH OF THE ITAT AHMEDABAD IN THE CASE OF SARDAR PATEL INSTITUTE OF PUBLIC ADMINISTRATION ASSESSMENT YEAR 2008 - 09 VIDE ITA NO. 1322/AHD/2011. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, IT I.T.A NO. 2653 /AHD/20 1 7 A.Y. 2014 - 15 PAGE NO ACIT (OSD)(E) VS. TALEEM RESEARCH FOUNDATION 3 WAS BROUGHT TO OUR NOTICE BY THE LD. COUNSEL THAT HON BLE SUPREME COURT IN THE DECISION OF CIT - III, PUNE VS. RAJASTHAN AND GUJARAT CHARITABLE FOUNDATION POONA VIDE (2018) 89 TAXMANN.COM 127 HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLO WING THE DECISION OF HON BLE BOMBAY HIGH COURT IN CIT VS. INSTITUTE OF BANKING PERSONNEL SELECTION (IBPS) (2003) 131 TAXMAN 386 (BOMBAY). IT WAS HELD BY THE HON BLE BOMBAY HIGH COURT THAT THE INCOME OF THE TRUST IS REQUIRED TO BE COMPUTED UNDER SECTION 11 ON COMMERCIAL PRINCIPLES AFTER PROVIDING FOR ALLOWANCE FOR NORMAL DEPRECIATION AND DEDUCTION THEREOF FROM GROSS INCOME OF THE TRUST. IN VIEW OF THE ABOVE FACTS AND JUDICIAL FINDINGS, WE DO NOT FIND ANY REASON TO INTERFERE IN THE DECISION OF LD. CIT(A). THEREFORE, THE APPEAL OF THE RE VENUE IS DISMISSED . 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 07 - 03 - 201 9 SD/ - SD/ - ( MADHUMITA ROY ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 07 /03 /2019 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. I.T.A NO. 2653 /AHD/20 1 7 A.Y. 2014 - 15 PAGE NO ACIT (OSD)(E) VS. TALEEM RESEARCH FOUNDATION 4 BY ORDER/ , / ,