The ITO, (Exemptions), Ward-2, Ahmedabad V. Shree Saurashtra Patel Kelavani Mandal, Ahmedabad

ITA 2660/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7961 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 18-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMIT KUMAR VARMA
• Keywords: Capital asset; Depreciation; Charitable institution

Judgement Text

ITA NO S . 2659 & 2660 /AHD/2015 A.Y. 20 12 - 13 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH, AHMEDABAD BEFORE SHRI N.K. BILLAIYA , ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD , JUDICIAL MEMBER I TA NO. 2 659 /AHD /201 5 ASSESSMENT YEAR: 20 12 - 13 INCOME TAX OFFICER (EXEMPTIONS), VS. SHREE UTTH AN SEWA TRUST, WARD 2, AHMEDABAD. 313 - 314, AKSHAR COMPLEX, NEAR JODHPUR CROSS ROAD, SATELLITE, AHMEDABAD 380 015. [PAN A A A TU 1815 H ] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUMIT KUMAR VARMA, SR. D.R. RE SPONDENT BY : SHRI JIGNESH PARIKH, A.R. I TA NO. 26 60 /AHD /201 5 ASSESSMENT YEAR: 2012 - 13 INCOME TAX OFFICER (EXEMPTIONS), VS. SHREE SAURASHTRA PATEL KELAVANI WARD 2, AHMEDABAD. MANDAL, GULBAI TEKRA, ELLISBRIDGE, AHMEDABAD. 380 0 06 . [PAN A A BTS 1704 Q ] (APPELLANT ) (RESPONDENT) APPELLANT BY : SHRI S UMIT KUMAR, SR. D.R. RESPONDENT BY : SHRI TUSHAR HEMANI, A.R. DATE OF HEARING : 30 . 11 . 20 17 DATE OF PRONOUNCEMENT : 13 . 12 .2017 O R D E R PER N.K. BILLAIYA, ACCOUNTANT MEMBER TH ESE ARE SEPARATE APPEALS BY THE REVENUE PREFERRED AGAINST TWO SEPARATE ORDER S OF THE CIT(A) - 9, AHMEDABAD IN RESPECT OF TWO DIFFERENT ASSESSEES . 2. SINCE THE ISSUES RAISED BY THE REVENUE ARE IDENTICAL IN BOTH THESE APPE ALS, BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER, FOR THE SAKE OF CONVENIENCE AND BREVITY. ITA NO S . 2659 & 2660 /AHD/2015 A.Y. 20 12 - 13 PAGE 2 OF 4 3. THE COMMON GRIEVANCE IN BOTH THESE APPEALS RELATE TO DELETION OF ADDITION OF DISALLOWANCE OF DEPR E CIATION MADE BY THE ASSESS ING OFFICER. 4. BOTH THE ASSESSEE S ARE CHARITABLE TRUST ENGAGED IN IMPARTING EDUCATION. WHILE SCRUTINISING THE RETURN OF INCOME, THE ASS ESSING OFFICER NOTICED THAT THE ASSESSEE HAS CLAIMED DEPRECIATION ON ASSETS. THE ASSESSING OFFICER WAS OF THE FIRM BELIEF THAT SINCE THE PURCHASE OF ASSETS HAVE BEEN ALLOWED AS APPLICATION OF FUND, CLAIM OF DEPRECIATION WOULD AMOUNT TO DOUBLE DEDUCTION AND ACCORDINGLY DEPRECIATION WAS DISALLOWED. 5. AFTER GIVING A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORIT IES BELOW, WE FIND THAT IDENTICAL ISSUE W A S CONSIDERED BY THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE C A SE OF ACIT VS. UDHNA ACADEMY EDUCATION TRUST I N ITA N OS . 600 & 601/AHD/2014 VIDE ORDER DATED 20.09.2016 . THE RELEVANT FINDINGS OF THE CO - O R DINATE BENC H READ AS UNDER : - 5. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ISSUE IN QUESTION IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF TRIBUNAL IN THE CASE OF ACIT VS. INSTITUTE OF PLASMA RESEARCH IN ITA NO.1506/AHD/2009 DATED 21.02.2011, HO LDING AS UNDER: - 5.1 IN THE CONTEXT OF ISSUE BEFORE US, HON'BLE JURISDICTIONAL HIGH COURT IN CIT V. SHETH MANILAL RAN CHHODDAS VISHRAM BHAVAN TRUST , 198 ITR 598(GUJ) HELD AS UNDER: WHETHER DEPRECIATION HAS TO BE ALLOWED AS A NECESSARY DEDUCTION FOR COMPUTING THE INCOME OF A CHARITABLE INSTITUTION WAS THE QUESTION WHICH CAME UP BEFORE THE KARNATAKA HIGH COURT IN CIT V. SOCIETY OF THE SISTERS OF ST. ANNIE (1 984] 146 ITR 28. NOTICING THE DIFFERENCE BETWEEN THE WORD ' INCOME ' AND THE EXPRESSION ' TOTAL INCOME ' AND THE NECESSITY FOR PROVIDING DEPRECIATION IN ORDER TO MAINTAIN CORRECT ACCOUNTS, THE HIGH COURT HELD THAT THE AMOUNT OF DEPRECIATION DEBITED TO THE ACCOUNTS OF THE CHARITABLE INSTITUTION HAS TO BE DEDUCTED TO ARRIVE AT THE INCOME AVAILABLE FOR APPLICATION TO CHARITABLE AND RELIGIOUS PURPOSES. SAME VIEW HAS BEEN TAKEN BY THE MADHYA PRADESH HIGH COURT IN CIT V. RAIPUR PALLOTTINE SOCIETY [1989] 180 ITR 579. IN CIT .V RAO BAHADUR CALAVALA CUNNAN CHETTY CHARITIES [1982] 135 ITR 485, THE MADRAS HIGH COURT WAS REQUIRED TO CONSIDER WHETHER, FOR THE PURPOSE OF COMPUTING ACCUMULATION IN EXCESS OF 25 PER CENT A S LAID DOWN IN SECTION 11(1)(A) OF THE ITA NO S . 2659 & 2660 /AHD/2015 A.Y. 20 12 - 13 PAGE 3 OF 4 ACT, ' INCOME ' HAS TO BE COMPUTED UNDER THE VARIOUS HEADS ENUMERATED IN THE INCOME - TAX ACT . IT HELD THAT THE INCOM E FROM THE PROPERTIES HELD UNDER TRUST WOULD HAVE TO BE ARRIVED AT IN THE NORMAL COMMERCIAL MANNER WITHOUT CLASSIFICATION UNDER THE VARIOUS HEADS SET OUT IN SECTION 14 . IT HELD THAT THE EXPRESSION ' INCOME HAS TO BE UNDERSTOOD IN THE POPULAR OR GENERAL SENSE AND NOT IN THE SENSE IN WHICH THE INCOME IS ARRIVED AT FOR THE PURPOSE OF ASSESSMENT TO TAX BY APPLICATION OF SOME ARTIFICIAL PROVISIONS EITHER GIVING OR DENYING DEDUCTION. IT OBSERVED THAT THE COMPUTAT ION UNDER THE DIFFERENT CATEGORIES OR HEADS ARISES ONLY FOR THE PURPOSES OF ASCERTAINING THE TOTAL INCOME FOR THE PURPOSES OF CHARGE. THOSE PROVISIONS CANNOT BE INTRODUCED TO FIND OUT WHAT THE INCOME DERIVED FROM THE PROPERTY HELD UNDER TRUST TO BE EXCLUDE D FROM THE TOTAL INCOME IS, FOR THE PURPOSE OF THE EXEMPTIONS UNDER CHAPTER III. WE ARE IN RESPECTFUL AGREEMENT WITH THE VIEW TAKEN BY THE KARNATAKA, MADHYA PRADESH AND MADRAS HIGH COURTS. WE, THEREFORE, ANSWER BOTH THE QUESTIONS REFERRED TO US IN THE AFF IRMATIVE AND AGAINST THE REVENUE. NO ORDER AS TO COSTS 5.2 SIMILAR VIEW HAS BEEN TAKEN BY HON'BLE PUNJAB AND HARYANA HIGH COURT IN CIT VS. MARKET COMMITTEE, PIPLI [2010] 45 DTR (P&H) 381 WHEN IT WAS HELD THAT DEPRECIATION IS ALLOWABLE ON CAPITAL ASSETS FROM THE INCOME OF CHARITABLE TRUST FOR DETERMINING THE QUANTUM OF FUND WHICH HAVE TO BE APPLIED FOR THE PURPOSES OF THE TRUST IN TERMS OF SECTION 11 . 5. 3 IN THE LIGHT OF VIEW TAKEN IN THE AFORECITED DECISIONS, ESPECIALLY WHEN THE REVENUE HAVE NOT PLACED BEFORE US EITHER ANY CONTRARY DECISION NOR ANY OTHER MATERIAL SO AS TO ENABLE US TO TAKE A DIFFERENT VIEW IN THE MATTER, WE ARE NOT INCLINED TO INTERFERE. THEREFORE, GROUND NO.1 IN THE APPEAL IS DISMISSED. 5.1. IT IS FURTHER CONTENDED THAT THIS POSITION HAS BEEN ACCEPTED BY LEGISLATURE AND WITH EFFECT FROM 01.04.2015 BY AMENDMENT U/S 11(6) BY FINANCE ACT, 2015, THE DOUBLE CLAIM OF DEPRECIATION HAS BEEN BA RRED WITH EFFECT FROM 01.04.2015. THUS, UP TO 31.03.2014, THE ASSETS OF THE TRUST, ACQUIRED BY APPLICATION OF INCOME, ARE ELIGIBLE FOR CLAIM OF DEPRECIATION. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIAL PLACED BEFORE US AND GONE THROUGH THE O RDERS OF THE AUTHORITIES BELOW. RESPECTFULLY FOLLOWING THE ITAT JUDGMENT IN THE CASE OF INSTITUTE OF PLASMA RESEARCH (SUPRA), RELYING ON JUDGMENT OF HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SHETH MANILAL RAN CHHODDAS VISHRAM BHAVAN TRUST (SUPRA) AND THE AMENDMENT U/S 11(6) BY FINANCE ACT, 2015 WITH EFFECT FROM 01.04.2015, WE UPHOLD THE ORDER OF LD. CIT(A). THUS, BOTH THE REVENUE S APPEALS ARE DISMISSED. ITA NO S . 2659 & 2660 /AHD/2015 A.Y. 20 12 - 13 PAGE 4 OF 4 7. IN THE RESULT, REVENUE S APPEALS AND ASSESSEE S CROSS - OBJECTION ARE DISMISSED. 6. AS NO DISTINGUISHING DECISION HAS BEEN BROUGHT ON RECORD BY THE REVENUE, RESPECTFULLY FOLLOWING THE FINDINGS OF THE CO - ORDINATE BENCH (SUPRA), WE DECLINE TO INTERFERE I N THE MATTER. BOTH THE APPEALS BY REVENUE ARE ACCORDINGLY DISMISSED. 7. IN THE RESULT, BOTH THE APPEALS ARE DISMISSED. ( OR DER PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF DECEMBER , 2017 ) SD/ - SD/ - MAHAVIR PRASAD N.K. BILLAIYA ( JUDICIAL MEMBER) ( ACCOUNTANT MEMBER) AHMEDABAD, THE 13 TH DAY OF DECEMBER , 201 7 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER E COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD