SRI AUROBINDO UDYOG, PONDICHERRY V. DCIT(EXEMPTIONS), CHENNAI

ITA 267/CHNY/2021

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 6515 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-08-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 22-07-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Principle of natural justice
• Section: 80G; 12AA

Judgement Text

आयकर अपीलीय अिधकरण ‘ए’ ायपीठ चे ई म । IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI माननीय +ी मनोज कु मार अ/वाल ,लेखा सद4 एवं माननीय +ी संजय शमा7, ाियक सद4 के सम8। BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM AND HON’BLE SHRI SONJOY SARMA, JUDICIAL MEMBER आयकर अपील सं./ ITA No.267/Chny/2021 (िनधा7रण वष7 / Assessment Year: 2015-16) Sri Aurobindo Udyog Trust, No.3 & 5 Rue Dupuy Pondicherry, Pondicherry – 605 001. बनाम/ V s. DCIT (Exemptions) Chennai Circle, Chennai. थायी लेखा सं./जीआइ आर सं./P AN /GI R No . AAB TS -0 1 1 7 - K (अ पीलाथ /Appellant) : ( थ / Respondent) अपीलाथ की ओरसे/ Appellant by : Shri Vijay Narayanan (ACA) – Ld. AR थ की ओरसे/Respondent by : Shri ARV. Sreenivasan (Addl.CIT) – Ld. DR सुनवाई की तारीख/Date of Hearing : 16-08-2022 घोषणा की तारीख /Date of Pronouncement : 16-08-2022 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2015-16 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 26-05-2021 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s.143(3) of the Act on 11-12-2017. The grounds taken by the assessee are as under: 1) The order passed by the CIT(A), National Faceless Appeal Centre is against facts of the case and the interests of natural justice. 2) Depreciation: ITA No.267/Chny/2021 - 2 - 2.1) The CIT(A) erred in concluding that no depreciation can be claimed on assets purchased up to AY 2014-15 as the same have been claimed by appellant as application of income. 2.2) It is submitted that the appellant has been denied exemption u/s 11 since AY 2009-10. Consequently, it is entitled to deprecation on assets acquired from AY 2009-10 onwards. 2.3) The CIT(A) also erred in deciding that appellant should file an application u/s 154 of the Act without appreciating that an appellate remedy can lie concurrently with rectification proceedings. 3) Deduction u/s 80G: 3.1) The CIT(A) erred in dismissing the appeal in respect of donation paid to Sri Aurobindo Ashram Trust, Rs.5,00,000/-, on the ground that it had not substantiated the claim and not shown why the deduction was allowable. 3.2) The appellant had submitted the donation receipt dt 28-3-15 issued by the donee during the appellate proceedings. It is not understood what further substantiation is required. 4) Tax rate: 4.1) The CIT(A) erred in levying tax on the computed income at a flat rate of 30%. 4.2) It is submitted that even if there is any income chargeable, same would suffer tax as is applicable to individuals and not at a flat rate as above. 5) Prayer: For these and such other grounds as may be adduced at the time of hearing, the appellant prays that: a) It be allowed depreciation on assets purchased from AY 2009-10 onwards; b) Deduction u/s 80G be granted on the donation of Rs 5,00,000/-; and c) In the event any taxable income is determined, the same is to be taxed at rates applicable to individuals. 2. As evident, three issues arises out of the impugned order i.e., i) Depreciation on assets; ii) Deduction of donation paid to a trust iii) Applicable rate of tax. Having heard rival submissions, the appeal is disposed-off as under. 3. The assessee is registered u/s. 12AA of the Act. However, the assessee conceded that the trust income has to be assessed as business income ignoring the claim u/s 11 as held in first appellate order of earlier years. The exemption was denied to the assessee u/s 11 since AY 2009-10 onwards in terms of proviso to Sec.2(15). Considering the same, Ld. AO determined the income of the assessee ITA No.267/Chny/2021 - 3 - @Rs.1.39 Lacs and computed tax on the same. In the process, the depreciation of Rs.27.75 Lacs was allowed to the assessee. 4. During appellate proceedings, the assessee, inter-alia, submitted that it would be entitled for depreciation of Rs.42.90 Lacs in respect of assets purchased from AY 2009-10 onwards. The same was rejected by Ld. CIT(A) on the ground that the purchase of asset was claimed as an application of income. The assessee sought deduction u/s 80G with respect to donation of Rs.5 Lacs which was also rejected since the claim could not be substantiated. Another submission was that the rate of tax as applicable to Association of Persons (AOP) would apply which was also rejected since the assessee was a trust and not an AOP. 5. The plea of Ld. AO is that in terms of appellate order for AY 2014- 15, the assessee would be entitled for depreciation as under: - Total Depreciation claimed by units 40,17,691 Depreciation of the HO 7,42,649 Total Depreciation claimed by appellant (consolidated) 47,60,340 Depreciation allowed in the assessment order dated 11.12.2017 27,75,551 Therefore disallowed 19,84,789 Correct Depreciation to be allowed in respect of asset additions from AY 2009-10 onwards (computation attached) 42,90,085 Balance Depreciation claim – issue in this appeal (42,90,085-27,75,551) 15,14,534 The Ld. AR submitted that the first appellate order for AY 2014-15 has attained finality. Upon perusal of this order, we find that depreciation has been allowed to the assessee considering the decision of Hon’ble Supreme Court in CIT V/s Rajasthan & Gujarati Charitable foundation Poona (89 Taxmann.com 127). So far as the amendment introduced by way of insertion of Sec.11(6) w.e.f. 01.04.2015 is concerned, we find that the assessee has been denied exemption ITA No.267/Chny/2021 - 4 - since 2009-10 onwards and it is claiming depreciation on fixed assets acquired thereafter. Therefore, the assessee is entitled to claim the deprecation allowance for assets acquired after 2009-10. The Ld. AO is directed to verify the depreciation claim of the assessee and allow the deduction of the same as allowable. 6. The Ld. AR has placed on record documents in support of claim u/s 80G. The Ld. AO is directed to grant the applicable deduction after due verification. So far as the rate of tax is concerned, the same shall be levied in accordance with law as applicable to the status of the assessee in which it has been assessed. 7. The appeal stand allowed for statistical purposes. Order pronounced on 16 th August, 2022. Sd/- (SONJOY SARMA) ाियक सद4 /JUDICIAL MEMBER Sd/- (MANOJ KUMAR AGGARWAL) लेखा सद4 / ACCOUNTANT MEMBER चे+ई / Chennai; िदनांक / Dated : 16-08-2022 EDN/- आदेश की Sितिलिप अ /ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. यथ /Respondent 3. आयकर आयु (अपील)/CIT(A) 4. आयकर आयु /CIT 5. िवभागीय ितिनिध/DR 6. गाड फाईल/GF