ADIT (E), New Delhi V. Raghuvanshi Charitable Trust, New Delhi

ITA 2809/DEL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3636 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 03-04-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 06-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Depreciation; Charitable institution; Capital expenditure
• Section: 143(3); 12A; 12

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI H.S.SIDHU , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 2809 /DEL/201 4 (ASSESSMENT YEAR: 2006 - 07) ADIT ( E ), INV CIRCLE - II, NEW DELHI VS. RAGHUVANSHI CHARITABLE TRUST, 105, RAKESH DEEP BUILDING, 11, COMMERCIAL COMPLEX, GULMOHAR ENCLAVE, NEW DELHI PAN:AAATR0568G (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY: NONE DATE OF HEARING 03/04/ 2017 DATE OF PRONOUNCEMENT 03 /04/2017 O R D E R PER PRASHANT MAHARISHI, A. M. 1. THIS APPEAL IS PREFERRED BY REVENUE AGAINST THE ORDER OF THE LD CIT(A) - XXI, NEW DELHI RAISING FOLLOWING TWO GROUNDS OF APPEAL : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT( A) HAS ERRED IN ALLOWING DEPRECATION OF RS. 3402284/ - IGNORING THE FACT THAT WHERE THE CAPITAL EXPENDITURE HAS BEEN TREATED TO HAVE BEEN APPLIED FOR THE OBJECT OF THE TRUST, ALLOWANCE OF DEDUCTION ON ACCOUNT OF DEPRECIATION WILL AMOUNT TO DOUBLE DEDUCTION . 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD C(T)A HAS ERRED IN DIRECTING TO ALLOW BENEFIT OF CARRY FORWARD OF DEFICIT/ LOSS OF RS. 11104266/ - IGNORING THE FACT THAT THERE IS NO SPECIFIC PROVISIONS U/S 11, 12 AND 13 FOR ALLOWI NG THE CARRY FORWARD OR ADJUSTMENT OF DEFICIT OR LOSS. 2. DESPITE SERVICE OF NOTICE TO THE ASSESSEE THROUGH DEPARTMENTAL REPRESENTATIVE, WHICH WAS RECEIVED ON 17.02.2017 WHEREBY THE DATE OF HEARING OF 03.04.2017 WAS INTIMATED TO THE ASSESSEE, NONE APPEARED BEFORE US. AS THE NOTICE IS SERVED THROUGH REVENUE IT WOULD ALSO NOW BE IMPRACTICABLE TO SERVE THE NOTICE ONCE AGAIN TO THE ASSESSEE. FURTHER, ON THE EARLIER DATE FIXED FOR HEARING ON 12.01.2017 THE ASSESSEE DID NOT COME FORWARD TO REPRESENT ITS CASE. THER EFORE, NOW IT IS IMPRACTICABLE TO AGAIN SERVE THE NOTICE TO THE ASSESSEE AND THEREFORE, THE APPEAL IS DECIDED ON MERITS OF THE CASE IN ABSENCE OF ANY REPRESENTATION FROM THE ASSESSEE. 3. ON BEHALF OF THE REVENUE ALSO NONE APPEARED. 4. THE BRIEF FACTS OF THE CA SE IS THAT THE ASSESSEE IS A CHARITABLE TRUST REGISTERED U/S 12A OF THE INCOME TAX ACT, 1961 FILED ITS RETURN OF INCOME ON 20.09.2010 DECLARING NIL INCOME. THE ASSESSEE ALSO FILED AUDIT REPORT DATED 18.09.2010. THE ASSESSEE IS RUNNING A SCHOOL AND HAS CLAI MED DEPRECIATION ON CAPITAL ASSET AND FURTHER, WHEN THE ADDITIONS WERE MADE TO THE FIXED ASSETS IT ALSO CLAIMED IT AS APPLICATION OF INCOME. THEREFORE, ACCORDING TO THE LD ASSESSING OFFICER IT AMOUNTED TO DOUBLE DEDUCTION AND HENCE, DISALLOWED DEPRECIATION OF RS. 3402284/ - . THEREFORE, ASSESSMENT U/S 143(3) OF THE ACT WAS FRAMED ON 31.12.2012 WHEREIN, DEFICIT OF RS. 7701982/ - WAS DETERMINED AND LD ASSESSING OFFICER DID NOT ALLOW THE SAME TO BE CARRIED FORWARD. THE ASSESSEE AGGRIEVED WITH THE ASSESSMENT ORDER PREFERRED APPEAL BEFORE THE LD CIT(A), WHO DELETED THE DISALLOWANCE OF DEPRECIATION RELYING UPON VARIOUS JUDICIAL PRECEDENTS. WITH RESPECT TO DISALLOWANCE OF CARRY FORWARD OF DEFICIT, HE RELYING UPON THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 2002 - 03 DE CIDED BY THE COORDINATE BENCH AND FURTHER, THE ORDER OF THE HON'BLE HIGH COURT NOT ADMITTING THE APPEAL OF THE REVENUE ON THAT ISSUE, ALLOWED THE DEFICIT TO BE CARRIED FORWARD. REVENUE AGGRIEVED BY THE ORDER OF LD CIT(A), PREFERRED APPEAL BEFORE US. 5. ON TH E FIRST GROUND OF APPEAL THE LD CIT(A) HAS ALLOWED THE DEPRECIATION CLAIM OF THE ASSESSEE RELYING ON THE DECISION OF HON'BLE BOMBAY HIGH COURT IN 264 ITR 110 AND HON'BLE PUNJAB AND HARYANA HIGH COURT IN 330 ITR 16 AND HON'BLE DELHI HIGH COURT IN DIT VS.VIS WA JAGRUTI MISSION ITA NO. 140/2012. THE CASE OF THE ASSESSEE FURTHER GETS SUPPORT FROM THE INSERTION OF SECTION 11(6) W.E.F. 01.04.2015 BY FINANCE (NO.2 ) ACT, 2014 WHICH NOW PROHIBITS THE CLAIM OF THE DEPRECIATION IN RESPECT OF ASSETS ACQUISITION OF WHICH HAS BEEN CLAIMED AS AN APPLICATION OF INCOME. THE CASE OF THE ASSESSEE IS PERTAINING TO AY 2010 - 11 TO WHICH THE ABOVE PROVISION DO NOT APPLY. IN VIEW OF THIS GROUND NO. 1 OF THE APPEAL OF THE REVENUE IS DISMISSED. 6. GROUND NO. 2 OF THE APPEAL OF THE REVENUE IS AGAINST THE REFUSAL TO CARRY FORWARD DEFICIT OF RS. 7701982/ - . THE LD CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE BASED ON THE DECISION OF THE COOR DINATE BENCH IN THE ASSESSEES OWN CASE FOR AY 2002 - 03 IN ITA NO. 217/DEL/2006 DATED 11.01.2007 WHICH HAS BEEN UPHELD BY THE HON'BLE HIGH COURT VIDE ORDER DATED 27.07.2010 IN ITA NO. 1075/2008. IN VIEW OF THIS WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF T HE LD CIT(A) IN ALLOWING CARRY FORWARD OF THE DEFICIT. IN THE RESULT GROUND NO. 2 OF THE APPEAL OF THE REVENUE IS ALSO DISMISSED. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. THE ORDER IS PRONOUNCED ON 03 RD APRIL, 2017 . - SD/ - - SD/ - ( H.S.SIDHU ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 03 / 04 /2017 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI