DY COMMISSIONER OF INCOME TAX (EXEMPTION)-1(1), MUMBAI V. KOHINOOR EDUCATION TRUST, MUMBAI

ITA 2901/MUM/2022

AI Insights

The case involves the Dy. Commissioner of Income Tax (Exemption)-1(1), Mumbai as the appellant and Kohinoor Education Trust as the respondent. The core issue was whether the assessee was justified in claiming depreciation on assets while also claiming these assets as application of funds, which was contested by the Revenue based on the amended provisions of Section 11(6) of the Income Tax Act, 1961. The CIT(A) had allowed the depreciation claim, which the Revenue appealed against, arguing that the assessee had effectively claimed double benefits. The tribunal examined the submissions and the legal provisions, ultimately dismissing the Revenue's appeal and upholding the CIT(A)'s decision.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132754 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 02-01-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 14-11-2022
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Corroborative evidences

Judgement Text

आयकर य कर म ु ंबई ठ “ एच”, म ु ंबई ठ क , य यक य ए ं गगन गोय , ेख क र य के म% IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “ H ”, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI GAGAN GOYAL, ACCOUNTANT MEMBER आ ं. 2901/म ु ं/ 2022 ( न. . 2015-16) ITA NO. 2901/MUM/2022(A.Y.2015-16) Dy. Commissioner of Income Tax (Exemption)-1(1), Mumbai Room No.607, 6 th Floor, MTNL Building, Cumballa Hill, Mumbai 400 026. ...... + /Appellant बन म Vs. Kohinoor Education Trust, 1 Kohinoor Corporation Office, Senapati Bapat Marg, Dadar West, Mumbai 400028. PAN:AABTK-2616-D ..... , - /Respondent + . र / Appellant by : Smt. Madhumalti Ghosh , - . र /Respondent by : Shri Jayesh Dadia ु न ई क/ - / Date of hearing : 03/01/2023 0ो1 क/ - / Date of pronouncement : 13/01/2023 आदेश/ ORDER PER VIKAS AWASTHY, JM: This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’ ]dated 21/09/2022 for the Assessment Year 2015-16. 2. The Revenue in appeal has raised following grounds: 2 ITA NO. 2901/MUM/2022(A.Y.2015-16) “1. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) was justified in allowing the claim of depreciation of the assessee without appreciating the fact that no supporting evidences has been provided to prove that the cost of such assets has been claimed as application of income for the year?" 2. "Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) was justified in allowing the claim of depreciation to the assessee without appreciating the fact that as per Section 11(6) of the Income-tax Act, 1961, the acquisition of any asset has been claimed as an application of income in any previous year, no deduction or allowance for depreciation in respect to that asset would be allowable. 3. Whether on the facts and in the circumstances of the case and in law, the Ld. CTA) was justified in relying upon the judgment of Ld. CIT(A) in the assessee's own case for AY 2013-14 without appreciating the fact that the same are not applicable for AY 2015-16 in light of the provisions of amended Section 11(6) of the Income tax Act?” 3. Smt. Madhumalti Ghosh representing the Department submits that the assessee Trust has claimed investment in assets as application of funds and has also claimed depreciation on the said assets. Thus, the assessee has claimed double benefit. The provisions of section 11(6) of the Income Tax Act, 1961 [in short ‘the Act’] have been amended w.e.f. Assessment Year 2015-16. The amended provisions does not permit the assessee to claim benefit of depreciation as well as investment in assets as application of funds. The ld. Departmental Representative further pointed that during the course of assessment proceedings, the assessee had agreed for disallowance of depreciation claimed. The ld. Departmental Representative prayed for reversing the findings of the CIT(A) and to uphold the assessment order. 4. Per contra, Shri Jayesh Dadia appearing on behalf of the assessee vehemently defended the impugned order and prayed for dismissing the appeal of the Revenue. The ld. Authorized Representative for the assessee made a statement at Bar that the assessee has not claimed cost of assets as application of funds. The ld. Authorized Representative for the assessee further submits that the assessee never conceded before the Assessing 3 ITA NO. 2901/MUM/2022(A.Y.2015-16) Officer for making disallowance of depreciation claim. The ld. Authorized Representative for the assessee referred to the submissions made before the Assessing Officer at page -2 of the paper book. He pointed that in para -2 of the submissions, the assessee did mention about the revised computation without claiming depreciation as deduction, however, that was the alternate claim and the reason for making said claim was that even if depreciation is disallowed it would result in loss. The ld. Authorized Representative for the assessee pointed that this aspect has been considered by the CIT(A) in para – 5.2 of the impugned order. The ld. Departmental Representative further pointed that in preceding Assessment Years and in the Assessment Year under appeal and even thereafter, the assessee had never claimed any of the amounts towards cost of assets as application of income. 5. Both sides heard, orders of authorities below examined. Sub-section (6) to Section -11 was inserted by the Finance (No.2) Act 2014 w.e.f. 01/04/2015. The provisions of sub-section(6) are reproduced herein below for ready reference. “Section 11(6): In this section where any income is required to be applied or accumulated or set apart for application, then, for such purposes the income shall be determined without any deduction or allowance by way of depreciation or otherwise in respect of any asset, acquisition of which has been claimed as an application of income under this section in the same or any other previous year.” As per the provisions of sub-section(6), the income applied or accumulated for application shall not be eligible for benefit of deduction or allowance by way depreciation. In the instant case the assessee has claimed depreciation of Rs.5,52,77,341/-. The Assessing Officer disallowed assessee’s claim of depreciation on mere presumption that the assessee has claimed cost of asset as application of funds. A perusal of the impugned order shows that the CIT(A) has recorded finding of fact that the assessee in the past six years has 4 ITA NO. 2901/MUM/2022(A.Y.2015-16) never claimed any amount being cost of asset as application. This fact has not been rebutted by the Revenue. In the impugned assessment year, the assessee has not utilized/set apart any amount towards the cost of asset. In so far as observations of the Assessing Officer that the assessee has agreed for the disallowance of depreciation, we find that the disallowance was made by the Assessing Officer on misreading/misinterpretation of the written submissions filed by the assessee. We find no infirmity in the findings of CIT(A), hence, the same are upheld and appeal by the Revenue is dismissed being devoid of any merit. 6. In the result, appeal by the Revenue is dismissed. Order pronounced in the open court on Friday the 13 th day of January, 2023. Sd/- Sd/- ( GAGAN GOYAL ) (VIKAS AWASTHY) ेख क र य/ACCOUNTANT MEMBER य यक य/JUDICIAL MEMBER म ु ंबई/ Mumbai, 2 न ंक/Dated 13/01/2023 Vm, Sr. PS(O/S) े Copy of the Order forwarded to : 1. +/The Appellant , 2. , - / The Respondent. 3. आयकर आय ु 3-( )/ The CIT(A)- 4. आयकर आय ु 3- CIT 5. 4 ग य , - न , आय. . ., म ु बंई/DR, ITAT, Mumbai 6. ग 67 8 9 /Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar), ITAT, Mumbai