The Asstt. Commissioner of Income Tax (Exemptions), Circle-1, Ahmedabad V. Bholaram Education Society, Gandhinagar

ITA 3041/AHD/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9204 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 18-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMESH CHANDRA PANDEY
• Assessee Lawyers: A LOG SAIYED
• Keywords: Depreciation; Charitable institution; Capital receipt; Capital expenditure; Set aside
• Section: 143(3); 12A; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNT AN T MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER ./ ITA NO. 3041/AHD/2016 ( / ASSESSMENT YEAR : 2012 - 13 ) THE ACIT (EXEMPTIONS), CIRCLE - 1 AHMEDABAD / VS. BHOLARAM EDUCATION SOCIETY C/O.DELHI PUBLIC SCHOOL AMBAPUR VILLAGE KOBA, GANDHINAGAR - 382 421 ./ ./ PAN/GIR NO. : AAATB 8415 E ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI RAMESH CHANDRA PANDEY, CIT - DR / RESPONDENT BY : SHRI A LOG SAIYED, AR / DATE OF HEARING 20/02/2019 / DATE OF PRONOUNCEMENT 29 /03 /201 9 / O R D E R PER WASEEM AHMED , ACCOUNTANT MEMBER : THE CAPTIONED APPEAL HA S BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) GANDHINAGAR A HMEDABAD [CIT (A) IN SHORT] VIDE APPEAL NO. CIT(A) /GNR/507/2015 - 16 DATED 30/08/2016 ARISING IN THE A SSESSMENT ORDER PASSED UNDER S. 143(3) OF THE INCOME TAX ACT, 1961( HERE - IN - AFTER REFERRED TO AS 'THE ACT') DATED 27/03/2015 RELEVANT TO ASSESSMENT YEAR (AY) 2012 - 13 . 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ITA NO. 3041/AHD/2016 ACIT VS. BHOLARAM EDUCATION SOCIETY A SST.YEAR 2012 - 13 - 2 - 1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE IS THE LD.CIT(A) JUSTIFIED IN ALLOWING THE ASSESSEE S APPEAL IN DELETING THE ADDITIONS OF DEPRECIATION MADE BY THE ASSESSING OFFICER OF RS.3,51,79,106/ - . 2) WHETHER ON THE FACTS AND CIRCUMSTANCES OF T HE CASE IS THE LD.CIT(A) JUSTIFIED IN ALLOWING THE ASSESSEE S APPEAL IN DELETING THE ADDITION OF DEVELOPMENT FUND MADE BY THE ASSESSING OFFICER OF RS.41,66,000/ - . 3) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE IS THE LD. CIT(A) JUSTIFIED IN GIVING THE BENEFIT OF SECTION 11 & 12 TO THE ASSESSEE WHICH THE ASSESSING OFFICER DISALLOWED BY INVOKING THE PROVISIONS OF SECTION 13(1)(C)(II). 4) WHETHER ON THE FACTS CIRCUMSTANCES OF THE CASE IS THE LD.CIT(A) JUSTIFIED IN ALLOWING THE ASSESSEE S APPEAL IN DELETING TH E ADDITION OF CAPITAL EXPENDITURE MADE BY THE ASSESSING OFFICER OF RS.8,10,86,589/ - . 5) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD .COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 6) IT IS, THEREFORE, PRAYED T HAT THE ORDER OF THE LD .COMMISSIONER OF INCOME TAX (APPEALS) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED . 3. THE FIRST ISSUE RAISED BY THE REVENUE IS THAT LEARNED CIT (A) ERRED IN DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF DEP RECIATION AMOUNTING TO 3,51,79,106.00. 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IN THE PRESENT CASE IS A SOCIETY AND ENGAGED IN THE EDUCATIONAL AND HEALTHCARE ACTIVITIES. THE ASSESSEE IS REGISTERED UNDER SECTION 12A OF THE ACT AND ACCORDINGLY CL AIMING THE EXEMPTIONS UNDER SECTION 11 OF THE ACT. THE AO DURING THE ASSESSMENT PROCEEDINGS FOUND THAT THE ASSESSEE CLAIMED TO HAVE APPLIED THE ADDITION OF FIXED ASSETS AND THE DEPRECIATION THEREON FOR CHARITABLE ITA NO. 3041/AHD/2016 ACIT VS. BHOLARAM EDUCATION SOCIETY A SST.YEAR 2012 - 13 - 3 - ACTIVITIES IN INDIA. THE AO WAS OF THE VIEW THAT THE ASSESSEE IS CLAIMING DOUBLE BENEFIT AS AN APPLICATION OF INCOME FOR THE FIXED ASSETS AND THE DEPRECIATION. THEREFORE THE AO DISALLOWED THE AMOUNT OF DEPRECIATION OF 3,51,79,106 AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 5. THE A GGRIEVED ASSESSEE PREFERRED AN APPEAL TO LEARNED CIT (A) WHO HAS DELETED THE ADDITION MADE BY THE AO. 6. BEING AGGRIEVED BY THE ORDER OF LEARNED CIT (A), THE REVENUE IS IN APPEAL BEFORE US. 7. THE LEARNED DR AND THE LEARNED AR BEFORE US RELIED ON THE ORDER OF AUTHORITIES BELOW AS FAVORABLE TO THEM. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AT THE OUTSET , WE NOTE THAT THE TRIBUNAL IN THE OWN CASE OF THE ASSESSEE BEARING ITA NO. 92/AHD/2014 PERTAINING TO THE ASSESSMENT YEAR 2010 - 11 DECIDED THE ISSUE AGAINST THE REVENUE AND IN FAVOR OF THE ASSESSEE VIDE ORDER DATED 14 - 9 - 2017. THE RELEVANT EXTRACT OF THE ORDER IS EXTRACTED BELOW. 14. THE REVENUE S LAST SUBSTANTIVE GROUND PLEADS THAT THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN REVERSING ASSESSING OFFICER S ACTION DISALLOWING DEPRECIATION OF RS.133,60,206/ - MADE ON THE GROUND THAT THE ASSESSEE COULD NOT HAVE CLAIMED THE CORRESPONDING SUMS SPENT ON ACQUISITION OF FIXED ASSETS FOR THE PURPOSE OF DEDUCTION AS WELL AS FOR THE IMPUGNED DEPRECIATION SINCE THE SAME AMOUNTED TO A DOUBLE DEDUCTION CASE. WE FIND THAT THIS ISSUE IS NO MORE RES INTEGRA AS HON BLE ITA NO. 3041/AHD/2016 ACIT VS. BHOLARAM EDUCATION SOCIETY A SST.YEAR 2012 - 13 - 4 - JURISDICTIONAL HIGH COURT S DECISION IN CIT VS. SETH MANILAL RANCHHODLAL BHAVAN TRUST 188 ITR 598 , A CO - ORDINATE BENCH IN ITO VS. SARDAR PUBLIC CHARITABLE TRUST ITA NO.285 & 286/AHD/2013 ALONGWITH CIT VS. TINY TOTS EDUCATION SOCIETY (2011) 330 ITR 21 (P&H) AND DIT VS. SHRI VILE PARLE KELAVANI MANDAL (2015) 378 ITR 593 (BOM.) HAVE ALREADY ADJUDICATED THE VE RY ISSUE IN ASSESEE S FAVOUR. IT IS ALSO BROUGHT TO OUR NOTICE THAT THE LEGISLATURE HAS NOW AMENDED SECTION 11(6) OF THE ACT BY THE FINANCE ACT, 2014 W.E.F. 01.04.2015 DENYING SUCH A DOUBLE DEDUCTION CLAIM. HON BLE KARNATKA HIGH COURT HAS ALREADY HELD THE SAME TO BE HAVING PROSPECTIVE OPERATION ONLY IN DIT VS. AL AMEEN CHARITABLE TRUST FUND (2016) 67 TAXMANN.COM 160. WE THEREFORE SEE NO REASON TO INTERFERE WITH THE CIT(A) S FINDING UNDER CHALLENGE. 8.1. AS THE ISSUE ON HAND IS IDENTICAL TO TH E FACTS OF THE CASE AS DISCUSSED ABOVE, THEREFORE WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDING OF THE LEARNED CIT - A. HENCE THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 9. THE SECOND ISSUE RAISED BY THE REVENUE IS THAT LEARNED CIT (A) E RRED IN DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF DEVELOPMENT FUND AMOUNTING TO 41,66,000.00. 10. THE ASSESSEE DURING THE YEAR HAS RECEIVED ONE - TIME DEVELOPMENT FEE FROM THE STUDENTS AND TREATED THE SAME AS CORPUS FUND UNDER SECTION 11(1)(D ) OF THE ACT. HOWEVER , THE AO WAS OF THE VIEW THAT SUCH RECEIPT IS A VOLUNTARY CONTRIBUTION AND ACCORDINGLY TREATED THE INCOME OF THE ASSESSEE. 11. THE A GGRIEVED ASSESSEE PREFERRED AN APPEAL TO LEARNED CIT (A) WHO HAS DELETED THE ADDITION MADE BY THE A O. ITA NO. 3041/AHD/2016 ACIT VS. BHOLARAM EDUCATION SOCIETY A SST.YEAR 2012 - 13 - 5 - 12. BEING AGGRIEVED BY THE ORDER OF LEARNED CIT (A), THE REVENUE IS IN APPEAL BEFORE US. 13. THE LEARNED DR AND THE LEARNED AR BEFORE US RELIED ON THE ORDER OF AUTHORITIES BELOW AS FAVORABLE TO THEM. 14. WE HAVE HEARD THE RIVAL CONTENTI ONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AT THE OUTSET , WE NOTE THAT THE TRIBUNAL IN THE OWN CASE OF THE ASSESSEE BEARING ITA NO. 92/AHD/2014 PERTAINING TO THE ASSESSMENT YEAR 2010 - 11 DECIDED THE ISSUE AGAINST THE REVENUE AND IN FAVOR OF THE ASSESSEE VIDE ORDER DATED 14 - 9 - 2017. THE RELEVANT EXTRACT OF THE ORDER IS EXTRACTED BELOW. 8. THE REVENUE S FIFTH SUBSTANTIVE GROUND SEEKS TO REVIVE ASSESSING OFFICER S ACTION TREATING DEVELOPMENT FUND AMOUNT OF RS.32,69,000/ - AS ASSESSEE S TAXAB LE INCOME. WE NOTICE HEREIN AS WELL THAT THE ASSESSING OFFICER MADE THE IMPUGNED ADDITION IN PAGE 8 WITHOUT DISCUSSING ANYTHING ON MERITS. THE CIT(A) ON THE OTHER HAND DECIDES THE ISSUE IN ASSESSEE S FAVOUR AS UNDER: 10. I HAVE CONSIDERED THE FACTS OF THE CASE, ASSESSMENT ORDER AND THE SUBMISSION MADE BY THE APPELLANT. THE A.O. HAS NOWHERE IN HIS ORDER DISCUSSED THE REASONS AS TO WHY THE SAID ADDITION OF RS.32,69,000/ - IS MADE. IT IS SEEN THAT THE ABOVE FIGURE APPEARS IN THE BALANCE SHEET AS ADDITION TO DEVELOPMENT FUND AND THE A.O. HAS CONSIDERED THE SAID DEVELOPMENT FUND AS INCOME BECAUSE HE HAS TREATED THE TRUST AS AOP. AS I HAVE ALREADY DECIDED THE STATUS OF THE APPELLANT AS 'REGISTERED TRUST' AS PER SEC. 11 AND 12 OF THE ACT IN GROUND NO. 1, 2 & 3 ( SUPRA). THEREFORE, THIS ADDITION DOES NOT SURVIVE. EVEN OTHERWISE, ON THE MERITS AS SUBMITTED IN THE WRITTEN SUBMISSION, THE APPELLANT HAS RECEIVED THE SAID DEVELOPMENT FUND AND ALSO USED FOR THE PURPOSE FOR WHICH IT WAS RECEIVED . THE SAID FUND WAS RECEIVE D ITA NO. 3041/AHD/2016 ACIT VS. BHOLARAM EDUCATION SOCIETY A SST.YEAR 2012 - 13 - 6 - EARMARKED AS 'DEVELOPMENT FUND' AND IT WAS USED FOR THE DEVELOPMENT ACTIVITIES, AS IS APPARENT FROM AUDITED BALANCE SHEET SUBMITTED DURING THE APPELLATE PROCEEDINGS. IT IS ALSO SEEN THAT AS PER BALANCE SHEET, THE ENTIRE FUND HAS BEEN UTILIZED . THE BALANC E SHEET INDICATES THE HEAD OF 'DEVELOPMENT FUND (UTILISED) ACCOUNT' OF RS. 1,66,15,000/ - , WHICH IS MORE THAN THE ALLEGED DEVELOPMENT FUND OF RS. 32,69,000/ - . THUS THIS GROUND OF APPEAL IS ALLOWED AND THE A.O. IS DIRECTED NOT TO CONSIDER THE DEVELOPMENT FUN D AS PART OF INCOME. 9. HEARD BOTH THE PARTIES. RELEVANT FINDINGS PERUSED. IT IS NO MORE IN DISPUTE THAT THIS ASSESSEE IS A REGISTERED TRUST(SUPRA). LEARNED COUNSEL FOR THE ASSESSEE TAKES US TO PAGES 16 TO 18 OF THE PAPER BOOK INDICATING IT TO HAVE UT ILIZED THE IMPUGNED DEVELOPMENT FUND IN RELEVANT PREVIOUS YEAR. A CO - ORDINATE BENCH IN ITO VS. J. D. TYTLER SCHOOL SOCIETY (2014) 49 TAXMANN.COM 294 (DELHI) HOLDS THAT SUCH A DEVELOPMENT FUND FORMING PART OF STUDENT FEE AS UTILIZED IN THEIR AMENITIES AND WELFARE IS IN THE NATURE OF CAPITAL RECEIPT NOT ASSESSEABLE AS INCOME. WE THEREFORE FIND NO REASON TO UPSET CIT(A) S ABOVE EXTRACTED CONCLUSION. THIS FIFTH SUBSTANTIVE GROUND IS ACCORDINGLY REJECTED . 14.1. AS THE ISSUE ON HAND IS IDENTICAL TO THE FACTS OF THE CASE AS DISCUSSED ABOVE, THEREFORE WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDING OF THE LE ARNED CIT - A. HENCE THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 15. THE THIRD ISSUE RAISED BY THE REVENUE IS THAT LEARNED CIT (A) ERRED IN ALLOWING THE BENEFIT OF SECTION 11 & 12 OF THE ACT FOR THE RENT PAID TO THE TRUSTEES. 15.1. THE AO DURING THE ASSESSMENT PROCEEDINGS FOUND THAT THE ASSESSEE HAS PAID RENT TO THE TRUSTEES IN CONTRAVENTION TO THE PROVISIONS OF ITA NO. 3041/AHD/2016 ACIT VS. BHOLARAM EDUCATION SOCIETY A SST.YEAR 2012 - 13 - 7 - SECTION 13(1)(C)(II) OF THE ACT. ACCORDINGLY , THE AO HELD THAT THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTIONS UNDER SECTION 11 AND 12 OF THE ACT. 16. THE A GGRIEVED ASSESSEE PREFERRED AN APPEAL TO LEARNED CIT (A) WHO HAS DELETED THE ADDITION MADE BY THE AO. 17. BEING AGGRIEVED BY THE ORDER OF LEARNED CIT (A), THE REVENUE IS IN APPEAL BEFORE US. 18. THE LEARNED DR AND THE LEARNED AR BEFORE US RELIED ON THE ORDER OF AUTHORITIES BELOW AS FAVORABLE TO THEM. 19. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AT THE OUTSET , WE NOTE THAT THE TRIBUNAL IN THE OWN CASE OF T HE ASSESSEE BEARING ITA NO. 92/AHD/2014 PERTAINING TO THE ASSESSMENT YEAR 2010 - 11 DECIDED THE ISSUE AGAINST THE REVENUE AND IN FAVOR OF THE ASSESSEE VIDE ORDER DATED 14 - 9 - 2017. THE RELEVANT EXTRACT OF THE ORDER IS EXTRACTED BELOW. 6. WE HAVE HEARD BOTH THE PARTIES STRONGLY REITERATING THEIR RESPECTIVE STANDS. CASE FILE INDICATES THAT THE ASSESSING OFFICER ADMITTEDLY DID NOT DRAW ANY COMPARATIVE CHART OR VERIFICATION BETWEEN THE IMPUGNED PAYMENTS VIS - - VIS THEIR MARKET RATE OF RENT IN QUESTION. THE CIT(A) ON THE OTHER HAND HAS TAKEN INTO ACCOUNT AN APPROVED VALUER S REPORT AS WELL AS ALL CORRESPONDING DOCUMENTS INDICATING ALL RELEVANT PARTICULARS INDICAT ING THE ASSESSEE TO BE UTILIZING VACANT SPACE ALONGWITH LAND AND BUILDING WHILST CONCLUDING THAT THE PAYMENTS IN QUESTION CANNOT BE HELD AS EXCESSIVE ONES. IT HAS FURTHER COME ON RECORD THAT THE ASSESSEE HAD BEEN PAYING SIMILAR RENTS IN PRECEDING ITA NO. 3041/AHD/2016 ACIT VS. BHOLARAM EDUCATION SOCIETY A SST.YEAR 2012 - 13 - 8 - ASSESSM ENT YEARS AS WELL. IT PLACES ON RECORD ASSESSMENT ORDER(S) PERTAINING TO EARLIER ASSESSMENT YEARS NOT SHOWING ANY SUCH DISALLOWANCE. THE REVENUE FAILS TO REBUT ALL THESE FINDINGS WITH THE HELP OF ANY COGENT EVIDENCE ON RECORD. WE THEREFORE AFFIRM THE CI T(A) S FINDINGS UNDER CHALLENGE. THE REVENUE S SECOND AND THIRD SUBSTANTIVE GROUNDS ARE ACCORDINGLY REJECTED . 19.1. AS THE ISSUE ON HAND IS IDENTICAL TO THE FACTS OF THE ISSUE AS DISCUSSED ABOVE, THEREFORE WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDING OF THE LEARNED CIT - A. HENCE THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 20. THE FOURTH ISSUE RAISED BY THE REVENUE IS THAT LEARNED CIT (A) ERRED IN DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF CAPITAL EXPENDITURE AMOUNTING TO 8, 10,86,589.00. 21. THE ASSESSEE DURING THE YEAR HAS INCURRED AN EXPENSE OF 8,10,86,589.00 ON ACCOUNT OF ADDITION TO FIXED ASSETS ON WHICH THE ASSESSEE ALSO CLAIMED DEPRECIATION. THE AO WAS OF THE VIEW THAT THE ASSESSEE IS CLAIMING T HE BENEFIT OF DEPRECIATION AS WELL AS EXPENSES INCURRED ON THE ADDITION OF SUCH FIXED ASSETS BY WAY OF APPLICATION OF INCOME. ACCORDINGLY , THE AO DISALLOWED THE SAME AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 22. THE A GGRIEVED ASSESSEE PREFERRED AN APPEAL TO LEARNED CIT (A) WHO HAS DELETED THE ADDITION MADE BY THE AO. ITA NO. 3041/AHD/2016 ACIT VS. BHOLARAM EDUCATION SOCIETY A SST.YEAR 2012 - 13 - 9 - 23. BEING AGGRIEVED BY THE ORDER OF LEARNED CIT (A), THE REVENUE IS IN APPEAL BEFORE US. 24. THE LEARNED DR AND THE LEARNED AR BEFORE US RELIED ON THE O RDER OF AUTHORITIES BELOW AS FAVORABLE TO THEM. 25. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AT THE OUTSET , WE NOTE THAT THE TRIBUNAL IN THE OWN CASE OF THE ASSESSEE BEARING ITA NO. 92/AHD/2014 PERTAINING TO THE ASSESSMENT YEAR 2010 - 11 DECIDED THE ISSUE AGAINST THE REVENUE AND IN FAVOR OF THE ASSESSEE VIDE ORDER DATED 14 - 9 - 2017. THE RELEVANT EXTRACT OF THE ORDER IS EXTRACTED BELOW. 12. THE REVENUE S SEVENTH SUBSTANTIVE GROUND PLEADS THAT THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONSIDERING ASSESSEE S INVESTMENT IN FIXED ASSETS AMOUNTING TO RS.13,51,02,167/ - AS APPLICATION OF INCOME AS WELL AS ITS DEDUCTION. THERE IS NO DISPUTE ABOUT THE ASSESSEE HAVE INCURRED THE IMPUGNED EXPENDITURE. THE ASSESSING OFFICER WAS OF THE VIEW THAT ASSESSEE S INSTANT ACTION AMOUNTED TO CLAIMING THE VERY RELIEF IN BOTH APPLICATION AS WELL AS COMPUTATION OF INCOME. THE CIT(A) REVERSES THE SAME AS UNDER: 12.2 I HAVE CONSIDERED THE FACTS OF THE CASE, ASSESSMENT ORDER AS WELL AS THE SUBMISSION OF THE APPELLANT. ON PAGE NO. 8, PARA 1 OF THE ASSESSMENT ORDER, THE A.O. HAS CONCLUDED THAT WHEN THE PRINCIPAL AMOUNT WAS APPLIED FOR ACQUIRING ASSETS, IT WAS TREATED AS APPLIED FOR CHARITABLE PURPOSE AND ENTIRE AMOUNT WAS CLAIMED U/S. 11. THE A.O. HAS NOT CONSIDERED THAT THERE ARE TWO SEPARATE ISSUES I.E. ONE IS APPLICATION OF INCOME, AND SECOND IS COMPUTATION OF INCOME. SO FAR AS APPLICATION OF INCOME IS CONCERNED, A MOUNT APPLIED FOR ACQUIRING FIXED ASSETS IS COVERED U/S. 11(1)(A) AND THE SAME IS ALLOWABLE AS INCOME APPLIED FOR ITA NO. 3041/AHD/2016 ACIT VS. BHOLARAM EDUCATION SOCIETY A SST.YEAR 2012 - 13 - 10 - CHARITABLE OR RELIGIOUS PURPOSE, AND THE SECOND IS ALLOWABILITY OF DEPRECIATION IN COMPUTATION OF INCOME. I HAVE CONSIDERED VARIOUS JUDGMENTS CITED BY THE APPELLANT AND AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF S.RM.M.CT.M TIRUPPANI TRUST V. CIT [1998] 230 ITR 636 AND CIT V. TINY TOTS EDUCATION SOCIETY 330 ITR 21 (P&H) AS WELL AS THE DECISION OF THE GUJARAT HIGH COURT IN THE CASE OF SA TYA VIJAY PATEL HINDU DHARMASHALA TRUST V. CIT 86 ITR 683 WHEREIN IT HAS BEEN 'HELD THAT THE AMOUNT SPENT BY THE TRUSTEE IN THE CONSTRUCTION OF THE NEW DHARAMSHALA WAS AN APPLICATION OF INCOME TOWARDS THE CHARITABLE PURPOSES OF THE TRUST'. IN ALL THE JUDGM ENTS IT HAS BEEN HELD BY THE HIGHER AUTHORITIES THAT THE AMOUNT UTILIZED FOR REQUIRING FIXED ASSETS IS ALLOWABLE AS APPLICATION OF INCOME AS PER SEC. 11(1)(A) OF THE ACT. THERE ARE TWO SEPARATE ISSUES ONE IS PERTAINING TO APPLICATION OF INCOME AND OTHER IS COMPUTATION OF INCOME. IN APPLICATION OF INCOME OF TRUST , AMOUNT APPLIED FOR ACQUIRING FIXED ASSETS IS CONSIDERED AS ELIGIBLE , THEREFORE THIS GROUND OF APPEAL IS ALLOWED AND AO IS DIRECTED TO ALLOW AMOUNT OF INVESTMENT IN THE FIXED ASSETS AS PART OF APPLI CATION OF INCOME AS PER SEC. 11(1)(A). 13. HEARD BOTH THE SIDES. LEARNED DEPARTMENTAL REPRESENTATIVE QUOTES CASE LAW LISSIE MEDICAL INSTITUTIONS VS. CIT 348 ITR 344 ( KERLA ) TO CONTEND THAT THE CIT(A) HAD RIGHTLY MADE THE IMPUGNED DISALLOWANCE. HE HOWEV ER FAILS TO DISPUTE THAT THE SAME GOES CONTRARY TO HON BLE JURISDICTIONAL HIGH COURT S DECISION IN CASE OF SATYAVARDHAN PATEL HINDU DHARAMSHALA TRUST (SUPRA). WE THEREFORE EXPRESS OUR RESPECTFUL AGREEMENT WITH HON BLE JURISDICTIONAL HIGH COURT S DECISION TO AFFIRM THE CIT(A) S FINDINGS UNDER CHALLENGE. 25.1. AS THE ISSUE ON HAND IS IDENTICAL TO THE FACTS OF THE ISSUE AS DISCUSSED ABOVE, THEREFORE WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDING OF THE LEAR NED CIT - A. HENCE THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. ITA NO. 3041/AHD/2016 ACIT VS. BHOLARAM EDUCATION SOCIETY A SST.YEAR 2012 - 13 - 11 - 26. THE ISSUE RAISED IN GROUND NO. 5 AND 6 ARE GENERAL , AND THEREFORE NO SEPARATE ADJUDICATION IS REQUIRED. ACCORDINGLY, WE DISMISS THE SAME. 27. IN THE RESULT , THE APPEAL OF TH E REVENUE IS DISMISSED . THIS ORDER PRONOUNCED IN OPEN COURT ON 29 / 0 3 / 201 9 - SD - - SD - ( MS.MADHUMITA ROY ) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (TRUE COPY) A HMEDABAD; DATED 29 / 0 3 /20 19 . . , . . . / T.C. NAIR, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT (A) - GANDHINAGAR, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, //TRUE COP Y // / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD