DDIT (E), New Delhi V. Research & Information System for Developing Countries, New Delhi

ITA 322/DEL/2010

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5814 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 22-03-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 21-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 12A

Judgement Text

I.T.A. NO. 322 /DEL/2010 1/4 IN THE INCOME TAX APPELLATE TRIBUNAL, NEW DELHI, BENCH F BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND R.C. SHARMA, ACCOUTANT MEMBER ITA NO. 322/DEL/2010 (ASSESSMENT YEAR 2006-07) DDIT(E), VS. RESEARCH & INFORMATION INV.CIR.-II, NEW DELHI SYSTEM FOR DEVELOPING COUNTRIES, ZONE 4B, 4 TH FLOOR, INDIAN HABITATE CENTRE, LODHI ROAD, NEW DELHI. (APPELLANTS) (RESPONDENTS) PAN / GIR NO.AAATR6664D APPELLANT BY: SHRI H K LAL, SR. DR RESPONDENT BY: SHRI TARUN ROHATGI, CA ORDER PER RAJPAL YADAV, JM: 1. THE REVENUE IS IN APPEAL BEFORE US AGAINST THE O RDER OF LD. CIT(A) DATED 23 RD OCTOBER 2009. THE GROUNDS OF APPEAL TAKEN BY THE REVENUE READ AS UNDER: I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN BELIEVING THE CONTENTION OF THE ASSESSEE THAT DEPRECIATION HAD NO T BEEN CLAIMED IN THE INCOME & EXPENDITURE A/C WHEN IN THE FACT THE ASSESSEE HAD INDEED ACTUALLY CLAIME D DEPRECIATION IN THE INCOME & EXPENDITURE A/C. II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN ALLOWING THE CLAI M OF DEPRECIATION TO THE ASSESSEE IGNORING THE FACT T HAT I.T.A. NO. 322 /DEL/2010 2/4 TECHNICALLY 100% DEPRECIATION STANDS ALLOWED TO THE ASSESSEE BECAUSE EVERY YEAR THE ASSESSEE IS CLAIMIN G PURCHASE OF ASSETS AS APPLICATION OF FUNDS. BY FURTHER ALLOWING DEPRECIATION THE LD. CIT(A) HAS IN FACT ALLOWED EXTRA BENEFIT TO THE ASSESSEE BY WAY O F APPLICATION OF INCOME TO THE TUNE OF DEPRECIATION ALLOWED AT RS.18,01,649/-. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A SOCIETY ESTABLISHED BY THE GOVERNMENT OF INDIA, MINISTRY OF EXTERNAL AFFAIRS IN 1983 WITH A VIEW TO PROMOTE THE CONCEPT OF SELF RELIANCE AMONG DEVELOPI NG COUNTRIES AND TO FORGE AND MAINTAIN A SYSTEM OF EFFECTIVE LINKS AMONGST THE VARIOUS RESEARCH INSTIT UTIONS OF THESE COUNTRIES. IT IS REGISTERED U/S 12A OF TH E I. T. ACT. IT HAS FIELD ITS RETURN OF INCOME ON 30 TH OCTOBER 2006 DECLARING NIL INCOME. THE A.O. OBSERVED THA T THE ASSESSEE HAD PURCHASED THE ASSETS OF RS.12,14,9 06/-. IT HAD CLAIMED DEPRECIATION OF RS.18,01,649/-. ACCORDING TO THE A.O., THE ASSESSEE IS TAKING DOUBL E BENEFIT. HE HARBORED THIS OPINION ON THE GROUND TH AT THE ASSESSEE CONSIDERING THE INVESTMENT OF PURCHASE OF ASSETS AS APPLICATION OF FUNDS ON THE OTHER HAND IT IS CLAIMING DEPRECIATION ALSO ON SUCH ASSETS. HE DISALLOWED ALLEGED DEPRECIATION OF RS.18,01,649/-. 3. ON APPEAL, LD. CIT(A) HAS FOUND THAT THE ASSESSE E HAS NOT CLAIMED ANY DEPRECIATION. LD. CIT(A) HAS I.T.A. NO. 322 /DEL/2010 3/4 REPRODUCED BREAK UP OF EXPENSES OF RS.2,01,55,109/- . FROM THIS BREAK UP LD. CIT(A) HAS OBSERVED THAT NO CLAIM OF DEPRECIATION AMOUNTING TO RS.18,01,649/- I S EMERGING OUT. IN PARA 5 AND 5.1 LD. CIT(A) HAS RECORDED THE CATEGORICAL FINDING OF THE FACT THAT DEPRECIATION WAS NOT CLAIMED BY THE ASSESSEE. 4. BEFORE US, LD. D.R. EXCEPT PUTTING RELIANCE UPON THE ORDER OF THE A.O., COULD NOT POINT OUT AS TO HOW TH E A.O. HAS RECORDED A FINDING THAT DEPRECIATION WAS CLAIMED. THE LD. D.R. WAS UNABLE TO CONTROVERT THE SPECIFIC FINDING OF THE FACT RECORDED BY THE LD. CI T(A) THAT NO DEPRECIATION WAS CLAIMED BY THE ASSESSEE. ON THE OTHER HAND, LD COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF LD. CIT(A) AND SUBMITTED THAT DEPRECIA TION WAS NOT CLAIMED BY THE ASSESSEE. 5. ON DUE CONSIDERATION OF ABOVE FACTS AND CIRCUMST ANCES, WE ARE OF THE OPINION THAT LD. 1 ST APPELLATE AUTHORITY IS ON THE HIGHER PEDESTAL IN THE HIERARCHY OF THE TAX AUTHORITIES AND THE DEPARTMENT HAS IMPUGNED THE ORD ER OF LD. CIT(A). IT IS THE DUTY OF THE REVENUE TO BR ING MATERIAL WHICH CAN PERSUADE US TO RECORD A FINDING THAT FINDING OF FACTS RECORDED BY THE CIT(A) TO THE EFFE CT THAT NO DEPRECIATION WAS CLAIMED BY THE ASSESSEE IS INCORRECT. NO SUCH MATERIAL WAS BROUGHT TO OUR NOT ICE AT THE TIME OF HEARING. THEREFORE, WE DO NOT SEE ANY I.T.A. NO. 322 /DEL/2010 4/4 REASON TO INTERFERE IN THE ORDER OF LD. CIT(A). HE NCE, THE APPEAL OF THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. 7. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT O N 31 ST MARCH, 2010. SD./- SD./- (R.C.SHARMA) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31 ST MAR., 2009 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI