ITO 11(1)(1), MUMBAI V. CHILDERN FILMS SOCIETY (INDIA), MUMBAI

ITA 3478/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79052 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 13-03-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 16-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKAS AGARWAL
• Keywords: Depreciation; Charitable institution

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI .., . .!'#, $ , % BEFORE SHRI I.P.BANSAL, JM AND SHRI N.K.BILLAIYA, A M ITA NO.3478/MUM/2012 : ASST.YEAR 2003-04 ITA NO.3479/MUM/2012 : ASST.YEAR 2005-06 THE INCOME TAX OFFICER (EXEM)- I(1), ROOM NO.505, 5 TH FLOOR, PIRAMAL CHAMBERS, LALBAUG, MUMBAI 12. PAN:AAATC 5452C M/S.CHILDREN FILMS SOCIETY (INDIA), FILM DIVISION COMPLEX, 24, DR. G. DESHMUKH MARG, MUMBAI 26. ( &' / // / APPELLANT) / VS. ( )*&'/ RESPONDENT) &' + , + , + , + , /APPELLANT BY : SHRI VIKAS AGARWAL )*&' + , + , + , + , /RESPONDENT BY : NONE + -.$ / / / / DATE OF HEARING : 03.06.2014 /01 + -.$ / DATE OF PRONOUNCEMENT : 03.06.2014 2 2 2 2 / / / / O R D E R PER I.P.BANSAL (JM) : THESE ARE DEPARTMENTAL APPEALS DIRECTED AGAINST TW O SEPARATE ORDERS PASSED BY LD. CIT(A)-I,MUMBAI DATED 2/3/2012 FOR AS SESSMENT YEAR 2003-04 AND 2005-06. GROUNDS OF APPEAL IN BOTH THE APPEALS ARE IDENTICAL AND READ AS UNDER: 1.WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) WAS RIGHT IN DIRECTING THE AO TO ALLOW THE CLAIM OF DEPRECIATION RELYING ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF CIT VS. INSTITUTE OF BANKING PERSONAL SERVICES REPORTED IN 264 ITR 110 (BOM) IGNORING THE RATIO OF HONBLE SUPREME COURT JUDGMENTS IN THE CASE OF ESCO RTS LTD. VS. UNION OF INDIA (199 ITR 43) WHEREIN HONBLE SUPREME COURT HAS HELD THAT DOUBLE DEDUCTION CANNOT BE PRESUMED IF THE SAME IS NOT SPECIFICALLY PROVIDED BY LAW, IN ADDITION TO NORMAL DEDUCTION. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE COMMI SSIONER OF INCOME TAX (APPEALS) I, MUMBAI BE SET ASIDE AND THAT OF THE AS SESSING OFFICER BE RESTORED. ITA NO.3478/MUM/2012 : ASST.YEAR 2003-04 ITA NO.3479/MUM/2012 : ASST.YEAR 2005-06 2 3. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER AN Y GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. THE ASSESSEE IS REGISTERED UNDER SECTION 12A(A ) OF THE INCOME TAX ACT,1961 (THE ACT) ON 25/9/1975. LD. CIT(A) HAS AL LOWED THE CLAIM OF DEPRECIATION TO THE ASSESSEE ON THE BASIS OF DECISI ON OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. INSTITUTE OF BANKING 264 ITR 110(BOM) , WHEREIN IT HAS BEEN HELD THAT THE CHARITABLE INSTITUTION IS EN TITLED TO SUCH DEPRECIATION EVEN IF THE EXPENDITURE WAS IN CAPITAL FOLD AND WA S EARLIER ALLOWED AS APPLICATION OF INCOME. LD. CIT(A) HAS OBSERVED THA T THE ASSESSEE EVEN DID NOT CLAIM THE SAID EXPENDITURE AS APPLICATION OF INCOME IN THE EARLIER YEARS, THEREFORE, THE CASE OF THE ASSESSEE WAS RATHER ON A STRONG FOOTING. THEREFORE, HE HAS HELD THAT FOR ASSESSMENT YEAR 2003-04, AFTER C ONSIDERING DEPRECIATION OF RS.2,36,06,369/- THE INCOME OF THE ASSESSEE WOULD B ECOME NIL AND THUS, NO AMOUNT WOULD BE LEFT FOR DEDUCTION AS STATUTORY 1 5% ACCUMULATION OR AS APPLICATION OF FUND. FOR A.Y 2005-06 ALSO SIMILAR VIEW HAS BEEN TAKEN BY LD. CIT(A). 3. AS IT CAN BE SEEN FROM GROUNDS OF APPEAL THE ONL Y CASE OF THE DEPARTMENT IS THAT LD. CIT(A) WAS NOT RIGHT IN DIRECTING THE A O TO ALLOW CLAIM OF DEPRECATION RELYING ON THE DECISION OF HONBLE BOMBAY HIGH COUR T IN THE CASE OF CIT VS. INSTITUTE OF BANKING (SUPRA) IGNORING THE RATIO O F HONBLE SUPREME COURT DECISION IN THE CASE OF ESCORTS LTD. VS. UNION OF I NDIA, 199 ITR 43(SC). 4. NOTICE OF HEARING WAS SENT TO ASSESSEE, HOWEVER, NONE WAS PRESENT ON BEHALF OF THE ASSESSEE ON THE FIXED DATE OF HEARING . WE FOUND THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F HONBLE BOMBAY HIGH COURT IN THE CASE OF DIRECTOR OF INCOME TAX (EXEMPTION) V S. GKR CHARITIES (2013) 32 TAXAMAN.COM 208(BOM), IN WHICH SIMILAR ISSUE WAS RA ISED BY THE DEPARTMENT. THEREFORE, WE PROCEED TO DECIDE THE PRESENT APPEAL AFTER HEARING LD. DR. 5. LD. DR RELYING UPON THE GROUNDS OF APPEAL CONTEN DED THAT DECISION IN THE CASE OF CIT VS. INSTITUTE OF BANKING (SUPRA) HAS WRONGLY BEEN RELIED UPON BY LD. CIT(A) AND IT IS CONTRARY TO THE DECISION OF HO NBLE SUPREME COURT IN THE CASE OF ESCORTS LTD. VS. UNION OF INDIA (SUPRA). ITA NO.3478/MUM/2012 : ASST.YEAR 2003-04 ITA NO.3479/MUM/2012 : ASST.YEAR 2005-06 3 6. WE HAVE HEARD LD. DR AND HIS CONTENTIONS HAVE CAREFULLY BEEN CONSIDERED. AS POINTED OUT EARLIER SIMILAR QUESTIO N PUT UP BEFORE HONBLE BOMBAY HIGH COURT BY THE REVENUE IN THE AFOREMENTIO NED CASE OF DIRECTOR OF INCOME TAX (EXEMPTION) VS. GKR CHARITIES (SUPRA), WHEREIN FOLLOWING QUESTION WAS RAISED BY THE REVENUE FOR THE OPINION OF HONBL E BOMBAY HIGH COURT. (B) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE TRIBUNAL WAS CORRECT IN LAW IN IGNORING THE STAND O F THE REVENUE THAT ALLOWANCE OF DEPRECIATION ON THE ASSETS, THE COST OF WHICH HAS A LREADY BEEN ALLOWED AS A DEDUCTION ON ACCOUNT OF APPLICATION OF INCOME, WOUL D AMOUNT TO DOUBLE DEDUCTION WHICH IS LEGALLY NOT PERMISSIBLE IN VIEW OF THE JU DGMENT OF THE SUPREME COURT IN THE CASE OF ESCORTS LTD. VS. UNION OF INDIA, 199 IT R 443? THEIR LORDSHIPS HAVE ANSWERED THE SAID QUESTION AS UNDER: 3. SO FAR QUESTIONS (B) & (C) ARE CONCERNED, COUN SEL FOR THE PARTIES AGREE THAT THE ISSUE ARISING HEREIN ARE COVERED BY THE DECISION OF THIS COURT IN THE MATTER OF CIT V. INSTITUTE OF BANKING PERSONNEL SELECTION (2003) 264 ITR 110/ 131 TAXMAN 386 IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. IN THESE CIRCUMSTANCES, WE DO NOT SEE ANY REASON TO ENTERTAIN QUESTION (B) & (C). IN THIS VIEW OF THE SITUATION, AFTER HEARING LD. DR AND RESPECTFULLY FOLLOWING THE AFOREMENTIONED DECISION OF HONBLE BOMBAY HIGH COUR T IN THE CASE OF DIRECTOR OF INCOME TAX (EXEMPTION) VS. GKR CHARITIES (SUPRA ), WE FIND NO MERIT IN THE DEPARTMENTAL APPEALS AND THE SAME ARE DISMISSED. 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE REV ENUE ARE DISMISSED. ORDER PRONOUNCED ON THIS 3 RD JUNE, 2014. 2 + /01 34 03/06/2014 0 + ; SD/- SD/- (N.K.BILLAIYA) (I.P.BANSAL) $ $ $ $ / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 3 DATED : 3RD JUNE, 2014. VM. ITA NO.3478/MUM/2012 : ASST.YEAR 2003-04 ITA NO.3479/MUM/2012 : ASST.YEAR 2005-06 4 2 + )-! < !1- 2 + )-! < !1- 2 + )-! < !1- 2 + )-! < !1-/ COPY OF THE ORDER FORWARDED TO : 1. &' / THE APPELLANT 2. )*&' / THE RESPONDENT. 3. =() / THE CIT, MUMBAI. 4. = / CIT(A)-13, MUMBAI 5. !@; )- , , / DR, ITAT, MUMBAI 6. ;A B / GUARD FILE. 2 2 2 2 / BY ORDER, *!- )- //TRUE COPY// C CC C/ // /D E D E D E D E (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI