All Saints School , Bulandshahr V. ITO (E), Ghaziabad

ITA 3588/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0047 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 14-05-2018
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SH. R.K PANDA, ACCOUNTANT MEMBER ITA NO.3587TO 3588/DEL/2018 ASSESSMENT YEAR: 2013-14 & 2014-15 M/S. ALL SAINTS SCHOOL 1, CHURCH BUILDING, COURT ROAD, OPP. EXHIBITION GROUND BULANDSHAHR C/O. M./S. RRA TAXINDIA D-28, SOUTH EXTENSION, PART-1, NEW DELHI -110049 PAN NO. AAATA8290N VS ITO (EXEMPTION), WARD GHAZIABAD (APPELLANT) (RESPONDENT) APPELLANT BY SH. SOMIL AGGARWAL, ADVOCATE DR. RAKESH GUPTA, ADVOCATE SHRI DEEPSH GARG, ADVOCATE RESPONDENT BY MS. RAKHI VIMAL, SR. DR DATE OF HEARING: 14/03/2019 DATE OF PRONOUNCEMENT: 29 /0 3 /201 9 ORDER PER R.K. PANDA, AM: 1. THE ABOVE TWO APPEALS FILED BY THE ASSESSEE ARE DIR ECTED AGAINST THE SEPARATE ORDERS DATED 27.03.2018 OF THE CIT(A), GHAZIABAD RELATING TO A.Y. 2013-14 AND 2014-15 RESP ECTIVELY. SINCE COMMON ISSUES ARE INVOLVED IN BOTH THESE APPE ALS, THEREFORE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2 ITA NO.3587/DEL/2018 ( A. Y. 2013-14) 2. GROUND NO.1 AND 2 BY THE ASSESEE READS AS UNDER :- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. AO IN NOT ALLOWING THE DEVELOPMENT FEES OF RS. 20,00,000/- PAID TO M/S. AG RA DIOCESAN TRUST ASSOCIATION, AGRA I.E. PARENT BODY O F ASSESSEE AS APPLICATION OF INCOME. 2. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, AC TION OF LD. CIT(A) IN CONFIRMING THE ACTION OF LD. AO IN NOT ALLOWING THE DEVELOPMENT FEES OF RS.20,00,000/- PAID TO M/S. AGRA DIOCEASN TRUST ASSOCIATION, AGRA AS APPLICATION OF I NCOME, IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE FACTS OF THE, CASE IN BRIEF, ARE THAT THE AS SESSEE IS A SOCIETY AND IS REGISTERED WITH THE REGISTRAR OF SOC IETY, U. P, UNDER SOCIETY REGISTRATION ACT. THE ASSESSEE SOCIETY HAS BEEN GRANTED REGISTRATION U/S 12 AA OF THE IT ACT BY THE CIT, ME ERUT VIDE ORDER DATED 28.05.2009. IT FILED ITS RETURN OF INCOME ON 06.11.2013 DECLARING NIL INCOME. THE AO DURING THE ASSESSMENT PROCEEDINGS OBSERVED THAT ASSESEE HAS DEBITED DEVELOPMENT FEES OF RS. 20,00,000/- TO THE INCOME AND EXPENDITURE ACCOUNT. HE, THEREFORE, ASKED THE ASSESSEE TO EXPLAIN THE NATURE OF PAYMENT OF DEVELOPMENT FEES OF RS. 20,00,000/- AND ALSO FURNIS H THE COPY OF AGREEMENT ENTERED INTO AND FURNISH THE DETAILS OF L AST FIVE YEARS. THE ASSESSEE FILED THE REQUISITE DETAILS ALONGWITH A COPY OF LETTER DATED 02.02.2016 BY AGRA DIOCESAN TRUST ASSOCIATION (ADTA IN 3 SHORT) A COMPANY REGISTERED U/S 25 OF COMPANY ACT 1 956 U/S 8 OF THE COMPANY ACT 2013 REGISTERED U/S 12A OF THE I T ACT AND IS PARENT BODY OF DIOCESE OF AGRA AND ITS ALL INSTITUT IONS. THE DIOCESE OF AGRA MANAGING PROPERTIES OF MANY COLLEGE S, JUNIOR COLLEGES, SCHOOLS, HOSPITALS, CHURCHES AND CHAPELS. THIS INCLUDES HINDI MEDIUM SCHOOLS AND VILLAGE SCHOOLS A LSO. ALL SAINTS SCHOOL BULANDSHAHR IS A UNIT OF AGRA DIOCES AN TRUST ASSOCIATION AND THE AMOUNT WAS TRANSFERRED U/S 12 A TO CONTRIBUTE THE FUNDS TO DEVELOP AND MAINTAIN OTHER INSTITUTIONS ECONOMICALLY. THE ASSESSEE ALSO ENCLOSED A LETTER OF ADTA WHICH THE AO HAS REPRODUCED IN THE ORDER AND WHICH READS AS UNDER :- THIS IS TO KINDLY BRING TO YOUR NOTICE THAT AGRA DIOCESAN TRUST ASSOCIATION (ADTA) A REGISTERED COMPA NY U/S 25 COMPANY ACT, 1956 COMPANY ACT, 1956 U/S 8 COMPAN Y ACT, 2013 AND REGISTERED U/S 12 A OF THE INCOME TAX ACT AND IS PARENT BODY OF DIOCESE OF AGRA AND ITS ALL INSTI TUTION. ALL SANTS SCHOOL, BULANDSHAHR IS ALSO UNDER THE AG RA DIOCESAN TRUST ASSOCIATION OF DIOCESE OF AGRA HAVIN G INDEPENDENT MANAGING COMMITTEE. WE DO HEREBY CERTIFY THAT A SUM OF RS.20,00,000/- WAS SENT / GIVEN BY ALL SAINT SCHOOL BULANDSHAHR DURING F. Y.2012-13 AS DEVELOPMENT FEES / CONTRIBUTION TO THE PARENT BODY FOR THE PURPOSE OF FURTHERANCE OF MAIN OBJECT OF THE TRUST. IT IS FURTHER CERTIFIED THAT WE HAVE UTILIZED THE S AID AMOUNT FOR THE FURTHERANCE OF MAIN OBJECT (EDUCATION) OF THE T RUST. 4. HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE ARGUMENTS ADVANCED BY THE ASSESSEE. HE OBSERVED TH AT THERE IS NO AGREEMENT AND THE MONEY IS SIPHONED OFF EVERY YEAR IN THE SHAPE OF 4 DEVELOPMENT FEE AND ASSESEE HAS TAKEN THE BENEFITS OF APPLICATION OF INCOME AGAINST THE TOTAL RECEIPTS. HE ACCORDINGLY REJECTED THE CLAIM OF DEVELOPMENT FEES OF RS.20 LACS AS APPLICATION OF INCOME. 5. IN APPEAL THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE AO BY OBSERVING AS UNDER :- 7.3 GROUND NO. 2: THE APPELLANT HAS CHALLENGED ADDITION OF RS. 20,00,000/- MADE BY THE AO DISALLOWING CONTRIBUTION/ DEVELOPMEN T FEE TO THE PARENT BODY OF APPELLANT DULY REGISTERED U/S 12AA. DURING THE COURSE OF APPELLATE PROCEEDINGS IT HAS BEEN SUB MITTED THAT APPELLANT HAS DECLARED TOTAL RECEIPTS DURING THE YEA R OF RS. 2,76,74,483/-. DURING THE YEAR APPELLANT HAS DONATED RS. 20,00,000/- TO ITS PARENT BODY AGRA DIOCESAN TRUST ASSOCIATION (ADTA) WHICH IS A SEPARATELY REGISTERED BODY UNDER 12AA. 7.3.1 EXAMINATION OF FACTS REVEALS THAT THE PAYMENT HAS B EEN MADE WITHOUT AGREEMENT AND ADTA IS A COMPANY REGISTERED UN DER COMPANY'S ACT WHICH OLDING TRUST OF DIOCESE OF AGRA AND MANAGING PROPERTIES OF MANY COLLEGES, SCHOOLS, CHURCHES ETC. DURING THE COURSE OF APPELLATE PROCEEDINGS IT HAS BEEN ARGUED THAT THE A BOVE SAID DONATION OR CONTRIBUTION SHOULD BE ALLOWED AS IT IS FOR THE SAM E PURPOSES AS THAT OF APPELLANT AND PLACED RELIANCE ON CIT VS THANTHI TRUST (SC) (1999) 239 ITR 502, CIT VS SHRI AUROBINDO MEMORIAL FUNDS SOCIETY MADRAS 162 CTR 254, CIT VS SHRI RAM MEMORIAL FOUNDATION (DEL.) (200 4) 140 TAXMAN 263, CIT VS H.P.S. SOCIAL SOCIAL WELFARE FOUNDATION (DEL.) (2011) 198 TAXMAN 63. IT IS NOTED THAT NEITHER DURING APPELLATE PROCEEDINGS NOR DURING ASSESSMENT PROCEED INGS APPELLANT COULD PROVE THAT OBJECTIVE OF ADTA IS SAM E AS THAT OF 5 APPELLANT AND THE DONATION IS TOWARDS CORPUS OF THE ADTA. THE MEMORANDUM OF ASSOCIATION OF ADTA REVEALS THAT ADTA WORKS FOR FURTHERANCE OF RELIGIOUS AND CHARITABLE WORK OF CHUR CH OF NORTH INDIA AND IN MANAGEMENT OF PROPERTY ETC. THUS CASE LAWS R ELIED UPON BY THE APPELLANT ARE NOT APPLICABLE TO THE FACTS AND CIRCU MSTANCES OF APPELLANT'S CASE. KEEPING IN VIEW ABOVE FACTS THE D ONATION GIVEN BY APPELLANT TO ADTA CANNOT BE TREATED APPLICATION OF INCOME WITHIN THE PROVISIONS OF SECTION 11. THUS THIS GROUND OF APPEAL IS DISMISSED. 6. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 7. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET S UBMITTED THAT THE ASSESSEE HAS BEEN PAYING REGULARLY THE DEVELOPM ENT FEES/ CONTRIBUTION OVER THE YEARS AND NO SUCH DISALLOWANC E HAS BEEN MADE IN THE PAST. REFERRING TO PAGE 244 OF THE PAP ER BOOK, THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDING ON 31.03.2010 AND SUBMITTED THAT AN AMOUNT OF RS.10 LACS HAS BEEN DEBITED TO THE INCOME AND EXPENDITURE ACCOUNT AS DEVELOPMENT F EES TO ADTA. REFERRING TO PAGE 254 OF THE PAPER BOOK HE DREW THE ATTENTION OF THE BENCH TO THE DEBIT OF DEVELOPMENT FEES TO ADTA OF R S. 12 LACS FOR THE YEAR ENDING ON 31.03.2011. HE SUBMITTED THAT FO R BOTH THE ASSESSMENT YEARS NO DISALLOWANCE HAS BEEN MADE. RE FERRING TO THE ASSESSMENT ORDER PASSED A. Y.2012-13 HE SUBMITTED T HAT NO SUCH DISALLOWANCE HAS BEEN MADE IN THE ORDER PASSED U/S 143 (3) DATED 19.01.2015, ALTHOUGH AN AMOUNT OF RS. 15 LACS HAS BEEN DEBITED TO THE INCOME AND EXPENDITURE ACCOUNT TOWARDS DEVELOPM ENT FEES PAID TO ADTA FOR THE YEAR ENDING 31.03.2012. REFERRING T O THE COPY OF THE 6 ASSESSMENT ORDER FOR A. Y. 2011-12 COPY OF WHICH IS PLACED AT PAGE 257 OF THE PAPER BOOK HE SUBMITTED THAT ASSESSING O FFICER IN THE ORDER U/S 143 (3) ON 30.01.2014 HAS NOT MADE ANY SU CH DISALLOWANCE. HE SUBMITTED THAT SINCE IN THE PRECED ING AND SUBSEQUENT YEARS NO SUCH DISALLOWANCE HAS BEEN MADE BY THE ASSESSING OFFICER TOWARDS PAYMENT OF DEVELOPMENT FE ES TO ADTA BY THE ASSESSEE, THEREFORE, FOLLOWING THE RULE OF CONS ISTENCY, NO DISALLOWANCE IS CALLED FOR. FURTHER NO AMOUNT HAS B EEN PAID FOR THE BENEFIT OF ANY PERSON SPECIFIED U/S 13 (3) OF THE I T ACT PURSUANT TO WHICH BENEFIT TO SECTION 11 AND 12 MAY BE DENIED BY THE ASSESSING OFFICER. 8. SO FAR AS CONTENTION OF THE LOWER AUTHORITY THAT CONTRIBUTION / DONATION TO ADTA HAS BEEN MADE WITHOUT ANY PRIOR AG REEMENT IS CONCERNED, HE SUBMITTED THAT DONATIONS ARE NEVER MA DE WITH ANY PRIOR AGREEMENT AND IS SOLELY GOVERNED BY THE WILL AND CAPABILITIES OF THE DONOR. THEREFORE, THE CONTENTION OF THE ASSE SSING OFFICER/CIT(A) IS ARBITRARY AND WITHOUT ANY MERIT. HE ALSO RELIED ON CBDT INSTRUCTION NO.1132 REGARDING AVAILABILITY OF EXEMPTION IN THE HANDS OF CHARITABLE TRUSTS OF AMOUNTS PAID AS DONAT ION TO OTHER CHARITABLE TRUST AND THE DECISION OF HONBLE GUJARA T HIGH COURT IN THE CASE OF CIT VS. SARLADEVI SARA BHAI TRUST NO.2 REPORTED 172 ITR 698. 9. THE LD. DR ON THE OTHER HAND HEAVILY RELIED ON T HE ORDER OF THE ASSESSING OFFICER AND CIT(A). 10. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. I FIND THE ASSESSING OFFICER REJECTED THE CLAIM OF DEVELOPMENT FEES OF R S.20 LACS PAID TO ADTA AS APPLICATION OF INCOME ON THE GROUND THAT TH E MONEY HAS 7 BEEN SIPHONED OFF EVERY YEAR AND FURTHER THERE IS N O SUCH AGREEMENT BETWEEN THE ASSESSEE AND ADTA. I FIND TH E LD. CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER WHICH HA S BEEN REPRODUCED IN THE PRECEDING PARAGRAPH. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE IS P AYING SUCH DEVELOPMENT FEES TO ADTA SINCE LAST SO MANY YEARS A ND THE ASSESSING OFFICER IN THE PAST AS WELL AS SUBSEQUENT YEARS HAS ACCEPTED SUCH EXPENDITURE AS APPLICATION OF INCOME IN THE ORDERS PASSED U/S 143 (3). FURTHER IT IS ALSO HIS SUBMISSI ON THAT DONATIONS ARE NEVER MADE WITH PRIOR AGREEMENT AND IT IS GOVER NED BY THE WILL/ CAPABILITIES OF THE DONOR. I FIND MERIT IN THE ABO VE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE. AS MENTIONED EARLIER THE ASSESSING OFFICER IN THE ORDERS PASSED U/S 143 (3) FOR A. Y. 2011-12 AND 2012- 13 HAS NOT MADE ANY SUCH DISALLOWANCE TOWARDS THE D EVELOPMENT FEES TO ADTA. FURTHER IN THE SUBSEQUENT YEARS ALSO NO SUCH DISALLOWANCE HAS BEEN MADE AS ARGUED BY THE LD. COU NSEL FOR THE ASSESSEE AND NOT CONTROVERTED BY THE LD. DR. THERE FORE, FOLLOWING THE RULE OF CONSISTENCY THE DISALLOWANCE MADE BY TH E ASSESSING OFFICER AND UPHELD BY THE CIT(A) CANNOT BE SUSTAINE D. FURTHER I FIND MERIT IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT DONATIONS ARE NEVER MADE WITH PRIOR AGREEMENT AND IT IS SOLELY GOVERNED BY THE WILL AND CAPABILITIES OF THE DONOR. IT IS ALSO SEEN THAT NO AMOUNT HAS BEEN PAID FOR THE BENEFIT OF ANY PERSON SPECIFIED U/S. 13 (3) OF THE IT ACT FOR WHICH BENEF IT OF SECTION 11 AND 12 MAY BE DENIED TO THE ASESSEE. FURTHER THE CBDT VIDE INSTRUCTION NO.1132 DATED 05.01.1978 HAS HELD THAT THE PAYMENT OF A SUM BY ONE CHARITABLE TRUST TO ANOTHER FOR UTILIZ ATION BY THE DONEE TRUST TOWARDS ITS CHARITABLE OBJECTS IS PROPER APPL ICATION OF INCOME 8 FOR CHARITABLE PURPOSE IN THE HANDS OF THE DONEE TR UST, AND THE DONOR TRUST WILL NOT LOSE EXEMPTION U/S 11 OF THE I T ACT, 1961 MERELY BECAUSE THE DONEE TRUST DID NOT SPENT THE DO NATION DURING THE YEAR OF RECEIPT ITSELF. IN VIEW OF THE ABOVE D ISCUSSION I HOLD THAT THE ORDER OF THE CIT(A) UPHOLDING THE ACTION OF THE ASSESSING OFFICER IS NOT JUSTIFIED. ACCORDINGLY I SET ASIDE THE ORDE R OF THE CIT(A) AND GROUNDS OF APPEAL NO. 1 AND 2 OF THE ASSESSEE ARE A LLOWED. 11. GROUND NO.3 OF THE ASSESSEE READS AS UNDER :- 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF T HE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT DEL ETING THE DISALLOWANCE OF RS. 1,22,738/- FULLY MADE BY LD. AO ON ACCOUNT OF EPF CONTRIBUTION OF EMPLOYEES U/S 36(L)(VA) RWS 2(24 )(X) AND FURTHER ERRED IN SUSTAINING THE SAME TO THE EXTENT OF RS.42,6 14/-. 12. AFTER HEARING BOTH THE SIDES I FIND THE ASSESSI NG OFFICER DISALLOWED AN AMOUNT OF RS.1,39,581/- U/S 36 (I) (V A) R.W.S. 2 (24) (X) ON ACCOUNT OF DELAY IN DEPOSIT OF EMPLOYEES PRO VIDENT FUND. BEFORE THE CIT(A) IT WAS ARGUED THAT THE PROVISIONS OF SECTION 36 (1) (VA) R.W.S. 2 (24) (X) ARE NOT APPLICABLE TO TRUST. HOWEVER, THE LD. CIT(A) WAS NOT SATISFIED WITH THE ARGUMENTS ADVANCE D BY THE ASSESSEE AND UPHELD THE ACTION OF THE ASSESSING OFF ICER ON THE GROUND THAT ALTHOUGH THE PAYMENTS HAVE BEEN MADE BE FORE THE DUE DATE OF FILING OF THE RETURN, HOWEVER, THEY WERE PA ID AFTER THE DUE DATE PRESCRIBED UNDER THE EPF ACT. IT IS THE SUBM ISSION OF THE LD. COUNSEL FOR THE ASSEESSEE THAT IN VIEW OF THE DECIS ION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. ALOM EXTRUSION S REPORTED IN 319 ITR 306 AND VARIOUS OTHER DECISIONS PAYMENTS MA DE PRIOR TO DUE DATE OF FILING OF RETURN AS PRESCRIBED U/S. 139 (1) CANNOT BE 9 DISALLOWED U/S. 36 (1) (VA) R.W.S. 2 (24) (X). SINC E IN THE INSTANT CASE ADMITTEDLY THE DEPOSITS TOWARDS EPF HAS BEEN DEPOSI TED PRIOR TO THE DUE DATE OF FILING OF RETURN U/S. 139 (1) THERE FORE, FOLLOWING THE CONSISTENT VIEW OF THE COORDINATE BENCHES OF THE TR IBUNAL I AM OF THE CONSIDERED OPINION THAT NO DISALLOWANCE U/S. 36 (1) (VA) R.W.S. 2 (24) (X) CAN BE MADE. THE GROUND RAISED BY THE ASS ESSEE IS ACCORDINGLY ALLOWED. 13. GROUND NO.4 OF THE APPEAL READS AS UNDER :- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT ALL OWING THE BENEFIT OF DEEMED APPLICATION OF RS.2,81,769/- ON ACCOUNT OF INTEREST ACCRUED BUT NOT RECEIVED UNDER CLAUSE 2 OF EXPLANATIO N TO SECTION 11 (1) OF INCOME TAX ACT, 1961. 14. AFTER HEARING BOTH THE SIDES I FIND THE ASSESSI NG OFFICER DID NOT ALLOW THE BENEFIT OF DEEMED APPLICATION OF RS.2,81, 769/- ON ACCOUNT OF INTEREST ACCRUED BUT NOT RECEIVED UNDER CLAUSE 2 OF EXPLANATION TO SECTION 11 (1) OF THE IT ACT, 1961. IN APPEAL THE LD. CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASESSEE THAT AN AMOUNT OF R S.2,81,769/- IS THE INTEREST ACCRUED ON FDR. HOWEVER, AS PER THE F ORM NO.10B THE ASSESSEE HAS EXERCISED UNDER CLAUSE 2 OF EXPLANATIO N U/S. 11 (1) OF OF THE IMPUGNED AMOUNT. THEREFORE, THE AMOUNT OF AC CRUED INTEREST OF FDR AMOUNTING TO RS.2,81,769/- IS THE INCOME DER IVED DURING THE IMPUGNED ASSESSMENT YEARS BUT NOT RECEIVED SHAL L BE TREATED AS DEEMED TO BE APPLIED. I FIND MERIT IN THE ABOVE ARG UMENTS OF THE LD. COUNSEL FOR THE ASSESSEE. A PERUSAL OF THE COMPUTA TION OF INCOME FOR THE A.Y.2013-14, COPY OF WHICH IS PLACED AT PAG E 110 OF THE 10 PAPER BOOK, SHOWS THAT THE NET SURPLUS OF RS.73,93, 794/- INCLUDES THE INCOME OF RS.2,81,769/- WHICH HAS NOT ACTUALLY BEEN RECEIVED. THE ASSESSEE IN ITS FORM NO.10B IN CLAUSE NO.2 OF A NNEXURE CONTAINING STATEMENT OF PARTICULARS, COPY OF WHICH IS PLACED AT PAGE 112 OF THE PAPER BOOK, HAS CLEARLY MENTIONED THAT T HE ASSESSEE HAS EXERCISED THE OPTION OF CLAUSE 2 OF THE EXPLANATION TO SECTION 11 (1) ACCORDING TO WHICH THE AMOUNT OF INCOME OF RS.2,81, 769/- IS THE INCOME DEEMED TO HAVE BEEN APPLIED TO CHARITY/ RELI GIOUS PURPOSE IN INDIA. SINCE THE AMOUNT OF INTEREST ACCRUED BUT NOT RECEIVED AMOUNTING TO RS.2,81,769/- IS THE DEEMED APPLICATIO N OF INCOME UNDER CLAUSE 2 OF EXPLANATION TO SECTION 11 (1) OF THE IT ACT, 1961 THEREFORE, I AM OF THE CONSIDERED OPINION THAT THE LD. CIT(A) IS NOT JUSTIFIED IN DENYING THE BENEFIT OF DEEMED APPLICAT ION. THE GROUND NO. 4 RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED . 15. THE GROUND NO. 5 OF THE APPEAL IS AS UNDER :- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF T HE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT ALLO WING THE DEPRECIATION OF RS. 18,38,087/- AS APPLICATION OF IN COME. 16. THE ASSESSEE HAS ALSO TAKEN THE FOLLOWING ADDIT IONAL GROUNDS WHICH ARE AS UNDER :- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) OUGHT TO HAVE CONSIDERED INCOME AFTER DEPREC IATION IN VIEW OF SEVERAL JUDICIAL DECISIONS. 2. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, DEP RECIATION OUGHT TO HAVE BEEN DEDUCTED FROM THE AMOUNT OF INCOME. 11 17. REFERRING TO THE DECISION OF HONBLE SUPREME CO URT IN THE CASE OF NTPC LIMITED VS. CIT REPORTED IN 229 ITR 383 AND THE DECISION IN THE CASE OF SINGHAD TECHNICAL EDUCATION SOCIETY REPORTED IN 397 ITR 344, HE SUBMITTED THAT SINCE THE ABOVE GROUNDS DO NOT REQUIRE FRESH FACTS TO BE INVESTIGATED AND GO TO THE ROOT O F THE MATTER, THEREFORE, THE SAME SHOULD BE ADMITTED. 18. AFTER HEARING BOTH THE SIDES AND CONSIDERING TH E FACT THAT NO FRESH FACTS ARE REQUIRED TO BE INVESTIGATED, THE AD DITIONAL GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 19. THE FACTS OF THE CASE, IN BRIEF ARE THAT THE AS SESSING OFFICER DID NOT ALLOW DEPRECIATION OF 18,38,087/- BEING THE DEP RECIATION CLAIMED FOR THE YEAR AS APPLICATION OF INCOME. ALTH OUGH THIS GROUND HAS NOT BEEN RAISED BEFORE THE CIT(A), HOWEVER IN V IEW OF THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE WHICH HAS BEEN ADMITTED, WE PROCEED TO ADJUDICATE THE SAME. THE HONBLE SUPR EME COURT IN THE CASE OF CIT VS. RAJASTHAN & GUJARATI CHARITABLE FOUNDATION POONA REPORTED IN 402 ITR 441 HAS HELD THAT INCOME OF TRUST WAS REQUIRED TO BE COMPUTED U/S 11 ON COMMERCIAL PRINCI PLES AFTER PROVIDING FOR ALLOWANCE FOR NORMAL DEPRECIATION AND DEDUCTION THEREOF FROM GROSS INCOME OF TRUST. SINCE, THE ISS UE STANDS DECIDED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HONBL E SUPREME COURT CITED (SUPRA) THEREFORE, GROUND NO. 5 OF APPEAL RAI SED BY THE ASSESSEE AND ADDITIONAL GROUNDS RAISED BY THE ASSES SEE ARE ALLOWED. ITA NO.3588/DEL/2018 ( A. Y. 2014-15) 20. GROUND NOL.1 AND 2 OF THE APPEAL READS AS UNDER :- 12 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF T HE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRM ING THE ACTION OF LD. AO IN NOT ALLOWING THE DEVELOPMENT FEES OF RS.2 5,00,000/- PAID TO M/S AGRA DIOCESAN TRUST ASSOCIATION, AGRA I.E. P ARENT BODY OF ASSESSEE AS APPLICATION OF INCOME. 2. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTI ON OF LD. CIT(A) IN CONFIRMING THE ACTION OF LD. AO IN NOT ALL OWING THE DEVELOPMENT FEES OF RS.25,00,000/- PAID TO M/S AGRA DIOCESAN TRUST ASSOCIATION, AGRA AS APPLICATION OF INCOME, IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 21. AFTER HEARING BOTH THE SIDES. I FIND THE ABOVE GROUNDS ARE IDENTICAL TO GROUND NO. 1 AND 2 IN ITA NO.3587/DEL/ 2018 FOR A. Y. 2013-14. I HAVE ALREADY DECIDED THE ISSUE AND THE GROUNDS HAVE BEEN ALLOWED. FOLLOWING SIMILAR REASONINGS THE ABO VE TWO GROUNDS OF THE APPEAL OF ASSESSEE ARE ALLOWED. 22. GROUND NO. 3 OF APPEAL READS AS UNDER :- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF T HE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT ALL OWING THE BENEFIT OF DEEMED APPLICATION OF RS.4,28,390/- ON ACCOUNT OF INTEREST ACCRUED BUT NOT RECEIVED UNDER CLAUSE 2 OF EXPLANAT ION TO SECTION 11 (1) OF INCOME TAX ACT, 1961. 23. AFTER HEARING BOTH THE SIDES. I FIND THE ABOVE GROUND IS IDENTICAL TO GROUND NO.4 IN ITA NO.3587/DEL/2018 FO R A. Y. 2013- 14. I HAVE ALREADY DECIDED THE ISSUE AND THE GROUN D HAS BEEN ALLOWED. FOLLOWING SIMILAR REASONINGS THE ABOVE GR OUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 13 24. GROUND NO.4 BY THE ASSESSEE AND THE ADDITIONAL GROUNDS READ AS UNDER :- 4. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT ALL OWING THE DEPRECIATION OF RS.89,94,945/- AS APPLICATION OF INCO ME. ADDITIONAL GROUNDS :- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF T HE CASE, LD. CIT(A) OUGHT TO HAVE CONSIDERED INCOME AFTER DEP RECIATION IN VIEW OF SEVERAL JUDICIAL DECISIONS. 2. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, DEPR ECIATION OUGHT TO HAVE BEEN DEDUCTED FROM THE AMOUNT OF INCOME . 25. AFTER HEARING BOTH THE SIDES, I FIND THE ABOVE GROUNDS ARE IDENTICAL TO GROUND NO. 5 AND ADDITIONAL GROUNDS IN ITA NO.3587/DEL/2018 FOR A. Y. 2013-14. I HAVE ALREADY DECIDED THE ISSUE AND THE GROUNDS HAVE BEEN ALLOWED. FOLLOWING SIMILAR REASONINGS THE ABOVE GROUND NO.5 AND ADDITIONAL GRO UNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED. 26. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.03.2019. SD/- (R.K PANDA) ACCOUNTANT MEMBER *NEHA* 14 DATE:- 29.03.2019 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 18.03.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 29.03.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER