ADIT (E), New Delhi V. International Goudiya Vedanta Trust, New Delhi

ITA 3613/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65832 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 16-10-2012
• Assessment Year: 2009-2010
• Appeal Filed On: 10-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AROOP SINGH
• Assessee Lawyers: S K KHURANA
• Keywords: Depreciation
• Section: 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `C : NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI J.S. REDDY, ACCOUNTANT MEMBER ITA NO.3613/DEL./2012 (ASSESSMENT YEAR : 2009-10) ADIT(E), TC-11 , VS. INTERNATIONAL GOUDIYA VEDANT A TRUST, NEW DELHI. B-3, BLOCK OCF POCKET, NEAR MUSICAL FOUNTAIN, JANAKPURI, NEW DELHI. (PAN/GIR NO.AAATI2455H) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.K. KHURANA, CA REVENUE BY : SHRI AROOP SINGH, SR.DR ORDER PER U.B.S. BEDI, J.M. THIS APPEAL OF THE DEPARTMENT IS DIRECTED AGAINST T HE ORDER PASSED BY THE CIT (A)- XXI, NEW DELHI, DATED 12.04.2012, RELEVANT TO ASSES SMENT YEAR 2009-10, WHEREIN FOLLOWING TWO EFFECTIVE GROUNDS HAVE BEEN RAISED: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) HAS ERR ED IN ALLOWING DEPRECIATION AS APPLICATION OF INCOME AS THE ASSESSEE TRUST HAS ALREADY CLAIMED AS APPLICATION O F INCOME AT THE TIME OF ADDITION TO FIXED ASSETS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE CIT(A) HAS ERRED IN ALLOWING CORPUS FUND OF RS.2400/- IN A BSENCE OF ANY SPECIFIC DIRECTIONS FROM THE DONORS. 2. AT THE VERY OUTSET, LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT ISSUE RELATABLE TO FIRST GROUND IS SQUARELY COVERED IN FAVOUR OF THE A SSESSEE BY EARLIER ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008-09 AND BY FURNISHING THE COPY OF THE C I.T.A. NO.3613/DEL./2012 (A.Y. : 2009-10) 2 BENCH ORDER IN I.T.A. NO.2921/DEL./2011 DATED 02.12 .2011, IT WAS PLEADED FOR CONFIRMATION OF THE IMPUGNED ORDER IN THIS REGARD. 3. LD.DR COULD NOT CONTROVERT THIS FACTUAL ASPECT A ND RAISED NO OBJECTION IN CASE EARLIER DECISION IS FOLLOWED IN THIS CASE. 4. WE HAVE HEARD BOTH THE SIDES AND CONSIDERED THE MATERIAL ON RECORD AND FIND THAT SIMILAR ISSUE CAME UP FOR CONSIDERATION BEFORE THIS BENCH IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008-09 AND WHILE FOLLOWING HONBLE PUNJAB & HARYANA HIGH COURT DECISION, REPORTED IN 330 I.T.R. 21 IN THE CASE OF CIT VS. TINY TOTS EDUCATION SOCIETY, THIS BENCH HAS DECIDED THE ISSUE IN FAVOUR OF THE A SSESSEE AS PER PARA.5 OF ITS ORDER, WHICH READS AS UNDER: 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. TINY TOTS EDUCATION SOCIETY (SUPRA) HAS HELD THAT THE INCOME OF THE ASSESSEE, BEING EXEMPT, THE ASSESSEE WAS ONLY CLAIMING THAT DEPRECIATION SH OULD BE REDUCED FROM THE INCOME FOR DETERMINING PERCENTAGE OF FUNDS WHICH HA D TO BE APPLIED FOR THE PURPOSES OF THE TRUST AND AS SUCH, IT COULD NOT BE HELD THAT DOUBLE BENEFIT WAS GIVEN IN ALLOWING THE CLAIM FOR DEPRECIATION FOR CO MPUTING THE INCOME FOR PURPOSES OF SECTION 11 OF THE ACT. RESPECTFULLY FO LLOWING THE AFORESAID DECISIONS OF HONBLE PUNJAB & HARYANA HIGH COURT, WE UPHOLD T HE ORDER OF CIT(A) AND DIRECT THE ASSESSING OFFICER TO ALLOW DEPRECIATION AND REDUCE THE SAME FROM THE INCOME OF THE TRUST FOR DETERMINING THE PERCENTAGE OF FUNDS WHICH HAD TO BE APPLIED FOR THE PURPOSES OF THE TRUST. THE ORDER O F THE CIT(A) IS THUS UPHELD.. SO FOLLOWING THE SAID DECISION, WE UPHOLD THE ORDER OF CIT(A) IN THIS REGARD AND DISMISS THIS GROUND OF APPEAL. 6. AS REGARDS SECOND GROUND, THE SAME RELATES TO AD DITION OF RS.2400/- BEING ANNUAL MEMBERSHIP SUBSCRIPTION AND IN THE STATEMENT OF FAC TS, ASSESSEE SUBMITTED BEFORE CIT(A) AS UNDER: IT IS SUBMITTED THAT THE ANNUAL MEMBERSHIP SUBSCRI PTION RECEIVED BY THE APPELLANT ARE GIVEN UNDER RULE 3 SUBSCRIPTION TO THE RULES AND REGULATIONS OF THE SOCIETY, THUS UNDER A CONTRACT AND ARE NOT VOLU NTARY AND HENCE MAY NOT BE INCLUDED IN THE INCOME. IN SUPPORT OF THE SAME, TH E RELIANCE WAS PLACED ON THE JUDGMENT OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF TRUSTEES OF SHRI KOT HINDU STREE MANDAL VS. CIT (1994) 209 ITR 396 ( BOM.), WHERE IT WAS HELD THAT THE SUBSCRIPTION AMOUNT RECEIVED BY THE ASSES SEE TRUST WAS NOT LIABLE TO BE INCLUDED IN THE TOTAL INCOME OF THE TRUST FOR THE R ELEVANT ASSESSMENT YEARS. I.T.A. NO.3613/DEL./2012 (A.Y. : 2009-10) 3 7. CIT(A) WHILE CONSIDERING AND ACCEPTING THE PLEA OF THE ASSESSEE IN THE LIGHT OF THE BOMBAY HIGH COURT DECISION HAS ALLOWED THE CLAIM OF THE ASSESSEE BY OBSERVING AS UNDER: I HAVE GONE THROUGH THE FINDING OF THE ASSESSING O FFICER IN THE ASSESSMENT ORDER AND SUBMISSION OF THE LD.AR IN THIS REGARD. RELIA NCE ON THE CASE OF TRUSTEE OF SHRI KOT HINDU STREE MANDAL VS. CIT, 209 ITR 396(B OM.) IS APPRECIATED. GROUND NO.C IS ALLOWED. 8. AGAINST SUCH ORDER OF THE CIT(A), DEPARTMENT HAS COME UP IN APPEAL AND WHILE RELYING UPON THE ORDER OF THE ASSESSING OFFICER, IT WAS PLEADED FOR SETTING ASIDE THE ORDER OF CIT(A) AND RESTORING THAT OF THE ASSESSING OFFIC ER BECAUSE ANNUAL MEMBERSHIP SUBSCRIPTION RECEIVED BY THE ASSESSEE ARE GIVEN UND ER RULE 3 SUBSCRIPTION TO THE RULES AND REGULATION OF THE SOCIETY, THUS, UNDER A CONTRA CT AND ARE NOT VOLUNTARY IN NATURE AND SAME ARE NOT GIVEN WITH SPECIFIC DIRECTION AS MANDA TED BY SECTION 11(1D) OF THE ACT. THE MEMBER PAID THEIR MEMBERSHIP FEE JUST TO BE ASSOCIA TED WITH THE ASSESSEE AND THEIR CONTRIBUTION DOES NOT MANDATE ASSESSEE TO UTILIZE T HESE. THUS, IN A SPECIFIC MANNER, THERE IS NO MENTION IN THE RULES & REGULATION OF THE SOCI ETY WHICH INDICATE THAT THESE FUNDS HAVE TO BE UTILIZED IN ANY SPECIFIC MANNER. THEREF ORE, ASSESSING OFFICER IS JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE AND TO TREAT IT AS REVENUE IN NATURE, WHOSE ACTION SHOULD BE RESTORED. 9. LD.AR FOR THE ASSESSEE RELIED UPON THE ORDER OF CIT(A) AND PLEADED FOR ITS CONFIRMATION AS THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY BOMBAY HIGH COURT DECISION. 10. WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MA TERIAL ON RECORD AND FIND THAT ISSUE RELATABLE TO MEMBERS SUBSCRIPTION NOT TO TRE AT AS INCOME TO BE OF REVENUE IN NATURE IS COVERED IN FAVOUR OF THE ASSESSEE BY BOMBAY HIGH COURT DECISION WHICH HAS BEEN FOLLOWED BY CIT(A) AND NO CONTRARY MATERIAL OR ANY OTHER HIGHER COURTS DECISION HAS BEEN FILED. THEREFORE, WE SEE NO REASON TO INTERFE RE IN THE ORDER PASSED BY THE CIT(A) AND PLEA OF THE REVENUE IN THIS REGARD IS DISMISSED . I.T.A. NO.3613/DEL./2012 (A.Y. : 2009-10) 4 11. AS A RESULT, THE APPEAL FILED BY THE REVENUE GE TS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 31.10.2012. SD/- SD/- (J.S. REDDY) ACCOUNTANT MEMBER (U.B.S. BEDI ) JUDICIAL MEMBER DATED : OCT. 31, 2012 SKB COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-XXI, NEW DELHI. 5. CIT(ITAT) DEPUTY REGISTRAR, ITAT