ITO (Exemptions), New Delhi V. M/s. Institute of Marketing & Management, New Delhi

ITA 3631/DEL/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6206 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 04-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Charitable institution; Capital expenditure
• Section: 143(3); 12A; 195; 147; 148; 12; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRI +98 BUNAL DELHI BENCH : A , NEW DELHI BEFORE SHRI AMIT SHUKLA , JUDICIAL M EMBER AND SH RI O.P. KANT , ACCOUNTANT MEMBER ITA NO .3631 & 3632 /DE L/ 2 015 ASSESSMENT YEAR S : 2008 - 09 & 2010 - 11 ITO(EXEMPTIONS), WARD - 1(2), PRATYAKSH KAR BHAWAN, DR. SHYAMA PRASAD MUKHERJEE CIVIC CENTRE, JAWAHAR LAL NEHRU MARG, NEW DELHI VS. INSTITUTE OF MARKETING & MANAGEMENT, B - 11, QUTAB INSTITUTIONAL AREA, NEW DELHI PAN : AAAAI0016R (APPELLANT) (RESPONDENT) APPELLANT BY SHRI PRAVEEN KUMAR, SR.DR RESPONDENT BY SHRI AJAY BAHETI, CA ORDER PER O.P. KANT, A .M. : THESE TWO APPEAL S BY THE R EVENUE ARE DIRECTED AGAINST TWO SEPARATE ORDER S DATED 24/03/2015 PASSED BY THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) - 40, NEW DELHI [IN SHORT THE LD. CIT(A) ] FOR ASSESSMENT YEAR 2008 - 09 AND 2010 - 11. AS COMMON ISSUES - IN - DISPUTE ARE INVOLVED IN BOTH THE APPEALS, SAME WERE HEARD TOG ETHER AND DISPOSED OFF BY WAY OF THIS CONSOLIDATED ORDER FOR CONVENIENCE AND AVOID REPETITION OF COMMON DISCUSSION. DATE OF HEARING 15.01.2019 DATE OF PRONOUNCEMENT 25.01.2019 2 ITA NO S . 3631 & 3632/DEL/2015 ITA NO.3631/DEL/2015 FOR AY:2008 - 09 2. FIRST, WE TAKE APPEAL HAVING ITA NO.3631/DEL/2015 FOR ASSESSMENT YEAR 2008 - 09. THE GROUNDS RAISED IN APPEAL FOR THE ASSESSMENT YEAR 2008 - 09 ARE REPRODUCED AS UNDER: 1 . ON THE FACTS AND I N THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD . CLT(A) HAS ERRED IN ALLOWING THE BENEFIT OF SECTION 11 & 12 OF THE ACT IGNOR I NG THAT THE ACTIVITIES OF THE TRUST WERE NOT WITHIN THE PURVIEW OF SECTION 2(15) OF THE INCOME TAX ACT, 1961 DURING THE YEAR. 2 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD . CIT (A) HAS ERRED IN D I RECT I NG THE AO TO ALLOW BENEFITS OF SECTION 11 & 12 OF THE L . T ACT , IGNOR I NG THE FACT THE ASSESSEE WAS INVOLVED I N BUSINESS ACTIVITY WITHIN THE MEANING OF SECTION 2(15) OF THE INCOME TAX ACT , 1961 DUR I NG THE YEAR UNDER CONSIDERATION . 3 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD . CIT (A ) HAS ER R ED I N DIREC TING THE AO TO ALLOW BENEFITS OF SECTION 11 & 12 OF THE L . T ACT, I GNORING THE FACT THE ASSESSEE HAS V I OLATED THE PROVISION OF SECTION 13 (1) (C) OF THE ACT BY PROV I DING THE F I NANCIAL BENEFIT TO THE PERSONS SPECIF I ED U/S 13(3) OF THE ACT . 4 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD . CIT(A) HAS ERRED IN ALLOWING THE BENEFIT OF SECTION 11 & 12 OF THE ACT IGNORING THE PROVISION OF SECTION 13(1) WHICH PROVIDE THAT EVEN IF THERE IS A SINGLE INSTANCE OF VIOLATION OF SECTION 13(1) , T HE TRUST WILL LOSE THE EXEMPTION IN RESPECT OF ENTIRE INCOME. 5 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD . CIT (A) HAS ERRED I N ALLOWING THE CLAIM OF DEPRECIATION OF RS . 3,54,67,912 / - TO THE ASSESSEE IGNORING THE FACT THAT THE ASSESSEE HAD CLAIMED THE AMOUNT INCURRED ON PURCHASE OF ASSETS IN EARLIER YEARS AS APPLICATION OF INCOME, ON WHICH DEPRECIATION IS CLAIMED NOW AND FURTHER ALLOWANCE OF DEPRECIAT I ON WILL BE TANTAMOUNT TO DOUBLE DEDUCTION . 6 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW , THE LD . CIT(A) HAS ERRED I N ALLOWING THE CLAIM OF DEPRECIATION OR RS . 3,54,67,912/ - TO THE ASSESSEE IN VIEW OF THE RECENT DECIS I ON OF THE HON'BLE DELHI HIGH COURT IN THE CAS E OF DIT(E) VS. CHARANJIV CHARITABLE TRUST DATED 18 . 03 . 2014 . 7 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED I N DELETING THE ADDITION OF RS . 2,26,522/ - MADE ON ACCOUNT OF PERSONAL USE OF CAR. 8 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW , THE LD . CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS . 1,55,00,000/ - MADE UNDER THE HEAD EXCESS ADMISSION OF 31 STUDENTS . 9 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE L D . CLT (A) HAS ERRED IN DELETING THE ADDITION OF RS . 1 , 44,97,952/ MADE ON ACCOUNT OF TRAINING EXPENSES BEING PERSONAL IN NATURE . 3 ITA NO S . 3631 & 3632/DEL/2015 3 . AT THE OUTSET, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT ALL THE GROUNDS RAISED BY THE R EVENUE IN THE APPEAL ARE COVERED IN FAVOUR OF TH E ASSESSEE BY THE ORDER OF THE T RIBUNAL IN ITS OWN CASE FOR ASSESSMENT YEAR 2009 - 10. HE SUBMITTED THAT APPEAL S FILED BY THE DEPARTMENT AGAINST THE SAID ORDER BEFORE THE HON BLE HIGH COURT AND HON BLE SUPREME COURT HAVE BEEN DISMISSED. THE LD. COUNSEL ALSO SUBMITTED A CHART OF VARIOUS GROUNDS COVERED BY THE RELEVANT PARAGRAPH OF THE ORDER OF THE ITAT FOR ASSESSMENT YEAR 2 009 - 10 . THE LD. DR, THOUGH RELIED ON THE ORDER OF THE ASSESSING OFFICER, HE COULD NOT CONTROVERT THE FACT OF VARIOUS GROUNDS O F THE APPEAL COVERED BY THE ORDER OF THE T RIBUNAL FOR ASSESSMENT YEAR 2009 - 10. 4 . WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE AS SESSEE IS A SOCIETY REGISTERED UNDER THE S OCIETIES R EGISTRATION A CT, 1860 AND ALSO REGISTERE D UNDER SECTION 12AA(1) OF THE INCOME - TAX A CT, 1961 (IN SHORT THE A CT ) V IDE ORDER DATED 4/4/1975 AS A CHARITABLE SOCIETY. THE ASSESSEE IS RUNNING EDUCATIONAL INSTITUTION FOR BBA AND MBA COURSES, WHI CH ARE AFFILIATED WITH AICTE (A LL INDIA COUNCIL OF T ECHNICAL E DUCATION ). IN ASSESSMENT YEAR 2009 - 10 , THE EXEMPT ION UNDER SECTION 11(1) OF THE A CT WAS DENIED ON THE GROUND THAT THE ASSESSEE WAS CHARGING HUGE FEES AND ASSESSEE HAD ALSO TAKEN EXCESS ADMISSION OF THE STUDENTS. THE ASSESSMENT YEAR UNDER CON SIDERATION WAS REOPENED BY THE ASSESSING OFFICER BY WAY OF ISSUE OF NOTICE UNDER SECTION 148 OF THE A CT ON THE GROUND THAT IN THE ASSESSMENT YEAR 2009 - 10, THE ASSESSEE HAS BEEN DENIED EXEMPT ION UNDER SECTION 11(1) OF THE A CT. IN THE ASSESSMENT COMPLETED ON 28/03/2013 UNDER SECTION 147 READ WITH SECTION 4 ITA NO S . 3631 & 3632/DEL/2015 143 OF THE A CT THE ASSESSING OFFICER COMP UTED NET TAXABLE INCOME OF RS. 4,20,46,945/ - . BEFORE THE LD. CIT(A), THE ASSESSEE CONTENDED THAT IT IS NOT INVOLVED IN ANY TRADE, COMMERCE AND BUSINESS AND THE MISCHIEF OF THE PROVI SION OF SECTION 2(15) OF THE A CT WAS NOT APPLICABLE IN THE CASE OF ASSESSEE . T HE ASSESSEE SUBMITTED THAT IT WAS ACTUALLY IN THE FIELD OF EDUCATION AND IMPARTING THE EDUCATION IN THE FORM OF BBA AND MBA COURSES. THE LD. CIT(A), AFTER C ONSIDERIN G THE DECISION OF THE T RIBUNAL IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEA R 2009 - 10 AND ALSO THE DECISION OF THE HON BLE DELHI HIGH COURT I N THE CASE OF INDIA TRADE P ROMOTION ORGANISATION VS. DGIT , 53 TAXMANN.COM 404 ( DELHI ) (ORDER DATED 22/01/2015) ALL OWED THE APPEAL OF THE ASSESSEE, DELETING ALL THE ADDITIONS MADE BY THE ASSESSING OFFICER. AGGRIEVED, THE R EVENUE IS IN APPEAL BEFORE THE T RIBUNAL , RAISING THE GROUNDS AS REPRODUCED ABOVE. 5 . THE CHART FURNISHED BY THE LD. COUNSEL OF THE ASSESSEE STATING VARIOUS GROUNDS COVERED BY THE RESPECTIVE PARAGRAPHS OF THE ORDER O F THE TRIBUNAL IN ITA NO. 4182/D EL/2013 FOR ASSESSMENT YEAR 2009 - 10 IS REPRODUCED AS UNDER: GROUNDS GROUNDS OF APPEAL AY 2008 - 09 COVERED IN AY 2009 - 10 ORDER OF ITAT GROUND 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE BENEFIT OF SECTION 11 & 12 OR THE ACT IGNORING THAT THE ACTIVITIES OF THE TRUST WERE NOT WITHIN THE PURVIEW OF SECTION 2(15) OF THE INCOME TAX ACT, 1961 DURING THE YE AR. PARA 6 & PARA 7 OF THE ITAT ORDER GROUND 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO ALLOW BENEFITS OF SECTION 11 & 12 OF THE I.T. ACT, IGNORING THE FACT THE ASSESSEE WAS INVOLVED IN BUSINESS ACTIVITY WITHIN THE MEANING OF SECTION 2(15) OF THE INCOME TAX ACT, 1961 DURING THE YEAR UNDER CONSIDERATION. PARA 6 & PARA 7 OF THE ITAT ORDER 5 ITA NO S . 3631 & 3632/DEL/2015 GROUND 3 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO ALLOW BENEFITS OF SECTION 11 & 12 OF THE I.T. ACT, IGNORING THE FACT THE ASSESSEE HAS VIOLATED THE PROVISION OF SECTION 13(L)(C) OF THE ACT BY PROVIDING THE FINANCIAL BENEFIT TO THE PERSONS SPECIFIED U/S 13(3) OF THE ACT PARA 6 & POINT 7 OF THE ITAT ORDER GROUND 4 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE BENEFIT OF SECTION 11 & 12 OF THE ACT IGNORING THE PROVISION OF SECTION 13(1) WHICH PROVIDE THAT EVEN IF THERE IS A SINGLE INSTANCE OF VIOLATION OF SECTION 13(1), THE TRUST WILL LOSE THE EXEMPTION IN RESPECT OF ENTIRE INCOME. PARA 10 & PARA 11 OF THE ITAT ORDER GROUND 5 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE CLAIM OF DEPRECIATION OF RS. 3,54,67,912/ - TO THE ASSESSEE IGNORING THE FACT THAT THE ASSESSEE HAD CLAIMED THE AMOUNT INCURRED ON PURCHASE OF ASSETS IN EARLIER YEARS AS APPLICATION OF INCOME, ON WHICH DEPRECIATION IS CLAIMED NOW AND FURTHER ALLOWANCE OF DE PRECIATION WILL BE TANTAMOUNT TO DOUBLE DEDUCTION PARA 21 OF THE ITAT ORDER GROUND 6 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE CLAIM OF DEPRECIATION OF RS. 3,54,67,912/ - TO THE ASSESSEE IN VIEW OF THE RECENT DECISION OF THE HON'BLE DELHI HIGH COURT IN CASE OF DIT(E) VS CHARANJIV CHARITABLE TRUST DATED 18.03.2014 PARA 21 OF THE ITAT ORDER GROUND 7 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 2,26,522/ - MADE ON ACCOUNT OF PERSONAL USE OF CAR. PARA 12 OF THE ITAT ORDER GROUND 8 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,55,00,000/ - MADE UNDER THE HEAD EXCESS ADMISSION OF 31 STUDENTS. PARA 7 OF THE ITAT ORDER GROUND 9 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,44,97,952/ - MADE ON ACCOUNT OF TRAINING EXPENSES BEING PERSONAL IN NATURE. PARA 18 OF THE ITAT ORDER 6 . ON PERUSAL OF THE ORDER OF THE T RIBUNAL (SUPRA), WE FIND THAT GROUNDS OF APPEAL RAISED IN THE YEAR UNDER CONSIDERATION ARE COVERED BY THE FINDING OF THE T RIBUNAL. 7 . THE GROUND S NO. 1 TO 2 OF THE PRESENT APPEAL ARE COVERED BY THE FINDING OF THE T RIBUNAL (SUPRA) IN PARAGRAPH 6 AND 7 , WHIC H ARE REPRODUCED AS UNDER: 6. WE HAVE PERUSED THE ASSESSMENT ORDER AS WELL AS THE ORDER OF THE CIT(A). ON GOING THROUGH THE ABOVE ORDER OF THE CIT(A) WE NOTICE THAT EACH OF THE ALLEGATIONS LEVIED BY THE ASSESSING 6 ITA NO S . 3631 & 3632/DEL/2015 OFFICER HAS BEEN EXAMINED BY THE CIT(A) A ND A FINDING HAS BEEN GIVEN BASED ON THE FACTS. AS REGARDS THE ALLEGATION THAT IT HAS VIOLATED CERTAIN GUIDELINES OF AICTE, THE CIT(A) HAS DEALT THIS ISSUE IN PARA 5.7 OF ITS ORDER AS UNDER: - 5.7 FOR DENYING THIS BENEFIT EITHER THE AO HAS TO CO - RELATE THE ALLEGATION SO AS TO MAKE OUT A CASE UNDER THE INCOME TAX ACT. THUS, ASSESSEE IS A SOCIETY WHICH IS ENGAGED IN EDUCATIONAL ACTIVITY. IF IT HAS ADMITTED STUDENTS IN EXCESS OF THE NORMS PRESCRIBED BY THE AICTE IT CAN BE AN ISSUE CONNECTED WI TH APPELLANT SOCIETY AND AICTE AND NOT CONNECTED WITH AO AND THAT APPELLANT SOCIETY UNLESS THERE IS A REQUIREMENT OR A CONDITION IN ANY OF THE INCOME TAX PROVISIONS TO THE EFFECT THAT EXEMPTION WILL BE DENIED IF THE GUIDELINES OF AICTE IS VIOLATED. MOREOVE R IN THIS CASE, THE EXCESS ADMISSION HAS BEEN REGULARIZED BY THE AICTE. AS PER PROVISION OF SECTION 2(15) CHARITABLE PURPOSE INCLUDE 'EDUCATION' THERE IS NO RIDER ATTACHED TO THIS WORD 'EDUCATION'. ACCORDINGLY SO LONG THE ACTIVITIES ARE IN THE FIELD OF EDU CATION IRRESPECTIVE OF THE FACT WHETHER IT IS ACCREDITED OR WHETHER IT IS APPROVED IN ACCORDANCE WITH THE GUIDELINES OR NORMS, IT SHALL BE ELIGIBLE FOR EXEMPTION IF IT FULFILLS AND DOES NOT VIOLATE THE OTHER CONDITIONS OF THE INCOME TAX ACT. THUS I HOLD TH AT AO IS NOT JUSTIFIED IN DRAWING ADV ERSE INFERENCE ON THIS ACCOUNT. 7. WE NOTICE THAT THE ALLEGATIONS ARE MAINLY RELATED TO RUNNING SOME PROGRAMMES, AND THAT TOO, EDUCATIONAL. FURTHER, THE ALLEGATIONS ARE RELATED TO STUDENTS BEING ADMITTED IN EXCESS OF T HE NORMS PRESCRIBED BY THE AICTE. BUT THE FACT REMAINS THAT THESE ARE EDUCATIONAL ACTIVITIES FALLING WITHIN THE MEANING OF THE OBJECT OF THE SOCIETY AND ALSO FALLING WITHIN THE MEANING OF 'CHARITABLE PURPOSES' UNDER SECTION 2(15) OF THE ACT. FROM THE FACTS WE NOTICE THAT THE AO HAS NOT APPRECIATED THE FACTS REGARDING THE ALLEGATION OF VIOLATION OF THE GUIDELINES OF AICTE. THE ALLEGATION OF THE AO WAS THAT THE NUMBER OF STUDENTS WAS IN EXCESS OF THE STUDENTS ALLOWED BY THE AICTE. THE AICTE HAS REGULARIZED TH IS BY CHARGING A FEE FOR THE SAME, WHICH MEANS, THAT THE STAND OF THE ASSESSEE STOOD RECTIFIED BY THE AICTE. THE SECOND ALLEGATION WAS REGARDING RUNNING A TRIPLE DEGREE PROGRAMME IN THE SAME CAMPUS OF THE INSTITUTE DESPITE THERE BEING GUIDELINES BY AICTE T HAT NO OTHER PROGRAMME COULD BE RUN ON THE SAME CAMPUS. WE ARE OF THE VIEW THAT THIS CANNOT BE A GROUND FOR DENYING EXEMPTION UNDER SECTION 11 READ WITH SECTION 2(15) OF THE ACT. BOTH THE ALLEGATIONS ARE REGARDING EDUCATIONAL PROGRAMMES BEING CONDUCTED BY THE ASSESSEE. SUCH ACTIVITIES OF THE SOCIETY WILL FAIL WITHIN THE MEANING OF 'CHARITABLE PURPOSE' UNDER SECTION 2(15) OF THE INCOME TAX ACT. AS PER THE PROVISIONS OF SECTION 11, EXEMPTION IS ALLOWED IN CASE THE INCOME HAS BEEN APPLIED FOR CHARITABLE PURPOS ES. 'CHARITABLE PURPOSE' INCLUDES EDUCATION. FURTHER, FOR CLAIMING 7 ITA NO S . 3631 & 3632/DEL/2015 EXEMPTION, THE CONDITIONS PRESCRIBED UNDER SECTION 12A HAVE TO BE COMPLIED WITH. THE ASSESSEE SOCIETY HAS DULY COMPLIED WITH THESE CONDITIONS. ITS ACTIVITIES ARE EDUCATIONAL AND AS SUCH, IT IS ELIGIBLE FOR EXEMPTION UNDER SECTION 11 OF THE ACT. THUS, THE CIT(A) WAS CORRECT IN HOLDING THAT THESE ALLEGATIONS CANNOT BE THE BASIS FOR DENYING EXEMPTION UNDER SECTION 11 OF THE ACT. 7 .1 ACCORDINGLY, RESPECTFULLY FOLLOWING THE FINDING OF THE T RIBUNAL ( SUPRA), THE GROUND S NO. 1 & 2 OF THE REVENUE S APPEAL ARE DISMISSED. 8 . THE GROUND NO. 3 & 4 OF THE PRESENT APPEAL SEEKING DENIAL OF EXEMPTION UNDER SECTION 11 AND 12 OF THE A CT FOR ALLEGED VIOLATION OF SECTION 13 OF THE ACT IS COVERED BY THE FINDING OF THE T RIBUNAL (SUPRA) IN PARAGRAPH 10 AND 11. FOR READY REFERENCE , THE SAID FINDING IS REPRODUCED AS UNDER: 10. AS REGARDS THE ALLEGATION OF THE AO THAT THE ASSESSEE HAS VIOLATED THE PROVISIONS OF SECTION 13 THE ALLEGATION OF THE AO IS THAT THE OFFICE BEARERS OF THE ASSESSEE SOCIETY ARE RELATED TO EACH OTHER AND THIS AFFECTS THE DEMOCRATIC WORKING OF THE ASSESSEE. THIS ISSUE HAS BEEN DEALT WITH BY THE CIT(A) IN PARA 5.11 AS UNDER: - '5.11 THE NEXT ISSUE IS THE ALLEGATION OF VIO LATION OF PROVISIONS OF SECTION 13(3) OF THE INCOME TAX ACT. THESE ALLEGATIONS HAVE TO BE READ WITH THE SPECIFIC CLAUSES OF THIS SECTION 13(3). IN FACT SECTION 13(3) TALKS ABOUT ONLY THE PERSONS WHO HAVE OBLIGATION UNDER SECTION 13(1) AND 13(2). THUS THE I SSUE IS WHETHER THOSE SPECIFIED PERSONS HAVE VIOLATED ANY OF THE PROVISIONS OF SECTION 13(1) OR 13(2). IN THIS REGARD THE FIRST ALLEGATION OF THE AO IS THAT THE OFFICE BEARERS OF THE SOCIETY ARE RELATED TO EACH OTHER AND AS SUCH THEY HAVE DIRECT IMPACT ON THE DEMOCRATIC WORKING OF THE SOCIETY. THIS ALLEGATION NOWHERE CONTRADICTS OR VIOLATES THE PROVISIONS OF SECTION 13.' 11. AS PER THE PROVISIONS OF SECTION 13, THERE ARE CERTAIN CONDITIONS WHICH, IF VIOLATED, WOULD LEAD TO DENIAL OF THE BENEFIT UNDER SECTI ON 11, IF SOME ADVANTAGE OR BENEFIT HAS BEEN TAKEN BY THE PERSONS WHO ARE IN THE GOVERNANCE OF THE INSTITUTION. HOWEVER, THERE IS NO CONDITION SPECIFIED, THAT THE PERSONS IN GOVERNANCE SHOULD NOT BE RELATIVES. THE FUNCTIONING OF THE 8 ITA NO S . 3631 & 3632/DEL/2015 INSTITUTION CANNOT BE C ONSIDERED TO BE UNDEMOCRATIC, IF TWO RELATIVES ARE OCCUPYING THE POSITION IN THE MANAGEMENT. IN FACT, SECTION 13 ITSELF PROVIDES FOR PAYMENT OF SALARY, AND ALLOWANCE TO THE PERSONS IN THE MANAGEMENT, IN CASE SUCH PAYMENT DOES NOT EXCEED WHAT MAY BE REASONA BLY PAID FOR SUCH SERVICES. THUS, WE ARE IN AGREEMENT WITH CIT(A) THAT THERE IS NO SUCH RESTRICTION IN SECTION 13 REGARDING RELATIVES HOLDING POSITION IN THE CHARITABLE SOCIETY OR INSTITUTION. 8 .1 THUS , RESPECTFULLY FOLLOWING THE FINDING OF THE T RIBUNAL (SUPRA), THE GROUND S NO. 3 & 4 OF THE APPEAL OF THE R EVENUE ARE DISMISSED. 9 . THE GROUND S NO. 5 AND 6 RELATE TO CLAIM OF DEPRECIATION DESPITE PURCHASE OF ASSETS CONSIDERED TOWARDS APPLICATION OF INCOME IN EARLIER YEARS. THE IDENTICAL ISSUE HAS BEEN DECIDED BY THE T RIBUNAL (SUPRA) IN PARA 21 TO 23 OF THE ORDER, WHICH ARE REPRODUCED AS UNDER: 21. GROUND NO. 2 AND 3 ARE REGARDING ALLOWING DEPRECIATION DESPITE THE FACT THAT THE SOCIETY HAS ALREADY CLAIMED THE SAME AS DEDUCTION OF INCOME AT THE TIME OF ADDITION TO THE FIXED ASSETS. THE AO ALLOWED DEPRECIATION ON THE ASSETS PURCHASED DURING THE CURRENT YEAR ONLY, AND DEPRECIATION OF ASSETS PURCHASED IN EARLIER YEARS WAS DISALLOWED. THE CIT(A) HAS DELETED THESE ADDITIONS FOLLOWING THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF 'DIRECTOR OF INCOME TAX VS. VISHWA JAGRITI MISSION', 73 DTR 195 (DEL). WE ARE IN AGREEMENT WITH THE ORDER OF THE CIT(A). THE ASSESSEE - SOCIETY IS A CHARITABLE INSTITUTION AND WHEN INCOME IS APPLIED TOWARDS CHARITABLE PURPOSES INCLUDING TOWARDS PURCHASE OF FIXED ASSESS, IT IS CONSIDERED TO BE DEDUCTION OF INCOME AND HENCE, INCOME, TO THA T EXTENT, IS CONSIDERED AS APPLIED FOR CHARITABLE PURPOSE AND THUS, NOT CHARGED TO TAX UNDER SECTION LL(L)(A) OF THE ACT. THE ASSESSEE HAVING PURCHASED THE FIXED ASSETS AND THE SAME HAVING BEEN UTILIZED IN CARRYING OUT ITS ACTIVITIES, THE INCOME ARISING FR OM THE ACTIVITIES IS TO BE COMPUTED BY APPLYING THE NORMAL PRINCIPLE OF COMPUTATION OF INCOME, WHICH WILL INCLUDE A CHARGE ON ACCOUNT OF DEPRECIATION IN RESPECT OF THE FIXED ASSETS USED FOR CARRYING OUT SUCH ACTIVITIES. AS SUCH, DEPRECIATION IS ALLOWED WHI LE COMPUTING INCOME OF THE YEAR UNDER CONSIDERATION. IT CANNOT BE SAID THAT THE FIXED ASSETS ACQUIRED HAD ALREADY BEEN CLAIMED AS DEDUCTION. DEPRECIATION IS A NORMAL EXPENDITURE INCURRED IN THE COURSE OF THE ACTIVITIES AND HENCE, THE SAME NEED TO BE DEDUCT ED WHILE COMPUTING THE INCOME. THIS ISSUE HAS BEEN 9 ITA NO S . 3631 & 3632/DEL/2015 DEALT WITH BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF 'DIRECTOR OF INCOME TAX VS. VISHWA JAGRITI MISSION', ITA NO. 140/2012, VIDE ORDER DATED 29TH MARCH, 2012, WHILE MAKING A DISTINCTION WITH THE JUDG MENT OF THE SUPREME COURT IN 'ESCORTS LTD. VS. UNION OF INDIA , AS UNDER: - '13. THE JUDGMENT OF THE SUPREME COURT IN ESCORTS LIMITED VS. UNION OF INDIA (SUPRA) HAS BEEN RIGHTLY HELD TO BE INAPPLICABLE TO THE PRESENT CASE. THERE ARE TWO REASONS AS TO WHY T HE JUDGMENT CANNOT BE APPLIED TO THE PRESENT CASE. FIRSTLY, THE SUPREME COURT WAS NOT CONCERNED WITH THE CASE OF A CHARITABLE TRUST/INSTITUTION INVOLVING THE QUESTION AS TO WHETHER ITS INCOME SHOULD BE COMPUTED ON COMMERCIAL PRINCIPLES IN ORDER TO DETERMIN E THE AMOUNT OF INCOME AVAILABLE FOR APPLICATION TO CHARITABLE PURPOSES. IT WAS A CASE WHERE THE ASSESSEE WAS CARRYING ON BUSINESS AND THE STATUTORY COMPUTATION PROVISIONS OF CHAPTER IV - D OR THE ACT WERE APPLICABLE. IN THE PRESENT CASE, WE ARE NOT CONCERNE D WITH THE APPLICABILITY OF THESE PROVISIONS. WE ARE CONCERNED ONLY WITH THE CONCEPT OF COMMERCIAL INCOME AS UNDERSTOOD FROM THE ACCOUNTING POINT OF VIEW. EVEN UNDER NORMAL COMMERCIAL ACCOUNTING PRINCIPLES, THERE IS AUTHORITY FOR THE PROPOSITION THAT DEPRE CIATION IS A NECESSARY CHARGE IN COMPUTING THE NET INCOME. SECONDLY, THE SUPREME COURT WAS CONCERNED WITH THE CASE WHERE THE ASSESSEE HAD CLAIMED DEDUCTION OF THE COST OF THE ASSET UNDER SECTION 35(1) OF THE ACT, WHICH DEDUCTION FOR CAPITAL EXPENDITURE INC URRED ON SCIENTIFIC RESEARCH, ME QUESTION WAS WHETHER AFTER CLAIMING DEDUCTION IN RESPECT OF THE COST OF THE ASSET UNDER SECTION 35(1), CAN THE ASSESSEE AGAIN CLAIM DEDUCTION ON ACCOUNT OF DEPRECIATION IN RESPECT OF THE SAME ASSET. THE SUPREME COURT RULED THAT, UNDER GENERAL PRINCIPLES OF TAXATION, DOUBLE DEDUCTION IN REGARD TO THE SAME BUSINESS OUTGOING IS NOT INTENDED UNLESS CLEARLY EXPRESSED. THE PRESENT CASE IS NOT ONE OF THIS TYPE, AS RIGHTLY DISTINGUISHED BY THE CIT(APPEALS). 22. THE ABOVE VIEW IS ALSO SUPPORTED BY CIT VS. TINY TOTS EDUCATIONAL SOCIETY , 330 ITR 21 (P&H), CIT VS. SHRI GUJRATI SAMAJ (REGD.), (2012) 349 ITR 559(MP) AND CIT VS. MARKET COMMITTEE, PIPLI, (2011) 330 ITR 16 (P&H). 23. IN VIEW OF THE ABOVE SETTLED POSITION OF LAW, WE UPHOLD THE ORDER OF THE CIT(A) AND REJECT GROUND NOS. 2 AND 3. 9.1 THIS ISSUE HAS ALSO BEEN DECIDED BY THE HON BLE SUPREME COURT IN THE CASE OF RAJASTHAN AND GUJARATI C HARITABLE 10 ITA NO S . 3631 & 3632/DEL/2015 FOUNDATION, POONA, 402 ITR 441 (SC) IN FAVOUR OF THE ASSESSEE. THUS , RESPECTFULLY FOLLOWING THE DECISION OF THE HON BLE SUPREME COURT AND THE DECISION OF THE T RIBUNAL IN THE CASE OF THE ASSESSEE, THE GROUND S NO . 5 AND 6 OF THE APPEAL OF THE R EVENUE ARE DISMISSED. 10. THE GROUND NO. 7 OF THE APPEAL RELATE TO ADDITION OF RS. 2,26,522/ - MADE ON ACCOUNT OF PERSONAL USE OF CAR. THE IDENTICAL ISSUE HAS BEEN DECIDED BY THE T RIBUNAL (SUPRA) IN PARA 12 OF THE ORDER AS UNDER: 12. FURTHER, AS REGARDS THE ALLEGATION OF THE AO THAT THE FACILITIES OF THE SOCIETY ARE BEING MISUSED BY THE OFFICE BEARERS REGARDING CARS, PREMISES, ETC., WE NOTICE THAT THIS ISSUE GOT CLARIFIED DURING THE COURSE OF THE SURVEY ITSELF, WHERE ONE OF THE EMP LOYEE, MR. S.K. DHALL, IN RESPONSE TO A SPECIFIC QUESTION, STATED THAT THE VEHICLES WERE BEING USED BY THE OFFICERS, STAFFERS/FACULTY AND ALSO BY OTHER STAFF MEMBERS, FOR LIAISON WORK OF THE SOCIETY. THIS STATEMENT CLEARLY ADDRESSES THE CONCERN OF THE AO. THIS STATEMENT BEING A STATEMENT RECORDED DURING THE SURVEY, IT CANNOT BE IGNORED, PARTICULARLY WHEN THE AO HAS NOT BROUGHT ANY MATERIAL TO SUBSTANTIATE HIS ALLEGATION AGAINST THE ASSESSEE. THE SURVEY REPORT WAS ALSO BEFORE THE AO AND IN CASE HE HAD ANY DO UBT ABOUT THE SAME, HE COULD HAVE MADE FURTHER INVESTIGATION, WHICH HE CHOSE NOT TO DO. HAVING FAILED TO DO SO, HE CANNOT IGNORE THE STATEMENT AND DRAW ADVERSE INFERENCE MERELY ON THE BASIS OF ASSUMPTIONS. THE CIT(A) HAS DEALT WITH THIS ISSUE IN PARAS 5.11 AND 5.12 AS FOLLOWS: - 'THE OTHER ALLEGATION OF THE AO ON THIS ACCOUNT IS THE OFFICE BEARERS ARE MAINTAINING LUXURIOUS CARS AND THE EXPENSES RELATED TO THEIR PURCHASE, REPAIR AND MAINTENANCE BEING BORNE BY THE SOCIETY. IN THIS REGARD I HAVE GONE THROUGH T HE RECORDS AND I NOTICE THAT DURING SURVEY A SPECIFIC QUESTION WAS PUT TO THE EMPLOYEE, MR. S.K. DHALL ON 31.01.2012 WHERE IN RESPONSE TO QUESTION NO.4 HE HAS CLARIFIED AS UNDER: - 'VEHICLES OWNED BY THE IMM AS PER ANNEXURE A ATTACHED. THESE VEHICLES ARE U SED BY THE OFFICERS/ STAFFERS/ FACULTY OF IMM FOR ATTENDING VARIOUS MEETINGS/FUNCTIONS AND ALSO BY OTHER STAFF MEMBERS FOR LIAISON WORK FOR IMM. THESE VEHICLES ARE ALSO 11 ITA NO S . 3631 & 3632/DEL/2015 USED BY THE SPEAKERS/ SESSION CHAIRMAN/ HIGH DIGNITARIES DURING THE SEMINAR/TRAINING PR OGRAMS.' 5.12 THE ABOVE STATEMENT RECORDED DURING THE SURVEY CLEARLY SHOWS THAT THE VEHICLES ARE BEING USED FOR THE PURPOSES OF THE SOCIETY. I FURTHER NOTICE THAT DURING THE COURSE OF THE SURVEY NOTHING ADVERSE ON THIS ACCOUNT HAS BEEN FOUND. IN ABSENCE O F ANY EVIDENCE THE ALLEGATION OF THE AO CANNOT BE SUSTAINED. THE AO HAS JUST MADE THE ALLEGATION AND HAS NOT GIVEN ANY BASIS, MATERIAL OR INFORMATION ON THE BASIS OF WHICH SUCH ALLEGATION IS BEING MADE. ON THE CONTRARY, THE ASSESSEE HAS GIVEN EXPLANATION W HICH HAS NOT BEEN CONTROVERTED. 10.1 THUS, RESPECTFULLY FOLLOWING THE FINDING OF THE TRIBUNAL ON THE ISSUE IN DISPUTE, THE GROUND NO. 7 OF THE APPEAL IS DISMISSED. 11. IN GROUND NO. 8, THE R EVENUE , HAS CHALLENGED ADDITION OF RS.1,55,00, 000/ - MADE UNDER THE H EAD EXCESS ADMISSION OF 31 STUDENTS. THE T RIBUNAL (SUPRA) IN THE ORDER FOR ASSESSMENT YEAR 2009 - 10 HAS REJECTED THE ALLEGATION OF THE AO OF DENIAL OF EXEMPTION IN RESPECT OF FEE RECEIVED FROM STUDENTS ADMITTED IN EXCESS OF NUMBER IN VIOL ATION OF AIC TE GUIDELINES. THE T RIBUNAL OBSERVED THAT AICTE HAS REGULARIZED THIS VIOLATION BY WAY OF CHARGING A FEE, WHICH MEANS THAT THE STAND OF THE ASSESSEE STOOD RECTIFIED BY THE AICT E. THE RELEVANT FINDING OF THE T RIBUNAL (SUPRA) HAS THOUGH BEEN REPRODUCED IN ABOVE PARAS, FOR READY REFERENCE THE SAID PARAGRAPH OF THE ORDER OF THE TRIBUNAL IS REPRODUCED AS UNDER: 7. WE NOTICE THAT THE ALLEGATIONS ARE MAINLY RELATED TO RUNNING SOME PROGRAMMES, AND THAT TOO, EDUCATIONAL. FURTHER, T HE ALLEGATIONS ARE RELATED TO STUDENTS BEING ADMITTED IN EXCESS OF THE NORMS PRESCRIBED BY THE AICTE. BUT THE FACT REMAINS THAT THESE ARE EDUCATIONAL ACTIVITIES FALLING WITHIN THE MEANING OF THE OBJECT OF THE SOCIETY AND ALSO FALLING WITHIN THE MEANING OF 'CHARITABLE PURPOSES' UNDER SECTION 2(15) OF THE ACT. FROM THE FACTS WE NOTICE THAT THE AO HAS NOT APPRECIATED THE FACTS REGARDING THE ALLEGATION OF VIOLATION OF THE GUIDELINES OF AICTE. THE ALLEGATION OF THE AO WAS THAT THE NUMBER OF STUDENTS WAS IN EXCES S OF THE STUDENTS ALLOWED BY THE 12 ITA NO S . 3631 & 3632/DEL/2015 AICTE. THE AICTE HAS REGULARIZED THIS BY CHARGING A FEE FOR THE SAME, WHICH MEANS, THAT THE STAND OF THE ASSESSEE STOOD RECTIFIED BY THE AICTE. THE SECOND ALLEGATION WAS REGARDING RUNNING A TRIPLE DEGREE PROGRAMME IN THE SA ME CAMPUS OF THE INSTITUTE DESPITE THERE BEING GUIDELINES BY AICTE THAT NO OTHER PROGRAMME COULD BE RUN ON THE SAME CAMPUS. WE ARE OF THE VIEW THAT THIS CANNOT BE A GROUND FOR DENYING EXEMPTION UNDER SECTION 11 READ WITH SECTION 2(15) OF THE ACT. BOTH THE ALLEGATIONS ARE REGARDING EDUCATIONAL PROGRAMMES BEING CONDUCTED BY THE ASSESSEE. SUCH ACTIVITIES OF THE SOCIETY WILL FALL WITHIN THE MEANING OF 'CHARITABLE PURPOSE' UNDER SECTION 2(15) OF THE INCOME TAX ACT. AS PER THE PROVISIONS OF SECTION 11, EXEMPTION IS ALLOWED IN CASE THE INCOME HAS BEEN APPLIED FOR CHARITABLE PURPOSES. 'CHARITABLE PURPOSE' INCLUDES EDUCATION. FURTHER, FOR CLAIMING EXEMPTION, THE CONDITIONS PRESCRIBED UNDER SECTION 12A HAVE TO BE COMPLIED WITH. THE ASSESSEE SOCIETY HAS DULY COMPLIED W ITH THESE CONDITIONS. ITS ACTIVITIES ARE EDUCATIONAL AND AS SUCH, IT IS ELIGIBLE FOR EXEMPTION UNDER SECTION 11 OF THE ACT. THUS, THE CIT(A) WAS CORRECT IN HOLDING THAT THESE ALLEGATIONS CANNOT BE THE BASIS FOR DENYING EXEMPTION UNDER SECTION 11 OF THE ACT . 11.1 THUS , RESPECTFULLY, FOLLOWING THE DECISION OF THE T RIBUNAL (SUPRA), THE FINDING OF THE LD. CIT(A) IN DELETING THE ADDITION IS SUSTAINED AND T HE GROUND OF THE APPEAL OF THE REVENUE IS DISMISSED. 12. THE GROUND 9 OF THE A PPEAL RELATE TO ADDITION OF RS. 1,44,97,952/ - MADE ON ACCOUNT OF TRAINING EXPENSES BEING PERSONAL IN NATURE. THE IDENTICAL ISSUE HAS BEEN DECIDED BY THE T RIBUNAL (SUPRA) IN PARA 18 OF THE ORDER, WHICH IS REPRODUCED AS UNDER: 18. THE SOCIETY IS AN EDUCATIONAL INSTITUTION. IT HAS MADE PAYMENT THROUGH CREDIT CARD OF ONLY RS.16,19,243/ - . AS AGAINST THIS, THE AO HAS CONSIDERED THE ENTIRE TRAINING EXPENSES OF RS.99,21,943/ - AND DISALLOWED 60% OF THE SAME AS BEING PERSONAL IN NATURE. THE SOCIETY HAD SUBMITTED DETAILS OF THE SAME BEFORE THE AO AND AO HAS NOT BEEN ABLE TO POINT OUT ANY PARTICULAR ITEM OF THE EXPENDITURE WHICH CAN BE CONSIDERED TO BE PERSONAL IN NATURE. A SURVEY WAS CONDUCTED. NOTHING ADVERSE TO THE ASSESSEE EMERGED DURING SURVEY ON THIS ACCOUNT. THE ASSESSEE HAS GIVEN AN EXPLA NATION THAT THE EXPENSES INCURRED 13 ITA NO S . 3631 & 3632/DEL/2015 THROUGH CREDIT CARD WERE MEANT FOR THE SOCIETY. IT ORGANIZED VARIOUS SEMINARS AND CONFERENCES, THROUGH WHICH AN EMINENT FACULTY WAS INVITED. THUS, THE ASSUMPTION OF THE AO THAT THE EXPENDITURE INCURRED THROUGH CREDIT CARD WAS PERSONAL, IS NOT CORRECT. THE CIT(A) HAS CORRECTLY HELD THAT THE FACILITY OF THE CREDIT CARD IS A FACILITY LIKE THAT OF A BANK. THE CREDIT CARD HAS BEEN USED TO INCUR EXPENSES FOR AND ON BEHALF OF THE ASSESSEE SOCIETY. 12.1 I N THE YEAR UNDER CONSI DERATION ALSO , THE R EVENUE HAS NOT POINTED OUT ANY PARTICULAR ITEM OF EXPENDITURE, WHICH COULD BE CONSIDERED AS PERSONAL IN NATURE. IN VIEW THE FACTS, RESPECTFULLY FOLLOWING THE DECISION OF THE T RIBUNAL (SUPRA), THE ISSUE IN DISPUTE IS DECIDED IN FAVOUR OF THE ASSESSEE AND THE GROUND OF APPEAL OF THE R EVENUE IS DISMISSED. 1 3 . IN THE RESULT, APPEAL OF T HE R EVENUE FOR ASSESSMENT YEAR 2008 - 09 IS DISMISSED. ITA NO.3632/DEL/2015 FOR AY: 2010 - 11 14. NOW, WE TAKE UP THE APPEAL OF THE REVENUE IN ITA NO.3632/DEL/2015 FOR ASSESSMENT YEAR 2010 - 11. THE GROUNDS RAISED IN THE APPEAL ARE REPRODUCED AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE BENEFIT OF SECTION 11 & 12 OF THE ACT IGNORING THAT THE ACTIVITIES OF THE TRUST WERE NOT WITHIN THE PURVIEW OF SECTION 2(15) OF THE INCOME TAX ACT, 1961 DURING THE YEAR. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN DIRECTING THE AO TO ALLOW BENEFITS OF SECTION 11 & 12 OF THE I.T ACT, IGNORING THE FACT THE ASSESSEE WAS INVOLVED IN BUSINESS ACTIVITY WITHIN THE MEANING OF SECTION 2(15) OF THE INCOME TAX ACT, 1961 DURING THE YEAR UNDER CONSIDERATION. 14 ITA NO S . 3631 & 3632/DEL/2015 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN DIRECTING THE AO TO ALLOW BENEFITS OF SECTION 11 & 12 OF THE I.T ACT, IGNORING THE FACT THE ASSESSEE HAS VIOLATED THE PROVISION OF SECTION 13 (1) (C) OF THE ACT BY PROVIDING THE FINANCIAL BENEFIT TO THE PERSONS SPECIFI ED U/S 13(3) OF THE ACT. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE BENEFIT OF SECTION 11 & 12 OF THE ACT IGNORING THE PROVISION OF SECTION 13(1) WHICH PROVIDE THAT EVEN IF THERE IS A SINGLE I NSTANCE OF VIOLATION OF SECTION 13(1), THE TRUST WILL LOSE THE EXEMPTION IN RESPECT OF ENTIRE INCOME. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN ALLOWING THE CLAIM OF DEPRECIATION OF RS. 3,82,85,475/ - TO THE ASSESSEE IGNORING THE FACT THAT THE ASSESSEE HAD CLAIMED THE AMOUNT INCURRED ON PURCHASE OF ASSETS IN EARLIER YEARS AS APPLICATION OF INCOME, ON WHICH DEPRECIATION IS CLAIMED NOW AND FURTHER ALLOWANCE OF DEPRECIATION WILL BE TANTAMOUNT TO DOUBLE DEDUCT ION. 6. N THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE CLAIM OF DEPRECIATION OR RS. 3,82,85,475/ - TO THE ASSESSEE IN VIEW OF THE RECENT DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF DIT(E) V S. CHARANJIV CHARITABLE TRUST DATED 18.03.2014. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 2,51,784/ - MADE ON ACCOUNT OF PERSONAL USE OF CAR. 8. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,72,50,000/ - ON ACCOUNT OF PENALTY PAID TO AICTE. 9. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HA; E RRED IN DELETING THE ADDITION OF RS.74,57,789/ - MADE ON ACCOUNT OF TRAINING EXPENSES BEING PERSONAL IN NATURE. 15 ITA NO S . 3631 & 3632/DEL/2015 10. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1,51,62,896/ - MADE ON ACCOUNT OF COMPUTER EXPENSES. 11. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 26,08,911/ - MADE ON ACCOUNT OF DELETION IN FIXED ASSETS NOT INCLUDED IN INCOME. 15. THE FACTS AND CIRCUMSTANCES OF THE CASE FOR THE YEAR UNDER CONSIDERATION ARE IDENTICAL TO THE FACTS AND CIRCUMSTANCES FOR AY 2008 - 09, EXCEPT THAT IN THE YEAR UNDER CONSIDERATION THE ASSESSMENT WAS COMPLET ED U/S 143(3) OF THE ACT, WHERE AS IN ASSESSMENT YEAR 2008 - 09, THE ASSESSMENT WAS COMPLETED U/S 147 R.W.S. 143 (3) OF THE ACT. 16. THE GROUNDS NO. 1 TO 9 OF THE PRESENT APPEAL, I.E., ITA NO. 3632/DEL/2015 FOR AY: 2010 - 11 ARE IDENTICAL TO GROUNDS NO. 1 TO 9 OF THE APPEAL HAVING ITA NO.3631/DEL/2015 FOR ASSESSMENT YEAR 2008 - 09, WHICH HAVE BEEN ADJUDICATED IN EARLIER PARAS OF THIS ORDER. THUS, FOLLOWING THE FINDINGS IN RESPECTIVE PARAS, THE GROUNDS NO. 1 TO 9 OF THE PRESENT APPEAL ARE ALSO DISMISSED. 17. IN GROUND N O. 10 OF THE APPEAL, THE REVENUE HAS RAISED THE ISSUE OF ADD ITION OF RS.1,51,62,896/ - MADE ON ACCOUNT OF COMPUTER EXPENSES, WHICH HAS BEEN DELETED BY THE LD. CIT(A). WE FIND THAT IDENTICAL ISSUE OF DISTRIBUTION OF 260 LAPTOPS WAS CONSIDERED BY THE TRIBUNAL WHILE DISPOSING THE APPEAL FOR ASSESSMENT YEAR 2009 - 10. THE RELEVANT FINDING OF THE TRIBUNAL IS REPRODUCED AS UNDER: 24. GROUND NO.7 IS REGARDING ALLOWANCE OF EXPENDITURE CLAIMED BY THE ASSESSEE FOR PURCHASING 260 LAPTOPS. IN THIS REGARD, THE ALLEGATION OF THE AO WAS TO THE EFFECT THAT 260 LAPTOPS WERE ALLEGEDLY PURCHASED FOR DISTRIBUTION TO STUDENTS AND WERE FOUND TO HAVE BEEN WRONGLY CLAIMED AS FIXED ASSETS. THE CIT(A) HAS DEALT WITH THIS ISSUE IN PARA 5.18 OF HIS ORDER, AS UNDER: - 16 ITA NO S . 3631 & 3632/DEL/2015 '5.18 THE ALLEGATION OF THE AO THAT 260 LAPTOPS HAS BEEN WRONGLY CLAIMED AS FIXE D ASSETS IS ALSO UNTENABLE IN VIEW OF THE CLARIFICATION GIVEN BY THE APPELLANT - SOCIETY. THE PURCHASE OF THESE LAPTOPS IS NOT IN DISPUTE. IN CASE THESE LAPTOPS HAVE BEEN DISTRIBUTED AND ARE NOT TO BE RECOVERED BACK THEN THE EXPENDITURE TO BE RECOVERED BACK, THEN THE EXPENDITURE ON SUCH PURCHASE WILL BE REVENUE IN NATURE AND ALLOWABLE IN THE HANDS OF THE APPELLANT - SOCIETY. IN CASE THE LAPTOPS ARE TO BE RECOVERED BACK FROM THE PERSON TO WHOM IT HAS BEEN GIVEN THE SAME WILL BE FIXED ASSETS OF THE APPELLANT - SOCI ETY AND ELIGIBLE FOR DEPRECIATION. THUS IT DOES NOT MAKE ANY DIFFERENCE SO FAR PROVISIONS OF SECTION 13 READ WITH SECTION 11 ARE CONCERNED. THE FINDING OF THE AO IS FOUND TO BE WITHOUT ANY MERIT ON THIS ACCOUNT.' 25. THE ISSUE BEFORE THE AO AND THE CIT(A) WAS, AS TO WHETHER THE AMOUNT SPENT ON LAPTOPS SHOULD BE CONSIDERED AS EXPENDITURE, OR AS FIXED ASSETS. THE CIT(A) HAS CLEARLY HELD THAT IN CASE IT IS TO BE CONSIDERED AS EXPENDITURE, IT WILL BE AN APPLICATION OF INCOME, AND IF, THE SAME IS TO BE CONSIDER ED AS FIXED ASSETS, IT WILL STILL BE AN APPLICATION OF INCOME AND EITHER WAY, THE SOCIETY IS ELIGIBLE TO CLAIM THE AMOUNT AS APPLICATION OF ITS INCOME. IN THE COURSE OF THE HEARING, WE ASKED THE ID. DR TO RESPOND TO THE ALLEGATION THAT THE ASSESSEE HAS USE D BOGUS BILLS, AND THE GROUND OF APPEAL IN THE ABSENCE OF ANY FINDING BY THE ASSESSING OFFICER IN THIS REGARD. THE LEARNED DR, HOWEVER, COULD NOT SUBSTANTIATE THIS ALLEGATION. AS SUCH, WE ARE IN AGREEMENT WITH THE FINDING OF THE CIT(A) THAT NO ADVERSE INFE RENCE NEEDS TO BE DRAWN ON THIS ISSUE, PARTICULARLY IN THE YEAR UNDER CONSIDERATION. ACCORDINGLY, THIS GROUND OF A PPEAL IS REJECTED. 17.1 ON PERUSAL OF THE ABOVE FINDINGS OF THE TRIBUNAL, WE FIND THAT THE COMPUTER EXPENDITURE HAS BEEN CONSIDERED TOWARDS APPLICATION OF INCOME. IN THE YEAR UNDER CONSIDERATION, THE LD. CIT(A) HAS ALSO ALLOWED THE SAID EXPENSES TOWARDS APPLICATION OF THE INCOME. AS SUCH, WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LD. CIT(A) ON THE ISSUE IN DISPUTE AND ACCORDINGLY, REJECT TH E GROUND N O. 10 OF THE APPEAL OF THE REVENUE. 18. IN GROUND NO. 11, THE REVENUE HAS RAISED THE ISSUE OF ADDITION OF RS.26,08,911/ - MADE ON ACCOUNT OF DELETION IN FIXED ASSETS NOT INCLUDED INCOME, WHICH HAS BEEN DELETED BY THE LD. CIT(A). THE CONTENTION OF THE REVENUE IS THAT THE SAID DELETION IN 17 ITA NO S . 3631 & 3632/DEL/2015 FIXED ASSETS SHOULD HAVE BEEN TAKEN AS INCOME IN THE YEAR UNDER CONSIDERATION. WHILE DISPOSING THE GROUNDS NO. 5 AND 6 OF THE APPEAL, WE HAVE ALREADY HELD THAT THE DEPRECIATION CLAIM ON THE FIXED ASSETS , DESPITE PU RCHASE OF THE ASS ETS CONSIDERED AS APPLICATION OF INCOME, IS ALLOWABLE. SINCE THE DELETION IN FIXED ASSETS HAS BEEN CONSIDERED WHILE COMPUTING THE DEPRECIATION ON THE BLOCK OF ASSETS, ISSUE - IN - DISPUTE STANDS COVERED BY OUR FINDINGS IN GROUNDS NO. 6 & 7 OF THE APPEAL. ACCORDINGLY, THE GROUND NO. 11 OF THE APPEAL IS ALSO DISMISSED. 19. IN THE RESULT, THE APPEAL FOR THE ASSESSMENT YEAR 2010 - 11 IS DISMISSED. 20. TO SUM UP, BOTH THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER IS PRONOUN CED IN THE OPEN COURT ON 2 5 T H JANUARY , 201 9 . S D / - S D / - [ AMIT SHUKLA ] [O.P. KANT] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 5 T H JANUARY, 2019 . RK / - [D.T.D.S] COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI