DCIT (Exemption), Ghaziabad V. M/s. Indian Public School Society, Dehradun

ITA 3632/DEL/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4456 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 20-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Keywords: Depreciation; Charitable institution; Capital expenditure
• Section: 12AA; 32

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, DELHI BENCH B, NEW DELHI BEFORE : SHRI L.P. SAHU, ACCOUNTANT MEMBER & SMT. BEENA A. PILLAI, JUD ICIAL MEMBER ITA NO. 3631/DEL/2016 ASSESSMENT YEAR: 2012-13 DCIT (EXEMPTION), CIRCLE, GHAZIABAD. (APPELLANT) VS. INSTITUTE OF MANAGEMENT STUDIES, 32, NEW CANTT. ROAD, DEHRADUN. PAN AAAAI 0193D (RESPONDENT) ITA NO. 3632/DEL/2016 ASSESSMENT YEAR: 2012-13 DCIT (EXEMPTION), CIRCLE, GHAZIABAD. (APPELLANT) VS. INDIAN PUBLIC SCHOOL SOCIETY, PB NO. 36, THE MALL ROAD, DEHRADUN. PAN AAACI4960N (RESPONDENT) APPELLANT BY MS. NIDHI SRIVASTAVA, CIT/DR RESPONDENT BY NONE ORDER PER L.P. SAHU, A.M.: THESE TWO APPEALS HAVE BEEN FILED BY THE REVENUE I N THE CASES OF DIFFERENT ASSESSEES AGAINST THE ORDERS PASSED BY TH E LD. CIT(A), MUZAFFARPUR DATED 23.03.2016 FOR THE ASSESSMENT YEAR 2012-13. S INCE THE COMMON ISSUE IS INVOLVED IN BOTH THESE APPEALS, THE SAME WERE HE ARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR TH E SAKE OF CONVENIENCE AND DATE OF HEARING 20.03.2019 DATE OF PRONOUNCEMENT 22.03.2019 ITA NO. 3631 & 3632/DEL/2016 2 BREVITY. BOTH THE PARTIES AGREED THAT THE DECISION IN ONE APPEAL SHALL EQUALLY APPLY TO OTHER APPEAL. WE FIRST TAKE UP ITA NO. 363 1/DEL/2016 FIRST. THE GROUNDS RAISED IN THIS APPEAL READ AS UNDER : 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND NO FACTS IN FOLLOWING THE APPEAL OF THE ASSESSE E ON THE ISSUE OF DISALLOWANCE OF DEPRECIATION OF RS.11,29,69,109/- I GNORING THE FACTS THAT DEPRECIATION ON ACCOUNT OF APPLICATION OF INCOME FO R CHARITABLE PURPOSES IS NOT ALLOWABLE AS THE CAPITAL EXPENDITURE ON ACQU IRING FIXED ASSETS HAS ALREADY BEEN ALLOWED IN RESPECTIVE YEARS. 2. THE ORDER OF LD. CIT(A) BE CANCELLED AND THE ORDE R OF THE A.O. BE RESTORED. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E SOCIETY FILED RETURN OF INCOME ON 27.09.2012 DECLARING NIL INCOME. THE CASE OF SELECTED FOR SCRUTINY AND STATUTORY NOTICES WERE ISSUED. THE ASSESSEE IS A SOCIETY DULY REGISTERED WITH REGISTRAR OF SOCIETIES, UTTARANCHAL. THE ASSES SEE HAD BEEN GRANTED REGISTRATION U/S. 12AA OF THE IT ACT BY CIT, MEERUT DATED 29.05.1998. THE SOCIETY IS CARRYING OUT THE CHARITABLE ACTIVITIES A S WELL AS RUNNING EDUCATIONAL INSTITUTIONS. IN THE ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT THE ASSESSEE HAS CLAIMED DEPRECIATION ON ASSETS, THE COST OF WHI CH HAD ALREADY BEEN TAKEN AS APPLICATION OF INCOME. THEREFORE, THE ASSESSING OFFICER FOLLOWING THE JUDGMENT OF SUPREME COURT IN THE CASE OF ESCORTS LT D., NOTED THAT THE ASSESSEE HAD CLAIMED DOUBLE DEDUCTION WHICH IS CONT RARY TO THE PRINCIPLES LAID DOWN BY HONBLE SUPREME COURT IN THE AFORESAID CASE. HE ALSO REFERRED TO SECTION 32 OF THE IT ACT REGARDING CHARGING OF D EPRECIATION ON ASSETS. ACCORDINGLY, HE DISALLOWED THE DEPRECIATION CLAIMED BY THE ASSESSEE TO THE ITA NO. 3631 & 3632/DEL/2016 3 EXTENT OF RS.11,29,69,109/-. THE ASSESSEE CARRIED T HE MATER IN APPEAL BEFORE THE LD.CIT(A), WHERE HE MADE DETAILED WRITTEN SUBMI SSIONS AND RELIED ON MANY CASE LAWS. THE LD. CIT(A) AFTER CONSIDERING TH E SUBMISSIONS OF THE ASSESSEE, ALLOWED THE APPEAL. AGGRIEVED, THE REVENU E IS IN APPEAL BEFORE THE ITAT. 3. THE LD. DR RELYING ON THE ORDER OF THE ASSESSING OFFICER SUBMITTED THAT THE ASSESSEE HAS CLAIMED DOUBLE DEDUCTION FIRSTLY AT THE TIME OF PURCHASE OF FIXED ASSET AS APPLICATION OF INCOME AND SECONDLY B Y CLAIMING DEPRECIATION ON THE SAME ASSETS WHICH IS AGAINST THE DECISION OF HONBLE APEX COURT IN THE CASE OF ESCORTS LTD. 4. NONE IS PRESENT ON BEHALF OF THE ASSESSEE DESPIT E NOTICE ISSUED TO THE ASSESSEE THROUGH REGISTERED POST. WE, THEREFORE, HA VE NO ALTERNATIVE BUT TO DECIDE THE APPEAL EXPARTE QUA ASSESSEE. 5. AFTER HEARING THE SUBMISSIONS OF THE LD. DR AND GOING THROUGH THE ENTIRE MATERIAL AVAILABLE ON RECORD, WE FIND THAT T HE LD. CIT(A) HAS DONE GOOD REASONED ORDER AFTER CONSIDERING THE DETAILED SUBMI SSIONS AND RELYING ON VARIOUS CASE LAWS. FOR READY REFERENCE, THE FINDING S REACHED BY THE LD. CIT(A) ARE REPRODUCED HEREIN BELOW : 6. GROUNDS OF APPEAL NOS. 1 & 2 BEING INTER-RELATED ARE AGAINST THE DISALLOWANCE OF DEPRECIATION CLAIMED AT RS. 11,29, 69,109/-. 7. THE FACTS OF THE CASE AS WELL AS SUBMISSION MADE BY THE APPELLANT HAVE BEEN CONSIDERED. THE APPELLANT SOCIETY IS REGIS TERED U/S 12AA OF THE ITA NO. 3631 & 3632/DEL/2016 4 INCOME TAX ACT, 1961 BY THE CIT(MEERUT) VIDE ORDER N O.2358 DATED 29.05.1978. THE APPELLANT HAS CLAIMED DEPRECIATION O F RS. 11,29,69,109/- IN THE INCOME & EXPENDITURE STATEMENT. THE ASSESSING OFFICER HAS NOT ALLOWED THE SAME BY RELYING UPON THE DECISION OF HO NBLE SUPREME COURT IN THE CASE OF ESCORTS LIMITED AND ALSO U/S 32 OF T HE INCOME TAX ACT, 1961. THE APPELLANT HAS MADE DETAILED SUBMISSION AS REPRODUCED ABOVE. THE FACTS OF THE CASE ALONG WITH THE REPLY OF THE AP PELLANT HAVE BEEN CONSIDERED. ON SIMILAR FACTS IT HAS BEEN HELD BY HO NBLE DELHI HIGH COURT IN THE CASE OF INDRAPRASTHA CANCER SOCIETY; ITA NO. 240/2014 DATED 18- 03-2014 THAT DEPRECIATION CLAIMED DOES NOT AMOUNT T O DOUBLE DEDUCTION IN CASE A CHARITABLE TRUST REGISTERED U/S 12AA OF T HE INCOME TAX ACT, 1961. SIMILAR VIEW HAS BEEN EXPRESSED BY THE HONBL E ITAT, DELHI IN THE CASE OF BHARDWAJ WELFARE TRUST (ITA NO.1979, 2564/D EL/2013) DATED 13-02-2015, ARIHANT CHARITABLE HOSPITAL TRUST, GHAZ IABAD (ITA NO. 5019/DEL/2015) DATED 17.11.2015. RESPECTFULLY FOLLO WING THE ABOVE REFERRED DECISIONS, THE A.O. IS DIRECTED TO ALLOW C LAIM OF DEPRECIATION AFTER MAKING NECESSARY VERIFICATION FROM RECORD ABO UT THE CLAIM OF THE APPELLANT IN THE RETURN OF INCOME. GROUNDS OF APPEA L NOS. 1 & 2 ARE ALLOWED. 6. IN VIEW OF THE AFORESAID FINDINGS WE FIND NO INF IRMITY IN THE IMPUGNED ORDER WHEREBY THE LD. CIT(A) AFTER RELYING UPON VAR IOUS CASE LAWS ON THE SUBJECT HAS RIGHTLY DELETED THE DISALLOWANCE MADE B Y THE ASSESSING OFFICER. IN THE CASE OF HONBLE APEX COURT IN THE CASE OF ES CORTS LTD. VS. UNION OF INDIA, 199 ITR, THE ASSESSEE HAD CLAIMED TWO DEDUCT IONS U/S. 32(1)(II) AND 35(1)(IV) OF THE IT ACT, AND HERE IN THIS CASE, NO SUCH SITUATION AROSE. ACCORDINGLY, THE AFORESAID DECISION DOES NOT RENDER ANY HELP TO THE REVENUE. ACCORDINGLY, THE APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. ITA NO. 3631 & 3632/DEL/2016 5 7. AS ALREADY NOTED, IDENTICAL FACTS AND GROUNDS AR E INVOLVED IN ITA NO. 3632/DEL/2016. THEREFORE, IN VIEW OF OUR ABOVE FIND INGS IN ITA NO. 3631/DEL/2016, THIS APPEAL OF THE REVENUE ALSO DESE RVES TO FAIL. 8. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.03.2019. SD/- SD/- (BEENA A PILLAI) (L.P . SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 22.03.2019 *AKS* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI