DDIT (E) I(2), MUMBAI V. SRI SATHYA SAI TRUST, MUMBAI

ITA 3658/MUM/2013

• Counselvise Citation: 365819914 RSA 2013
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 09-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHAMMED RIZWAN
• Assessee Lawyers: PRATAK M THAKKER
• Keywords: Depreciation; Charitable institution
• Section: 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'SMC' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT ITA NO. 3658/MUM/2013 (ASSESSMENT YEAR: 2008-09) D D I T (E)I(2) SRI SATHYA SAI TRUST ROOM NO. 504, PIRAMAL GROUND FLOOR, DHARMASHETRA CHAMBERS, 5TH FLOOR, PAREL VS. MAHAKALI CAVES ROAD MUMBAI 400012 ANDHERI (E), MUMBAI 400093 PAN - AAATS 2874E APPELLANT RESPONDENT APPELLANT BY: SHRI MOHAMMED RIZWAN RESPONDENT BY: SHRI PRATAK M. THAKKER DATE OF HEARING: 06.01.2014 DATE OF PRONOUNCEMENT: 24.01.2014 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 21.02.2013 PASSED BY THE CIT(A)-1, MUMBAI AND IT PE RTAINS TO A.Y. 2008-09. 2. THE FOLLOWING GROUNDS WERE URGED BY THE REVENUE: - 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DIRECTING THE AO TO ALLOW THE C LAIM OF DEPRECIATION AMOUNTING TO RS.60,46,886/- AND ALLOWI NG IT TO BE CARRIED FORWARD AS DEFICIT, IGNORING THE RATIO OF J UDGEMENT OF HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LTD. V S. UNION OF INDIA (199 ITR 43) WHEREIN HON'BLE SUPREME COURT HA S HELD THAT DOUBLE DEDUCTION CANNOT BE PRESUMED IF THE SAME IS NOT SPECIFICALLY PROVIDED BY LAW, IN ADDITION TO NORMAL DEDUCTION. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DIRECTING THE AO TO ALLOW THE D EFICIT OF RS.2,22,12,480/- (ON ACCOUNT OF EXCESS OF EXPENDITU RE OVER INCOME) TO BE CARRIED FORWARD WITHOUT APPRECIATING THE FACT THAT THIS WOULD HAVE THE EFFECT OF GRANTING DOUBLE BENEF IT TO THE ASSESSEE, FIRST AS ACCUMULATION OF INCOME U/S 11( 1)(A) OR AS CORPUS DONATION U/S 11(1)(D) IN THE EARLIER YEARS O R CURRENT YEAR AND THEN AS APPLICATION OF INCOME U/S 11(1)(A) IN THE CURRENT OR SUBSEQUENT YEARS WHICH WAS LEGALLY NOT PERMISSIBLE. ITA NO. 3658/MUM/2013 2 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING THE CLAIM OF THE ASSES SEE FOR CARRY FORWARD OF THE SAID DEFICIT, IGNORING THE FACT THAT THERE WAS NO EXPRESS PROVISION IN THE I T ACT, 1961 PERMITTING A LLOWANCE OF SUCH CLAIM. 3. THE ASSESSEE IS ADMITTEDLY A CHARITABLE TRUST, DULY REGISTERED UNDER SECTION 12A OF THE ACT. IN THE RETURN OF INCOME THE ASSESSEE HAS SHOWN A DEFICIT OF ` 2.22 CRORES, WHICH ARISES ON ACCOUNT OF EXCESS EXPE NDITURE OVER THE REVENUE. THE AO REJECTED THE CLAIM OF CARRY FOR WARD ON THE GROUND THAT THE SAME IS CONTRARY TO THE PRINCIPLES LAID DOWN BY THE APEX COURT IN THE CASE OF ESCORTS LTD. (199 ITR 43), I.E. NO DOUBLE D EDUCTION CAN BE ALLOWED UNLESS IT IS SPECIFICALLY SANCTIONED BY THE STATUTE . 4. AGGRIEVED, ASSESSEE CONTENDED BEFORE THE CIT(A) THA T IN THE LIGHT OF THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CA SE OF INSTITUTE OF BANKING 264 ITR 114 THERE ARE NO WORDS OF LIMITATIO N IN SECTION 11 OF THE INCOME TAX ACT REGARDING THAT THE INCOME SHOULD HAV E BEEN APPLIED FOR CHARITABLE PURPOSES ONLY IN THE YEAR IN WHICH THE I NCOME HAS ARISEN AND THERE IS NO QUESTION OF DOUBLE DEDUCTION IN THE INS TANT CASE SINCE IT IS A CASE OF CARRY FORWARD OF DEFICIT AND UNABSORBED DEPRECIA TION TO BE SET OFF AGAINST THE INCOME OF SUBSEQUENT YEAR. 5. THE LEARNED CIT(A) ACCEPTED THE CONTENTION OF THE A SSESSEE IN THE LIGHT OF THE ORDER PASSED BY HIS PREDECESSOR IN ASSESSEE S OWN CASE FOR A.Y. 2007- 08, WHICH IN TURN IS BASED UPON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT (SUPRA) WHEREIN THE DECISION OF THE APEX COUR T IN THE CASE ESCORTS INDIA WAS REFERRED TO AND DISTINGUISHED. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. 6. THE LEARNED D.R. SUBMITTED THAT THE REVENUE HAS NOT ACCEPTED THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CA SE OF CIT VS. INSTITUTE OF BAKING AND FURTHER SUBMITTED THAT THE ISSUE FALLS W ITHIN THE RATIO LAID DOWN BY THE APEX COURT IN THE FOLLOWING CASES: - I. ESCORTS LIMITED VS. UNION OF INDIA 199 ITR 43 II. J.K. SYNTHETICS LTD. VS. UNION OF INDIA 65 TAXMAN 4 20 ITA NO. 3658/MUM/2013 3 7. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSE SSEE SUBMITTED THAT IDENTICAL ISSUE HAD COME UP BEFORE E BENCH, MUMBAI IN ASSESSEES OWN CASE FOR 2007-08 WHEREIN THE APPEAL FILED BY TH E REVENUE WAS DISMISSED (ITA NO. 7350/MUM/2011 DATED 25 TH MARCH, 2013). IT DESERVES TO BE NOTICED THAT IN ITA NO. 2248/MUM/2012 (ADIT (E) VS. M/S. VAIBHAV MEDICAL & EDUCATION FOUNDATION DATED 10.09.2013), W HEREIN I AM A PARTY, THE BENCH OBSERVED THAT THE DECISION OF THE APEX CO URT IN THE CASE OF ESCORTS INDIA WAS HELD TO BE NOT APPLICABLE UNDER I DENTICAL FACTS AND BY FOLLOWING THE DECISION OF THE HON'BLE BOMBAY HIGH C OURT (SUPRA) THE BENCH DISMISSED THE APPEAL FILED BY THE REVENUE. 8. HAVING CAREFULLY GONE THROUGH THE RECORD I AM OF TH E VIEW THAT THE ORDER PASSED BY THE LEARNED CIT(A) DOES NOT CALL FO R ANY INTERFERENCE AS IDENTICAL ISSUES ARE CONSIDERED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE CONSISTENTLY. 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH JANUARY, 2014. SD/- (D. MANMOHAN) VICE PRESIDENT MUMBAI, DATED: 24 TH JANUARY, 2014 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 1, MUMBAI 4. THE CIT DDIT (E), MUMBAI CITY 5. THE DR, SMC BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.