DDIT (E)I(2), MUMBAI V. TATWAJNANA VIDYAPEETH, MUMBAI

ITA 3659/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 101070 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 19-02-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 09-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMIT KUMAR
• Keywords: Capital asset; Depreciation; Charitable institution

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER ITA NO. 3659 /MUM/20 13 (ASSESSMENT YEAR: 2008 - 09 ) ASST. DIRECTOR OF INCOME - TAX(EXEMPTION)1(2), MUMBAI. APPELLANT VS. TATWAJNANA VIDYAPEETH, NIRMAL NIKETAN, DR.BHAJEKAR STREET, MUMBAI - 400 004. RESPONDENT PAN: AAATT0261E APPELLANT BY : SHRI SUMIT KUMAR. RESPONDENT BY: NONE. DATE OF HEARING: 18 /08/2015 DATE OF PRONOUNCEMENT : : 16 / 0 9 /2015 O R D E R PER VIJAY PAL RAO, JM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 5/2/2013 OF THE CIT(A) - I, MUMBAI, FOR THE ASSESSMENT YEAR 2008 - 09. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CI T(A) ERRED IN DIRECTING THE AO TO ALLOW THE CLAIM OF DEPRECIATION AMOUNTING TO RS. 12 , 72 , 615 / - RELYING ON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. INSTITUTE OF BANKING PERSONNEL SERVICES REPORTED IN 264 ITR 110 (BO M ) IGNORING THE RATIO OF JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LTD. VS. UNION OF INDIA (19 9 ITR 43) WHEREIN HON BLE SUPREME COURT HAS HELD ITA NO . 3659/MUM/2013 TATWAJNANA VIDYAPEETH PAGE 2 OF 4 THAT DOUBLE DEDUCTION CANNOT BE PRESUMED IF THE SAME IS NOT SPECIFICALLY PROVIDED BY LAW, IN ADDITION TO NORMAL DEDUCTION. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS) I, MU MBAI BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 3. NONE HAS APPEARED ON BEHALF OF THE RESPONDENT - ASSESSEE WHEN THE APPEAL WAS CALLED FOR HEARING DESPITE NOTICE SENT THROUGH RPAD WAS DULY SERVED ON THE ASSESSEE. THEREFORE, WE PROPOSE TO HEAR AND DISPOSE OF THIS APPEAL EXPARTE. 4. WE HAVE HEARD THE LEARNED DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE ASSESSEE IS A CHARITABLE TRUST CARRYING ON CHARITABLE ACTIVITY. THE ASSESSEE - TRUST CLAIMED DEPRECIATION OF RS.12.72.65 IN RESPECT OF THE ASSET OWNED AND USED BY IT. THE AO DENIED THE CLAIM OF DEPRECIATION ON THE FIXED ASSET ON THE GROUND THAT IT AMOUNTS TO DOUBLE DEDUCTION AS THE AMOUNT OF ASSET IS ALREADY CLAIMED AS DEDUCTION BEING APPLICATION OF INCOME AND HENCE, NOT ELIGIBLE FOR DEDUCTION. 5. ON APPEAL, THE ASSESSEE HAS RELIED UPON THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. INSTITUTE OF BANKING ( 264 ITR 110 ) AS WELL AS OTHER DECISIONS. THE CIT(A) HAS ALLOWED THE CLAIM OF DEPRECIATION BY FOLLOWING THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF INSTITUTE OF BANKING (SUPRA). ITA NO . 3659/MUM/2013 TATWAJNANA VIDYAPEETH PAGE 3 OF 4 6. BEFORE U S, THE LD. DR HAS SUBMITTED THAT THE CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE WITHOUT CONSIDERING THE JUDGMENT OF TH E HON BLE SUPREME COURT IN THE CASE OF ESCORTS VS UOI (199 ITR 43). HE HAS RELIED UPON THE ORDER OF THE AO. 7. AT THE OUTSET, WE NOTE THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA) A S UNDER: 4. QUESTION NO. 2 HEREIN IS IDENTICAL TO THE QUESTION WHICH WAS RAISED BEFORE THE BOMBAY HIGH COURT IN THE CASE OF DIRECTOR OF INCOME TAX (EXEMPTION) V. FRAMJEE CAWASJEE INSTITUTE (1993) 109 CTR 463 (BOM). IN THAT CASE, THE FACTS WERE AS FOLLOWS: THE ASSESSEE WAS THE T RUST. IT DERIVED ITS INCOME FROM DEPRECIABLE ASSETS. THE ASSESSEE TOOK INTO ACCOUNT DEPRECIATION ON THOSE ASSETS IN COMPUTING THE INCOME OF THE TRUST. THE INCOME TAX OFFICER HELD THAT DEPRECIATION COULD NOT BE TAKEN INTO ACCOUNT BECAUSE, FULL CAPITAL EXPEN DITURE HAD BEEN ALLOWED IN THE YEAR OF ACQUISITION OF THE ASSETS. THE ASSESSEE WENT IN APPEAL BEFORE THE ASSISTANT APPELLATE COMMISSIONER. THE APPEAL WAS REJECTED. THE TRIBUNAL, HOWEVER, TOOK THE VIEW THAT WHEN THE INCOME TAX OFFICER STATED THAT FULL EXPEN DITURE HAD BEEN ALLOWED IN THE YEAR OF ACQUISITION OF THE ASSETS, WHAT HE REALLY MEANT WAS THAT THE AMOUNT SPENT ON ACQUIRING THOSE ASSETS HAD BEEN TREATED AS 'APPLICATION OF INCOME' OF THE TRUST IN THE YEAR IN WHICH THE INCOME WAS SPENT IN ACQUIRING THOSE ASSETS. THIS DID NOT MEAN THAT IN COMPUTING INCOME FROM THOSE ASSETS IN SUBSEQUENT YEARS, DEPRECIATION IN RESPECT OF THOSE ASSETS CANNOT BE TAKEN INTO ACCOUNT. THIS VIEW OF THE TRIBUNAL HAS BEEN CONFIRMED BY, THE BOMBAY HIGH COURT IN THE ABOVE JUDGMENT. H ENCE, QUESTION NO. 2 IS COVERED BY THE DECISION OF THE BOMBAY HIGH COURT IN THE ABOVE JUDGMENT. CONSEQUENTLY, QUESTION NO. 2 IS ANSWERED IN THE AFFIRMATIVE I.E., IN FAVOUR OF THE ASSESSEE AND AGAINST, THE DEPARTMENT. WE FURTHER NOTE THAT THIS VIEW HAS BEEN REITERATED IN THE CASE OF L ILA VATHI K I RTHILAL MEHTA MEDICAL TRUST & OTHERS (229 TAXMAN 276) WHEREIN IT HAS BEEN HELD THAT PRIOR TO AMENDMENT VIDE FINANCE ACT,2014 W.E.F.1/4/2015 DEPRECIATION ON CAPITAL ASSET WOULD BE ALLOWED AS ITA NO . 3659/MUM/2013 TATWAJNANA VIDYAPEETH PAGE 4 OF 4 DEDUCTION IN COMPUTING INCOME UNDER SECTION 11. ACCORDINGLY, FOLLOWING THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE CIT(A). 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 1 6 TH SEPTEMBER , 2015. S D / - S D / - (N.K.BILLAIYA) (VIJAY PAL RAO) ACCOUNANT MEMBER JUDICIAL MEMBER EKSRINIVASULU, SR.PS COPY TO: 1. A PPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, MUMBAI. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL MUMBAI