DCIT (E), New Delhi V. M/s Smt. Angoori Devi Educational & Cultural Society (Regd), New Delhi

ITA 3884/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4792 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 01-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST IMPUGNED DATED PASSED
• Keywords: Depreciation; Charitable institution; Capital expenditure
• Section: 143(3); 12A

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A: NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NO. 3884/DEL/2016 ASSTT. YEAR: 2011-12 O R D E R PER AMIT SHUKLA, J.M.: THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST IMPUGNED ORDER DATED 18.4.2016, PASSED BY LD. CIT (APPEALS) 36, NEW DELHI FOR THE QUANTUM OF ASSESSMENT PASSED U/S 143(3) FOR THE ASSTT. YEAR 2011-12. IN THE GROUNDS OF APPEAL REVENUE HAS RAISED FOLLOWING GROUNDS:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) HAS ERRED IN LAW IN ALLOWING EXCESS APPLICATION OF DCIT (E) CIRCLE 2 (1) NEW DELHI VS. SMT. ANGOORI DEVI E DUCATIONAL & CULTURAL SOCIETY (REGD), 88A, POCKET-1, MAYUR VIHAR, PHASE-1, NEW DELHI 110 091 PAN AAATA1505E (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI MANOJ KUMAR MAHAR, SR. DR ASSESSEE BY : SHRI MANOJ KUMAR, CA DATE OF HEARING 08 /08 /201 9 DA TE OF PRONOUNCEMENT 08 / 08/2019 2 INCOME OF THE ASSESSEE SINCE THE PROVISIONS OF SECTION 11,12 & 13 OF THE I.T. ACT, 1961 GOVERNING THE EXEMPTED INSTITUTIONS VIZ TRUST/FOUNDATION/SOCIETY/COMPANY DOES NOT ALLOW CARRY FORWARD OF EXCESS APPLICATION OF INCOME ON LOSSES OF EARLIER YEARS. 2. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT, THIS ISSUE NOW STANDS COVERED BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSTT. YEAR 2012-13 IN ITA NO. 4886/DEL/2016, WHEREIN ON SIMILAR ISSUE, THIS TRIBUNAL FOLLOWING THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF CIT (EXEMPTION) VS SUBROS EDUCATIONAL SOCIETY, 303 CTR 1, HAVE DISMISSED THE SAID GROUND OF THE DEPARTMENT. 3. ON THE OTHER HAND LD. DR STRONGLY RELIED UPON THE ORDER OF THE AO. 4. AFTER CONSIDERING THE RELEVANT FINDING GIVEN IN THE IMPUGNED ORDER AND THE TRIBUNAL ORDER IN THE CASE OF THE ASSESSEE, WE FIND THAT ASSESSEE SOCIETY WAS GRANTED REGISTRATION U/S 12A AS IT WAS CARRYING OUT EDUCATIONAL ACTIVITIES. AO HAD DISALLOWED DEPRECIATION AND ALSO CLAIM OF CARRY FORWARD OF EXCESS APPLICATION INCOME AMOUNTING TO RS. 1,34,70,727/- ON THE GROUND THAT ASSESSEE IS GETTING DOUBLE BENEFIT, ONE AT THE TIME OF UTILIZATION AND AGAIN BY WAY OF DEPRECIATION. LD. CIT(A) FOLLOWING THE JUDGMENT OF HONBLE MP HIGH COURT IN THE CASE OF CIT VS. GUJARATI SAMAJ 349 ITR 559 (MP) DIRECTED THE AO TO ALLOW THE BENEFIT OF CARRY FORWARD OF LOSSES. WE FIND THAT THE TRIBUNAL ON SIMILAR SET OF GROUNDS, WHICH ARE REPRODUCED, HAS OBSERVED AND HELD AS UNDER:- 3 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE CLAIM OF CARRY FORWARD OF LOSSES DISREGARDING THE FACT THAT SET-OFF AND CARRY FORWARD OF LOSSES ARE DEALT WITH BY THE PROVISIONS OF SECTION 70 TO 74 OF THE INCOME TAX ACT, 1961. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT WHERE THE CAPITAL EXPENDITURE HAS BEEN CLAIMED AS AN APPLICATION FOR THE OBJECT OF THE TRUST, ALLOWANCE OF APPLICATION ON ACCOUNT OF DEPRECIATION WILL TANTAMOUNT OF DOUBLE DEDUCTION. 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. THE FIRST ISSUE REGARDING THE CLAIM OF EXCESS APPLICATION IN EARLIER YEAR WHETHER ALLOWABLE TO A CHARITABLE TRUST FOR SET OFF IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HONOURABLE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX (EXEMPTION) VS. SUBROS EDUCATIONAL SOCIETY 303 CTR 1. PROVISIONS OF SECTION 70-74 APPLIES TO AGGREGATION OF LOSSES AND SET OFF AND CARRY FORWARD OF THE SAME. INCOME OF THE TRUST IS COMPUTED U/S 11-13 OF THE ACT AND IS NOT HIT BY THOSE PROVISIONS. HENCE, WE DISMISS THIS GROUND OF APPEAL HOLDING THAT EXCESS APPLICATION IN EARLIER YEAR SHOULD BE ALLOWED FOR SET OFF TO THE CHARITABLE TRUST IN SUBSEQUENT YEAR AGAINST THE INCOME OF THE TRUST AS APPLICATION OF SUCH INCOME. 10. WITH RESPECT TO GROUND NO. 2 OF THE APPEAL OF THE ALLOWABILITY OF DEPRECIATION ON THE ASSETS, COST OF WHICH HAVE BEEN ALREADY CLAIMED BY THE ASSESSEE AS APPLICATION OF INCOME IS ALSO COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HONOURABLE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. RAJASTHAN AND GUJARATI CHARITABLE FOUNDATION POONA (2018) 161 DTR 0033 (SC), (2018) 300 CTR 0001 (SC), (2018) 402 ITR 0441 (SC), (2018) 253 TAXMAN 0165 (SC). THUS GROUND NO. 2 OF THE APPEAL IS ALSO DISMISSED. 11. ACCORDINGLY, APPEAL FILED BY THE LD. AO IS DISMISSED. 4 5. THUS, RESPECTFULLY FOLLOWING THE AFORESAID PRECEDENCE WHICH IS BASED ON LAW PRONOUNCEMENT BY THE HONBLE SUPREME COURT, WE DISMISS THE GROUND RAISED BY THE REVENUE. ACCORDINGLY APPEAL OF THE REVENUE IS DISMISSED. 6. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH AUGUST, 2019. SD/- SD/- (O.P. KANT) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 08/08/2019 VEENA COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI