The ACIT, Bhopal V. M/s. Devi Shakuntala Thakral Charitable Foundation, Bhopal

ITA 424/IND/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 6009 (ITAT-INDORE)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 04-08-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 18-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: S S DESH
• Keywords: Depreciation; Charitable institution

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI B.R. KAUSHIK, ACCOUNTANT MEMBER ITA NOS.424 AND 447/IND/2009 A.YS. 2004-05 AND 2005-06 ASSTT. COMMISSIONER OF INCOME TAX 3(1), BHOPAL APPELLANT VS M/S DEVI SHAKUNTALA THAKRAL CHARITABLE FOUNDATION, BHOPAL PAN AAATD-2943-B RESPONDENT APPELLANT BY : SMT. APARNA KARAN, SR. DR RESPONDENT BY : SHRI S.S. DESHPANDE, CA O R D E R PER JOGINDER SINGH, JM THESE APPEALS ARE BY THE REVENUE AGAINST THE ORDERS OF THE LEARNED CIT(A) DATED 17.4.2009 AND 15.7.2009, RESPE CTIVELY, ON THE GROUND THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.31,08,381/ - (A.Y. 2004-05) AND OF RS.43,17,398/- (A.Y. 2005-06) MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DEPRECIATION WHILE COST OF SUCH ASSETS HAD ALREADY BEEN CLAIMED AS APPLICATION OF INCOME. 2 2. DURING HEARING OF THESE APPEALS WE HAVE HEARD SM T. APARNA KARAN, LEARNEDSR. DR AND SHRI S.S. DESHPANDE, LD. C OUNSEL FOR THE ASSESSEE. AT THE OUTSET IT WAS CLAIMED THAT THE IM PUGNED ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF M.P. MADHYAM (ITA NO. 458/IND/2008) ORDER DATED 27.5.2009, ITA N O. 712/IND/2007 ORDER DATED 18.7.2008 AND THE CASE OF SHRI SATHYA S AI TRUST V. ACIT (ITA NO. 05/IND/2009) ORDER DATED 23.4.2010. THIS FACTUAL MATRIX WAS CONSENT TO BE CORRECT BY THE LEARNED SENIOR DR. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. IN VIEW OF THE AFORESAID ASSERTION/ADMISSI ON, WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION OF THE ORDER DATED 2 3 RD APRIL, 2010 :- 4. IN GROUND NOS. 2 & 3, THE ASSESSEE IS AGGRIEVED BY THE DECISION OF THE LD. CIT(A) IN REJECTING ITS CLAIM O F DEPRECIATION OF RS. 48,17,856/-. 5. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS A SOCIETY REGISTERED U/S 12-A AND ENTITLED FOR EXEMPTION U/S 11. THE ASSESSEE COMPANY CLAIMED DEPRECIATION ON ASSETS, WH ICH THE A.O. DISALLOWED FOR THE REASON THAT THE SAME COUL D NOT BE CONSIDERED AS APPLICATION OF INCOME. THE A.O. ALSO HELD THAT SINCE THE FIXED ASSETS WERE ACQUIRED OUT OF APPLICA TION OF INCOME, WHEREON THE ASSESSEE HAD CLAIMED EXEMPTION U/S 11, HENCE, THE DEPRECIATION ON THE SAME WOULD AMOUNT TO DOUBLE DEDUCTION. THE A.O. RELIED ON THE DECISION OF THE H ON'BLE SUPREME COURT IN THE CASE OF ESCORTS LIMITED VS. UN ION OF INDIA AS REPORTED IN 199 ITR 43 FOR THIS VIEW. AGGR IEVED BY THIS, THE ASSESSEE CARRIED THE MATTER INTO APPEAL B EFORE THE LD. CIT(A), WHO ALSO CONFIRMED THE ACTION OF THE A. O. THE LD. CIT(A) ALSO HELD THAT THE DECISIONS OF THE TRIB UNAL AND VARIOUS HON'BLE HIGH COURTS RELIED ON BY THE ASSESS EE WERE 3 NOT TO BE CONSIDERED IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LIMITED (SUPRA ). AGGRIEVED BY THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LEARNED COUNSEL FOR THE ASSESSEE NARRATED TH E FACTS AND SUBMITTED THAT THE ISSUE WAS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN THE CA SE OF M.P. MADHYAM IN I.T.A.NO. 712/IND/2007 AND IN THE CASE O F ACIT VS. SOCIETY OF PILLAR IN I.T.A.NO. 59/IND/2008 ORDE R DATED 18 TH JULY, 2008. HE ALSO REFERRED TO THE DIFFERENT ORDE RS OF THE TRIBUNAL IN THE CASE OF NATIONAL CENTRE FOR HUM AN SETTLEMENT AND ENFORCEMENT VS. ACIT, IN I.T.A.NO. 163/IND/2009 AND BHOPAL SCHOOL OF SOCIAL SCIENCES V S. ACIT IN I.T.A.NO. 164/IND/2009 ORDER DATED 19 TH JUNE, 2009, WHEREIN THE TRIBUNAL AFTER CONSIDERING THE AFORESAI D DECISION OF THE HON'BLE SUPREME COURT AND VARIOUS O THER JUDICIAL DECISIONS HAD DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE LEARNED COUNSEL DREW OUR ATTENTION TO RELEVANT PARAS OF THE SAID ORDERS OF THE TRIBUNAL. 7. THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT THIS CLAIM OF THE ASSESSEE. HOWEVER, SHE PREFERRED TO RELY ON THE ORDER OF THE LD. CIT(A). 8. WE FIND THAT THE TRIBUNAL IN THE AFORESAID DECIS IONS RELIED ON BY THE ASSESSEE, AS AFTER CONSIDERING THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LIMITED (SUPRA), HAS HELD THAT THE ASSESSEE WAS ELIGIBLE FO R ALLOWANCE OF CLAIM OF DEPRECIATION SO AS TO COMPUTE PROPER INCOME OF THE CHARITABLE TRUST. HENCE, RESPECTFULLY FOLLOWING THE SAME, WE ALLOW BOTH THESE GROUNDS OF THE ASSESSEE. IN THE AFORESAID ORDER THE TRIBUNAL HAS PLACED RELI ANCE ON THE DECISION IN THE CASE OF M.P. MADHYAM (ITA NO. 712/IND/07), CASE OF ACIT V. SOCIETY OF PILLAR (ITA NO. 59/IND/08) DATED 18 TH JULY, 2008, NATIONAL CENTRE FOR HUMAN SETTLEMENT AND ENFORCEMENT V. ACI T (ITA NO. 163/IND/09) AND BHOPAL SCHOOL OF SCIENCES V. ACIT ( ITA NO. 164/IND/09) 4 ORDER DATED 19 TH JUNE,2009 WHEREIN THE DECISION OF THE HONBLE APEX COURT AND VARIOUS OTHER DECISIONS WERE DECIDED IN F AVOUR OF THE ASSESSEE. THE ORDER IN ITA NO. 712/IND/2007 DATED 18 TH JULY, 2008 IS PART OF THE PAPER BOOK FILED BY THE ASSESSEE WHEREI N THE DECISION RELIED ON BY THE LEARNED ASSESSING OFFICER OF THE APEX COU RT IN ESCORTS LIMITED V. UNION OF INDIA (199 ITR 43), HONBLE BOMBAY HIGH COURT IN CIT V. INSTITUTE OF BANKING (264 ITR 110), DIRECTOR OF INC OME TAX (EXEMPTION) V. FRAMJI CAWASJEE INSTITUTE; 109 CTR (BOM) 463 AND VARIOUS OTHER DECISIONS HAVE ALREADY BEEN CONSIDERED. RESPECTFULL Y FOLLOWING THE AFORESAID DECISIONS, SINCE THE ISSUE IS IDENTICAL, BOTH THESE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 5 TH AUGUST, 2010. SD SD (B.R. KAUSHIK) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER 5 TH AUGUST, 2010 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, G UARD FILE *DN/