ITO (E), New Delhi V. M/s. Mair Rajput Educational Society, New Delhi

ITA 4243/DEL/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6621 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 2
• Next Hearing Date: 18-10-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 02-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Depreciation; Charitable institution; Capital expenditure
• Section: 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC - II , NEW DELHI BEFORE SH. N. K. SAINI, A CCOUNTANT M EMBER ITA NO. 4243/DEL/2016 : ASSTT. YEAR : 2011 - 1 2 INCOME TAX OFFICER (E), WARD - 1(4) , NEW DELHI - 110002 VS M/S MAIR RAJPUT EDUCATIONAL SOCIETY, LD - 188, PITAMPURA, NEW DELHI - 110088 (APPELLANT) (RESPONDENT) PAN NO. A A A TM1395C ASSESSEE BY : NONE REVENUE BY : SH. RAJESH KUMAR , SR. DR DATE OF HEARING : 18.10 .201 6 DAT E OF PRONOUNCEMENT : 25 .11 .201 6 ORDER THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORDER DATED 26.05.2016 OF LD. CIT(A) - 36 , NEW DELHI . 2. DURING THE COURSE OF HEARING NOBODY WAS PRESENT ON BEHALF OF THE ASSESSEE NEITHER ANY ADJO URNMENT WAS SOUGHT. I, THEREFORE, PROCEEDED EX - PARTE QUA THE ASSESSEE AND THE APPEAL IS DECIDED ON MERIT AFTER HEARING THE LD. DR. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE AO DISALLOWED THE DEPRECIATION AMOUNTING TO RS.36,57,672/ - BY OBSERVING THAT THE ASSESSEE HAD CLAIMED DEPRECIATION ALONGWITH CLAIM OF FIXED ASSETS IN ITS BOOKS OF ACCOUNTS WHICH TANTAMOUNT TO DOUBLE DEDUCTION. DURING THE COURSE OF HEARING NOBODY WAS PRESENT ON BEHALF OF THE ASSESSEE. ITA NO . 4243 /DEL /201 6 MAIR RAJPUT EDUCA TIONAL SOCIETY 2 4 . BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER T O THE LD. CIT(A) AND SUBMITTED AS UNDER: THAT BY FINANCE (NO. 2) ACT OF 2014, SUB - SECTION (6) TO SECTION 11 STANDS INSERTED W.E.F 01.04.2015 TO THE EFFECT THAT WHERE ANY INCOME IS REQUIRED TO BE APPLIED, ACCUMULATED OR SET APART FOR APPLICATION, THEN FOR SUCH PURPOSES THE INCOME SHALL BE DETERMINED WITHOUT ANY DEDUCTION OR ALLOWANCE BY WAY OF DEPRECIATION OR OTHERWISE IN RESPECT OF AN ASSET, THE ACQUISITION OF WHICH HAS BEEN CLAIMED AS APPLICATION OF INCOME UNDER THIS SECTION IN THE SAME OR ANY OTHER P RE VIOUS YEAR. THE SECTION 11(6), WHICH HAS BEEN INSERTED, IS APPLICABLE WITH EFFECT FROM 01.04.2015 AND NOT TO THE ASSESSMENT YEAR IN QUESTION. THE ASSESSEE RELIED ON THE ORDER OF DELHI HIGH COURT IN THE CASE OF DIT(E) VS. M/S. INDRAPRASTHA CANCER SOC IETY & OTHERS', DATED 18.11.2014. 5 . THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS ALLOWED THE CLAIM OF THE ASSESSEE AND DELETED THE ADDITION MADE BY THE AO BY OBSERVING IN PARA 6 OF THE IMPUGNED ORDER AS UNDER : 6. ON THE ISSUE OF CLAIMING DEPRECIAT ION ON THE CAPITAL ASSETS WHERE THE ENTIRE CAPITAL EXPENDITURE HAS ALREADY BEEN CLAIMED AS A DEDUCTION AS APPLICATION OF INCOME U/S. 11(1), I FEEL IT IS NOT CORRECT. THE SECTION HAS ALSO NOW BEEN AMENDED BY THE I.T ACT W.E.F. 01.04.2015. THIS VIEW HAS BEEN SUPPORTED BY THE HON'BLE KERALA HIGH COURT IN THE CASE OF LISSIE MEDICAL INSTITUTIONS VS. CIT, 348 ITR 344 (KER) (2012) AND THE HON'BLE DELHI HIGH COURT IN THE CASE OF DIT(EXEMPTION) VS. CHARANJIV CHARITABLE TRUST IN IT APPEAL NO. 321 TO 323 OF 2013 VIDE THE ORDER DATED 18.03.2014 WHERE THE HON'BLE COURTS HAVE NOT ALLOWED THE DEPRECIATION IN THE CASE OF CHARITABLE INSTITUTIONS AS THE SAME WAS CONSIDERED AS A DOUBLE DEDUCTION. THE AO HAD CORRECTLY MADE THE DISALLOWANCE AS BY THE DATE OF ASSESSMENT ORDER DAT ED 28.03.20 1 4, THE ORDER OF THE HON'BLE HIGH COURT IN CASE OF INDRAPRASTHA CANCER SOCIETY & OTHERS DATED 18.11.2014 WAS NOT AVAILABLE. THE HON'BLE DELHI HIGH COURT IN THE SUBSEQUENT AND LATEST DECISION IN THE CASE OF ITA NO . 4243 /DEL /201 6 MAIR RAJPUT EDUCA TIONAL SOCIETY 3 DIT(EXEMPTION) VS. INDRAPRASTHA CANCER SOCIETY AND OTHERS IN ITA NO. 240, 348, 406, 463 & 464/2014 VIDE THE ORDER DATED 18.11.2014 HAS HELD THAT THE ASSESSEE IS ELIGIBLE FOR DEPRECIATION ALSO, IN THE CASE OF CHARITABLE OR RELIGIOUS INSTITUTION WHERE EVEN THE ACQUISITION OF ASSETS HAS BEEN CLAIM ED AS APPLICATION OF INCOME. IN THIS ORDER, THE DELHI H.C HAS DISCUSSED ALL PREVIOUS CASES AND ALSO THE AMENDMENTS BROUGHT IN THE INCOME TAX ACT W.E.F. 01.04.2015. THE APPEAL OF THE APPLICANT IS THEREFORE TO BE ALLOWED REGARDING THE CLAIM OF DEPRECIATION I N VIEW OF THE LATEST ORDER OF THE HON'BLE DELHI HIGH COURT, IN THE CASE OF INQRAPRASTHA CANCER SOCIETY DATED 18.11.2014, FOLLOWING JUDICIAL DISCIPLINE. 6 . NOW THE DEPARTMENT IS IN APPEAL. THE LD. DR SUPPORTED THE ORDER OF THE AO BUT COULD NOT CONTROVERT THE FINDINGS GIVEN BY THE LD. CIT(A). 7 . AFTER CONSIDERING THE SUBMISSIONS OF THE LD. DR AND GO ING THROUGH THE MATERIAL AVAILABLE ON THE RECORD. I AM OF THE CONFIRMED VIEW THAT THE FINDINGS GIVEN BY THE LD. CIT(A) DO NOT REQUIRE ANY INTERFERENCE. ACCORD INGLY, I DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT. 8 . IN THE RESULT, THE APPEAL FILED BY THE DEPARTMENT IS DISMISSED. (O RDER PRONOUNCED IN THE COURT ON 25 /11 /2016 ) SD/ - (N. K. SAINI) ACCOUNTANT MEMBER DAT ED: 25 /11 /2016 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR