LATE SMT. RADHIKABAI MEGHE MAHILA SHIKSHAN SANSTHA, Nagpur V. THE ITO, WARD- 1(4), Nagpur

ITA 43/NAG/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3582 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-06-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 09-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Assessee Lawyers: L S DEWANI
• Keywords: Depreciation; Question of law; Capital expenditure
• Section: 32

Judgement Text

1 ITA NO. 43/NAG/2015. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO.43/NAG/2015. ASSESSMENT YEAR : 2007 - 08. LATE SMT. RADHIKABAI MEGHE MAHILA THE INCOME - TAX OFFICER, SHIKSHAN SANSTH, NAGPUR. VS. WARD - 1(4), NAGPUR. PAN AAATS7328F. APPELLANT. RESPONDENT. APPELLANT BY : SHRI L.S. DEWANI. RESPONDENT BY : SHRI A.R. NINAWE. DATE OF HEARING : 15 - 06 - 2016 DATE OF PRONOUNCEMENT : 15 TH JUNE, 2016 O R D E R PER SHRI SHAMIM YAHYA, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) - I, NAGPUR DATED 02 - 12 - 2014 AND PERTAINS TO ASSESSMENT YEAR 2007 - 08. THE ISSUE RAISED IS GROUND NO. 2 WHICH READS AS UNDER : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION MADE BY A.O. AT RS.26,33,663/ - ON ACCOUNT OF DEPRECIATION CLAIMED BY ASSESSEE IN THE INCOME AND EXPENDITURE ACCOUNT. 2. BRIEF FAC T S OF THE CASE ARE AS UNDER : THE ASSESSEE IS A TRUST RUNNING AN EDUCATIONAL INSTITUTION. THE TRUST HAS CLAIMED AN EXEMPTION U/S 10(23C)(VI) WHICH HAS BEEN APPROVED BY THE CCIT, 2 ITA NO. 43/NAG/2015. NAGPUR. THE ASSESSEE HAS CLAIMED CAPITAL EXPENDITURE OF RS.1,57,44,391/ - AND DEPRECIATION OF RS.26,33,682/ - . SINCE THE CAPITAL EXPENDITURE INCURRED IS ALLOWED, FURTHER DEPRECIATION CLAIMED BY THE APPELLANT WAS DISALLOWED BY THE AO, IN VIEW OF THE HONBLE SUPREME COURT JUDGMENT IN THE CASE OF ESCORTS LTD. REPORTED IN 199 ITR 43 (SC), WHEREIN IT HAS BEEN HELD THAT EVEN UNDER PRE - AMENDED PROVISIONS, ONCE DEDUCTION U/S 35 IS ALLOWED, THE DEPRECI ATION U/S 32 IS NOT ALLOWABLE EITHER IN THE SAME YEAR OR IN THE PREVIOUS YEAR. THE AO, ACCORDINGLY, DISALLOWED THE CLAIM OF THE APPELLANT. 3. AGAINST THE ABOVE ORDER, ASSESSEE APPEALED BEFORE THE LEARNED CIT(APPEALS) . THE ASSESSEE SUBMITTED TO THE LEARNED CIT(APPEALS) THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE HONBLE BOMBAY HIGH COURT DECISION IN THE CASE OF CIT VS. INSTITUTE OF BANKING PERSONNEL SERVICES 264 I TR 110 AND DIT(E) VS. M/S INDO FRENCH CHAMBER OF COMMERCE & INDUSTRY DATED 16 - 01 - 2013. DESPITE THE ABOVE SUBMISSION LEARNED CIT(APPEALS) CHOSE TO NOT FOLLOW THE JURISDICTIONAL HIGH COURT DECISION. LEARNED CIT(APPEALS) OPINED THAT THE HONBLE APEX COURT DECISION IN THE CASE OF ESCORTS LTD. VS. UNION OF INDIA 199 ITR 43 SHOULD BE APPL IED AND THE ASSESSEE BE DENIED THE CLAIM OF DEPRECIATION DESPITE THE FACT BEING POINTED OUT TO HIM THAT HONBLE JURISDICTIONAL HIGH COURT HAS CONSIDERED THE ABOVE HONBLE APEX COURT DECISION. 4. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HONBLE BOMBAY HIGH COURT AND ITAT NAGPUR BENCH DECISION AS UNDER : 1. ITAT ORDER IN ITA NOS. 216 & 217/NAG/2013 IN T HE CASE OF VIDYARTHI SUDHAR SANGH VIDE ORDER DATED 20/05/2015. 2. HONBLE BOMBAY HIGH COURT ORDER IN ITA NO. 76 OF 2015 IN THE CASE OF VIDYARTHI SUDHAR SANGH VIDE ORDER DATED 11/01/201 6. 3 ITA NO. 43/NAG/2015. 3. HONBLE BOMBAY HIGH COURT ORDER IN ITA(L) NO. 1447 OF 2012 IN THE CASE OF M/S INDO FRENCH CHAMBER OF COMMERCE & INDUSTRY VIDE ORDER DATED 16 - 01 - 2013 4. (2013) 214 TAXMAN 0555 (BOM.) DIRECTOR OF INCOME TAX (EXEMPTION) VS. G.K.R. CHARITIES. 5. ITAT ORDER IN ITA NO. 4081/DEL/2012 IN THE CASE OF THE DELHI PUBLIC SCHOOL SOCIE TY VIDE ORDER DATED 19/10/2012. 6. AS REGARDS THE LEARNED D.RS REFERENCE TO HONBLE APEX COURT DECISION, WE FIND THAT THE SAID DECISION WAS WITH REFERENCE TO CLAIM OF 200% DEPRECIATION AND IN TERMS OF SECTION 35 OF I.T. ACT. MOREOVER, WE MAY ALSO HEREIN GAINFULLY REFER TO THE QUESTION OF LAW PROPOSED AND THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF DIT(E) VS. M/S INDO FRENCH CHAMBER OF COMMERCE & INDUSTRY IN ITA(L) NO. 1447 OF 2012 VIDE ORDER DATED 16 TH JANUARY, 2013, AS UNDER : 1. IN THIS APPEAL FILED BY THE REVENUE FOR ASSESSMENT YEAR 2007 - 2008, FOLLOWING QUESTION OF LAW HAS BEEN PROPOSED FOR OUR CONSIDERATION. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE TRIBUNAL WAS RIGHT IN IGNORING THE STAND OF THE REVENUE THAT ALLOWING OF DEPRECIATION ON THE SSETS, THE COST OF WHICH HAS ALREADY BEEN ALLOWED AS A DEDUCTION ON ACCOUNT OF APPLICATION OF INCOME, WOULD AMOUNT TO DOUBLE DEDUCTION IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ESCORTS LIMITED V/S. UNION OF INDIA, 199 ITR 43? 2. SINCE THE TRIBUNAL HAS FOLLOWED THE DECISION OF THIS COURT IN THE CASE OF COMMISSIONER OF INCOME TAX V/S INSTITUTE OF BANKING PERSONNEL SELECTION REPORTED IN 264 ITR 110, WE FIND NO REASON TO ENTERTAIN THE PRES ENT APPEAL. THE LEARNED ADVOCATE FOR THE REVENUE IS NOT ABLE TO DISTINGUISH THE SAID DECISION. 3. ACCORDINGLY, THE APPEAL IS DISMISSED WITH NO ORDER AS TO COST. 7. ACCORDINGLY WE HOLD THAT SINCE THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE HONB LE JURISDICTIONAL HIGH COURT DECISION, WE SET ASIDE THE ORDER OF LEARNED CIT(APPEALS) AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 4 ITA NO. 43/NAG/2015. 8. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DAY O F JUNE, 2016. SD/ - SD/ - (MUKUL K. SHRAWAT) ( SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER. NAGPUR, DATED: 15 TH JUNE, 2016. COPY FORWARDED TO : 1. LATE SMT. RADHIKABAI MEGHE MAHILA SHIKSHAN SANSTHA, ATRE LAYOUT, KHAMLA, NAGPUR. 2. I.T.O., WARD - 1(4), NAGPUR. 3. C.I.T. I, NAGPUR. 4. CIT(APPEALS), - I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.