ACIT (E) I(1), MUMBAI V. DAWAT-E-HADIYAH, MUMBAI

ITA 4333/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2450 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2009-2010
• Appeal Filed On: 13-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK JOHARI
• Assessee Lawyers: F B ANDHYARUJINA
• Keywords: Capital asset; Depreciation; Charitable institution
• Section: 12A; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH J, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AN D SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.4333/M/2015 ASSESSMENT YEAR: 2009-10 ACIT(E)-I(1), R.NO.504, PIRAMAL CHAMBERS, 5 TH FLOOR, PAREL, MUMBAI - 12 VS. M/S. DAWAT-E-HADIYAH, BADRI MAHAL, 3 RD FLOOR, DR. D.N. ROAD, FORT, MUMBAI 300 009 PAN: AAATD1489N (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI F.B. ANDHYARUJINA, A.R. REVENUE BY : SHRI ALOK JOHARI, D.R. DATE OF HEARING : 18.07.2016 DATE OF PRONOUNCEMENT : 22.07.2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENU E AGAINST THE ORDER DATED 27.04.2015 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2009-10. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A CHARITABLE TRUST REGISTERED UNDER SECTION 12A OF THE INCOME-TAX ACT, 1961. DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE INVESTED IN FIXED ASSETS AND CLAIMED APPLICATION OF INCOME AND FURTHER CLAIMED DEPRECATION ON THE SAME FIXED ASSETS. THE ASSESSIN G OFFICER HELD THAT THE ALLOWANCE OF DEPRECIATION WOULD AMOUNT TO DOUBLE DE DUCTION. THE LD. CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE. THE REVENUE, THUS, HAS COME IN APPEAL BEFORE US. ITA NO.4333/M/2015 M/S. DAWAT-E-HADIYAH 2 3. THE REVENUE HAS TAKEN AS MANY AS 7 GROUNDS OF AP PEAL. BUT ONLY TWO EFFECTIVE ISSUES HAVE BEEN RAISED. THE FIRST ISSUE IS WHETHER THE ASSESSEE TRUST IS ENTITLED TO THE CLAIM OF DEPRECIATION ON CAPITAL ASSETS, EXPENDITURE IN RESPECT OF WHICH HAS ALREADY BEEN CLAIMED BY THE ASSESSEE A S APPLICATION OF INCOME. THE SECOND ISSUE IS AS TO WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW, THE ASSESSEE TRUST IS ENTITLED TO CLAIM TH E CARRY FORWARD AND SET OFF OF DEFICIT OF EARLIER YEARS ON ACCOUNT OF EXCESS EXPEN DITURE/APPLICATION OF INCOME. 4. THE LD. A.R., AT THE OUTSET, HAS STATED AT BAR T HAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE EARLIER DE CISION OF THE TRIBUNAL IN THE OWN CASE OF THE ASSESSEE DATED 30.07.15 FOR A.Y. 20 10-11 AND A.Y. 2011-12. BOTH THE ISSUES CAME UNDER CONSIDERATION BEFORE THE TRIBUNAL AND THE TRIBUNAL WHILE RELYING UPON VARIOUS DECISIONS OF THE HONBLE BOMBAY HIGH COURT INCLUDING THAT OF CIT VS. INSTITUTE OF BANKING PER SONNEL SELECTION (2003) 264 ITR 110 (BOMBAY) AND DIT (E) VS. M/S. NAJAM BA UG TRUST ITA NO.60 OF 2013 VIDE ORDER DATED 14.01.15 HAS DECIDED BOTH THE ISSUES IN FAVOUR OF THE ASSESSEE. THE TRIBUNAL HAS NOTED THAT THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. INSTITUTE OF BANKING PERSONNEL SEL ECTION (SUPRA) HAS HELD THAT A TRUST CAN CLAIM DEPRECATION ON ASSETS, EVEN IF, C OST OF ASSETS HAS BEEN FULLY ALLOWED AS APPLICATION OF INCOME UNDER SECTION 11 O F THE ACT IN PAST YEARS AND THAT THERE IS NO QUESTION OF DOUBLE DEDUCTION IN AL LOWING THE DEPRECIATION IN RESPECT OF ASSETS ACQUIRED AND USED BY THE TRUST. 5. WE FIND THAT IN THE CASE OF DIT(E) VS. NAJAM BA UG TRUST (SUPRA) THE HONBLE BOMBAY HIGH COURT HAS, WHILE RELYING UPON T HE DECISION IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPR A) HAS HELD THAT THE ASSESSEE IS ENTITLED TO CLAIM CARRY FORWARD LOSSES/DEFICIT O N ACCOUNT OF EXCESS EXPENDITURE/APPLICATION OF INCOME IN EARLIER YEARS. WE FURTHER FIND THAT THE TRIBUNAL HAS ALSO DISCUSSED IN THE OWN CASE OF ASSE SSEE, THE EFFECT OF THE AMENDMENT BROUGHT VIDE FINANCE (NO.2) ACT, 2014 IN SECTION 11(6) OF THE ACT WHEREIN IT HAS BEEN PROVIDED THAT DEPRECIATION WILL NOT BE ALLOWED WHILE ITA NO.4333/M/2015 M/S. DAWAT-E-HADIYAH 3 COMPUTING APPLICATION OF INCOME W.E.F. APRIL 1, 201 5. THE TRIBUNAL WHILE RELYING UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF INDRA PRASSTHA CANCER SOCIETY IN ITA NO.240 OF 20 14 ORDER DATED NOVEMBER 18, 2014 THAT THE AMENDED PROVISIONS ARE APPLICABLE W.E.F. THE ASSESSMENT YEAR 2015-16 AND THE SAME WILL NOT HAVE ANY APPLICABILIT Y FOR THE ASSESSMENT YEARS PRIOR TO A.Y. 2015-16. THE LD. D.R. HAS ALSO FAIRL Y ADMITTED THAT BOTH THE ISSUES ARE SQUARELY COVERED IN FAVOUR OF THE ASSESS EE BY VARIOUS DECISIONS OF THE JURISDICTIONAL HIGH COURT AS WELL AS THE DECISI ON OF THE TRIBUNAL IN THE OWN CASE OF THE ASSESSEE. 6. IN VIEW OF THIS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND THE APPEAL OF THE DEPARTMENT IS THEREFOR E DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.07.2016. SD/- SD/- (D. KARUNAKARA RAO) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 22.07.2016. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.