ACIT(E), Jaipur V. JAIPUR DEVELOPMENT AUTHORITY, Jaipur

ITA 438/JPR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2117 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 29-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA
• Assessee Lawyers: TARUN AGARWAL CA LQUOKB
• Keywords: Depreciation; Capital expenditure
• Section: 143(3); 12; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 438/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14. THE ACIT (E), CIRCLE, JAIPUR. CUKE VS. M/S. JAIPUR DEVELOPMENT AUTHORITY JLN MARG, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAATJ 4598 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI VARINDER MEHTA (CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SHYAM LAL AGARWAL (CA) & SHRI TARUN AGARWAL (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 30.08.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 04/09/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL BY THE BY THE REVENUE IS FILED AGAINST THE ORDER OF LD. CIT (A)-3, JAIPUR DATED 31.03.2017 PERTAINING TO ASSESSMENT YE AR 2013-14. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT (A) HAS ERRED IN 1) ALLOWING CLAIM OF DEPRECIATION ON FIXED ASSETS IN S PITE OF THE FACT THAT THE SAME WAS ALLOWED AS APPLICATION OF IN COME U/S 11 AT THE TIME OF PURCHASE. 2) ALLOWING DEPRECIATION WITHOUT APPRECIATING THE FACT THAT THE APPLICATION OF 100% EXPENDITURE OF THE CAPITAL ASSE T IS ALREADY ALLOWED AS CAPITAL EXPENDITURE HENCE FURTHE R ALLOWANCE OF THE DEPRECIATION ON THE SAME CAPITAL A SSET WOULD AMOUNT TO DOUBLE ALLOWANCE. 2 ITA NO. 438/JP/2017 JAIPUR DEVELOPMENT AUTHORITY, JAIPUR. 3) ALLOWING DEPRECIATION WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS NOT CARRIED OUT THE BUSINESS ACTIVITIE S BUT THE RECEIPTS UTILIZED FOR CHARITY. AS THERE WAS NO BUS INESS ACTIVITY THE CLAIM OF DEPRECIATION WAS NOT ALLOWABL E, THE DEPRECIATION IS ALLOWABLE ONLY IN THE CASE OF BUSIN ESS OR PROFESSION OR IN THE CASE OF INCOME FROM OTHER SOU RCES. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMEN T UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS TH E ACT) WAS FRAMED VIDE ORDER DATED 29.03.2016. WHILE FRAMING THE ASSESSMENT, TH E AO COMPUTED THE TAXABLE INCOME AT RS. 467,89,22,649/- AND DENIED THE CLAIM OF DEDUCTION UNDER SECTIONS 11 AND 12 OF THE ACT. AGAINST THIS, THE ASSESSEE PREF ERRED AN APPEAL BEFORE BEFORE LD. CIT (A), WHO AFTER CONSIDERING THE SUBMISSIONS AND FOLLOWING THE DECISION OF THE TRIBUNAL PARTLY ALLOWED THE APPEAL. AGGRIEVED BY TH IS, THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL. 3. THE LD. D/R SUPPORTED THE ORDER OF THE AO. 3.1. ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE O RDERS OF THE COORDINATE BENCH OF THE TRIBUNAL. HE REITERATED THE SUBMISSIONS AS MAD E IN THE WRITTEN BRIEF. 4. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE MAT ERIAL ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FI ND THAT LD. CIT (A) HAS IN PARA 4.3 OF HIS ORDER HAS OBSERVED AS UNDER :- 4.3. I HAVE CAREFULLY CONSIDERED THE FINDINGS O F THE AO AS ALSO ARGUMENTS OF THE LD. AR OF THE APPELLANT. IT IS SEE N THAT ALL THE ISSUES RAISED IN THIS APPEAL ARE COVERED BY THE DECISION O F HONBLE ITAT JAIPUR IN ITA NO. 427 AND 447/JP/2013 FOR AY 2009-10 DATED 04.01.2016. THE HONBLE ITAT JAIPUR HAS HELD AS UNDER :- 3 ITA NO. 438/JP/2017 JAIPUR DEVELOPMENT AUTHORITY, JAIPUR. THE ASSESSEE HAS BEEN GRANTED REGISTRATION BY TH E ORDER OF THE COORDINATE BENCH IN ITA NO. 927/JP/2007 ORDER DATED 30/05/2008 W.E.F. 14.03.2007 WHEREIN THE COORDINATE BENCH HAS HELD THAT THE ASSESSEES ACTIVITIES ARE CHARITABLE AND ARE NOT CO VERED U/S 2(15) OF THE ACT. THEREFORE, THE ASSESSING OFFICER IS DIRECTED T O GIVE BENEFIT OF SECTION 11 AND 12 OF THE ACT TO THE ASSESSEE. THE INCOME OF THE ASSESSEE IS TO BE ASSESSED ON THE REAL INCOME BASIS WHICH HAS BEEN ACCRUED TO THE ASSESSEE DURING THE YEAR UNDER CONSI DERATION. THE APPELLANT HAD CHANGED METHOD OF ACCOUNTING DURING T HE YEAR UNDER CONSIDERATION BUT THE SAME HAS BEEN FOUND MORE ACCU RATE AND SCIENTIFIC TO DETERMINE THE ASSESSEES INCOME. THE REFORE, CHANGE OF ACCOUNTING IS BONAFIDE AND SAME CANNOT BE REJECTED ON THE GROUND THAT THE ASSESSEE HAD CLAIMED MORE EXPENSES DURING THE YEAR UNDER CONSIDERATION. THE CASE LAW RELIED BY THE ASSESSEE IS SQUARELY APPLICABLE. A CHANGE IN THE METHOD OF ACCOUNTING SH OULD NOT BE REJECTED FOR REASONS THAT IT WOULD RESULT IN BRINGI NG INTO ACCOUNTS IN ONE YEAR THE LOSSES OF SEVERAL YEARS AS HELD IN THE CASE OF CIT VS. EASTERN BENGAL JUTE TRADING CO. LTD. (1978) 112 ITR 575 (CAL.). ACCORDINGLY CHANGE OF THE ACCOUNTING POLICY IS ALLO WED. THE ASSESSEE HAS CLAIMED DEPRECIATION ON FIXED ASSE TS WHICH IS ALSO ALLOWABLE AS HELD BY THE VARIOUS COURTS IN CAS E OF TRUST WHERE THE ASSESSEE FIRST MADE INCOME FOR APPLICATION OF ACQUI RING OF ASSETS AND THEREAFTER CLAIMING DEPRECIATION ON IT. ACCORDINGLY , WE ALLOW THE ASSESSEES APPEAL AND DISMISS THE REVENUES APPEAL. FROM THE ABOVE IT IS CLEAR THAT LD. CIT (A) HAS FOL LOWED THE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL. THE REVENUE HAS NOT BROUGH T ANY OTHER CONTRARY BINDING PRECEDENT, THEREFORE, WE DO NOT SEE ANY REASON TO I NTERFERE INTO THE FINDING OF LD. CIT (A), SAME IS HEREBY AFFIRMED ON THIS ISSUE. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER IS PRONOUNCED IN THE OPEN COURT ON 04.09.2 017. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 04/09/2017. DAS/ 4 ITA NO. 438/JP/2017 JAIPUR DEVELOPMENT AUTHORITY, JAIPUR. VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE ACIT (EXEMPTION), CIRCLE, JA IPUR. 2. THE RESPONDENT M/S. JAIPUR DEVELOPMENT AUTHORI TY, JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 438/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 5 ITA NO. 438/JP/2017 JAIPUR DEVELOPMENT AUTHORITY, JAIPUR.