ITO(E), New Delhi V. Dr. R.L. Khera Chartitable Trust, Delhi

ITA 4427/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53285 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 07-12-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 04-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALIL MISHRA
• Keywords: Depreciation; Charitable institution
• Section: 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F: NEW DELHI BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER I.T.A.NO.4427/DEL/2011 ASSESSMENT YEAR : 2007-08 ITO (E) VS. DR. R.L. KHERA CHARITABLE TRUST TRUST WARD-III, PANDAV NAGAR LAXMI NAGAR, NARAINA ROAD, DISTT. CENTRE, NEAR SHADIPUR DEPOT NEW DELHI DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SALIL MISHRA , SR.DR RESPONDENT BY : SHRI HIREN MEHTA, C A ORDER ORDER ORDER ORDER PER U.B.S. BEDI, J.M. PER U.B.S. BEDI, J.M. PER U.B.S. BEDI, J.M. PER U.B.S. BEDI, J.M. THIS APPEAL OF THE DEPARTMENT IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) XXI, NEW DELHI DATED 27.7.20 11 RELEVANT TO ASSTT. YEAR 2007-08 RAISING THE SINGLE GROUND THAT CIT( A) HAS ERRED IN ALLOWING DEPRECIATION AMOUNTING TO `.93,70,596/- ON CERTAIN FIXED ASSETS PARTICULARLY WHEN FULL COST OF SUCH ASSETS STOOD ALLO WED IN EARLIER YEARS AS APPLICATION OF INCOME AND FURTHER AL LOWANCE BY WAY OF DEPRECIATION WOULD NOW RESULT IN ALLOWING DOUBLE DED UCTION. ITA NO. 4427/DEL/11 ASSTT. YEAR 2007-08 2 2. FACTS INDICATE THAT IT HAS BEEN NOTICED AND OBSERVE D BY THE AO THAT ACTIVITY OF THE SOCIETY COMES UNDER THE PURVIEW OF PROVISION OF SECTION 2(15) OF THE INCOME TAX ACT AND ENTITLED FOR EXEMPTION U/S 11 OF THE INCOME TAX ACT AND HAS ALLOWED BENEFIT OF SECT ION 11 & 12 OF THE INCOME TAX ACT. HOWEVER, DEPRECIATION HAS NOT BE EN ALLOWED TO THE ASSESSEE AND AO IN THE BODY OF THE ORDER, HAS MENTI ONED THAT ALLOWING DEPRECIATION WILL AMOUNT TO DOUBLE DEDUCTI ON. AGAINST WHICH THE ASSESSEE PREFERRED AN APPEAL AND FILED DETAILED WRI TTEN SUBMISSIONS WHEREIN RELIANCE WAS PLACED ON, 198 ITR 598 (GUJ.), CIT VS SHETH MANILAL RANCHHODDAS VISHRAM BHAVAN TRUST, KARN ATAKA HIGH COURT IN CIT VS. SOCIETY OF THE SISTERS OF ST. ANNE (1 984) 146 ITR 28, CIT VS. RAO BAHADUR CALAVALA CUNNAN CHETTY CHARITIES (1982) 135 ITR 485 THE MADRAS HIGH COURT, CIT VS. INSTITUTE OF BANKIN G PERSONNEL SELECTION, TAXMAN 386 (BOM.), DIRECTOR OF INCOME TA X (EXEMPTION) VS. FRAMJEE CAWASJEE INSTITUTE, 109 CTR 463 (BOM.), C IT VS. M/S. TINY TOTS EDUCATION SOCIETY IN ITA NO. 93 OF 2010, THE HO NBLE PUNJAB & HARYANA HIGH COURT VIDE ITS ORDER DATED 28.7.2010 IN ORDER TO PLEAD THAT CLAIM OF THE ASSESSEE SHOULD BE ALLOWED AND LD. CIT (A) WHILE CONSIDERING AND ACCEPTING THE APPEAL OF THE ASSESSEE WHI LE MAINLY RELYING UPON PUNJAB & HARYANA HIGH COURT IN THE CA SE OF CIT VS. M/S. TINY TOTS EDUCATION SOCIETY HAS CONCLUDED TO ALLOW TH E APPEAL AS PER PARA 4.1 OF THE ORDER AS UNDER :- ITA NO. 4427/DEL/11 ASSTT. YEAR 2007-08 3 4.1 I HAVE GONE THROUGH THE FINDING OF THE AO IN T HE ASSESSMENT ORDER AND WRITTEN SUBMISSION OF THE LD. AR. IN MY CONSIDERED OPINION, CASE LAWS RELIED UPON BY THE LD . AR ARE APPRECIATED, SPECIALLY, JUDGMENT OF THE HONB LE PUNJAB & HARYANA HIGH COURT IN THE CASE OF TINY TOTS EDUCATION SOCIETY, REPORTED AT 330-ITR-21 IS VERY MU CH RELEVANT IN THIS CASE, WHEREIN, IN PARA 9 OF THE ORDE R THE HONBLE P & H HIGH COURT HAS DISTINGUISHED THE JUDGMEN T OF HONBLE SUPREME COURT IN THE CASE OF ESCORTS LTD. & OTHERS AS UNDER :- 9. IN THE PRESENT CASE THE ASSESSEE IS NOT CLAIMING DOUBLE DEDUCTION ON ACCOUNT OF DEPRECIATION AS HAS BEEN SUGGESTED BY LEARNED COUNSEL FOR THE REVENUE. THE INCOME OF THE ASSESSEE BEING EXEMPT, THE ASSESSEE IS ONLY CLAIMING THAT DEPRECIATION SHOULD BE REDUCED FROM THE INCOME FOR DETERMINING THE PERCENTAGE OF FUNDS WHICH HAVE TO BE APPLIED FOR THE PURPOSES OF THE TRUST. THERE IS NO DOUBLE DEDUCTION CLAIMED BY THE ASSESSEE AS CANVASSED BY THE REVENUE. JUDGMENT OF THE HONBLE SUPREME COURT IN ESCORTS LTD. AND ANOTHER (SUPRA) IS DISTINGUISHABLE FOR THE ABOVE REASONS. IT CANNOT BE HELD THAT DOUBLE BENEFIT IS GIVEN IN ALLOWING CLAIM FOR DEPRECIATION FOR COMPUTING INCOME FOR PURPOSES OF SECTION 11. THE QUESTIONS PROPOSED HAVE, THUS, TO BE ANSWERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. 3. AGGRIEVED BY THIS ORDER OF LD. CIT(A), DEPARTMENT HAS COME UP IN APPEAL AND WHILE RELYING UPON THE GROUND RAISED I N THE MEMORANDUM OF APPEAL, IT WAS PLEADED FOR SETTING ASIDE THE ORDER OF LD. CIT(A ) AND RESTORING THAT OF THE AO BECAUSE IN C ASE CLAIM OF THE ASSESSEE IS ALLOWED THAT WOULD AMOUNT TO DOUBLE DEDUCTIO N. 4. LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF LD. CIT(A) AND PLEADED FOR ITS CONFIRMATION AS NOT ONLY ONE HIGH COURT BUT VARIOUS HIGH COURTS HAVE ALSO TAKEN THE SIMILAR VIEW AND LD. CIT(A) ITA NO. 4427/DEL/11 ASSTT. YEAR 2007-08 4 HAS PLACED RELIANCE UPON LATEST DECISION OF HONBLE P & H HIGH COURT TO ALLOW THE APPEAL OF THE ASSESSEE WHOSE ORDER SHOULD BE UPHELD AND THE APPEAL OF THE REVENUE MAY BE DISMISSED. 5. WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MATERI AL ON RECORD AS WELL AS PRECEDENT RELIED UPON BEFORE FIRST A PPELLANT AUTHORITY AND REITERATED BEFORE US AND FIND THAT LD. CIT(A) HAS TAKEN A JUST AND APPROPRIATE VIEW TO DECIDE THE ISSUE IN FAVOU R OF THE ASSESSEE. NO CONTRARY DECISION OF THE JURISDICTIONAL HIGH COURT OR HIGHER COURT HAS BEEN PLACED BEFORE US. THEREFORE, WH ILE CONCURRING WITH THE FINDING AND CONCLUSION AS DRAWN BY THE LD. C IT(A), WE UPHOLD THE ORDER AND DISMISS THE APPEAL OF THE REVENUE. 6. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED SOON AFTER THE CONCLUSION OF HEARIN G ON 9 TH DECEMBER,2011. SD/- SD/- (B.C. MEENA) ACCOUNTANT MEMBER (U.B.S. BEDI) JUDICIAL MEMBER DATED : 9.12.2011 VEENA COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER DEPUTY REGISTRAR, ITAT