ITO(E), Delhi V. Bureau of Indian Standards, New Delhi

ITA 445/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66041 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 06-12-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 30-01-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BHIM SINGH
• Assessee Lawyers: LALIT KRISHNAMURTHY
• Keywords: Depreciation; Charitable institution
• Section: 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI SHAMIM YAHHA, ACCOUNTANT MEMBER ITA NO.445/DEL /2012 (ASSESSMENT YEAR : 2008-09) ITO(E), VS. BUREAU OF INDIAN STANDARDS, NEW DELHI. MANAK BHAWAN, 9, BAHADUR SHAH ZAFAR MARG, NEW DELHI. (PAN/GIR NO.AAATB0431G) (APPELLANT) (RESPONDENT) ASSESSEE BY : LALIT KRISHNAMURTHY, CA REVENUE BY : SHRI BHIM SINGH, SR.DR ORDER PER U.B.S. BEDI, J.M. THIS APPEAL OF THE DEPARTMENT IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)- XXI, NEW DELHI DATED 21.12.2011, RELEVANT TO ASSESS MENT YEAR 2008-09, WHEREIN FOLLOWING SINGLE EFFECTIVE GROUND HAS BEEN RAISED: THE ORDER OF CIT(A) IS NOT ACCEPTABLE IN ALLOWING DEPRECIATION OF RS.82,79,904/- ALTHOUGH ADDITION TO COST OF FIXED ASSETS AMOUNTING TO RS.2,15,49,168/- WAS CONSIDERED AS APPLICATION OF INCOME. THE ASSESSEE HAS CLAIMED SUM OF RS.2,15,49,168/- ON ACCOUNT OF ADDITION TO FIXED AS SETS AS APPLICATION OF INCOME FOR CHARITABLE PURPOSE. SO, ALLOWING DEPRECIATION ON THE SAME ASSETS IN THE MATTER OF COMPUTATION OF INCOME WOULD RESULT IN ALLOWING D OUBLE DEDUCTION. 2. AT THE VERY OUTSET, LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE RAISED IN THIS APPEAL IS COVERED IN FAVOUR OF THE ASSESSEE BY HONBLE PUNJAB & HARYANA HIGH COURT AS WELL AS HONBLE DELHI HIGH COURT AND VARIOUS TRI BUNAL DECISIONS AND THE ORDER OF CIT(A) BEING IN CONFORMITY WITH THE SAID PRECEDENTS IS REQUIRED TO BE CONFIRMED. I.T.A. NO.445/DEL./2012 (A.Y. : 2008-09) 2 ASSESSEE HAS ALSO FILED COPY OF THE F BENCH, ITAT , NEW DELHI, DECISION AS WELL AS DELHI HIGH COURT DECISION IN THE CASE OF DIRECTOR O F INCOME TAX VS. VISHWA JAGRITI MISSION IN I.T.A. NO.140/2012 DATED 29.03.2012 TO P LEAD FOR CONFIRMATION OF THE IMPUGNED ORDER. 3. LD.DR HAS BEEN HEARD, WHO RELIED UPON ASSESSING OFFICERS ORDER TO PLEAD FOR SETTING ASIDE THE ORDER OF CIT(A) AND RESTORING THA T OF THE ASSESSING OFFICER. 4. WE HAVE HEARD BOTH THE SIDES AND CONSIDERED THE MATERIAL ON RECORD AND FIND THAT F BENCH OF ITAT, NEW DELHI IN THE CASE OF ITO VS. R.L. KHERA CHARITABLE TRUST IN I.T.A. NO.4427/DEL./2011 FOR ASSESSMENT YEAR 2007-0 8 DATED 09.12.2011, IN WHICH ONE OF US IS THE MEMBER, HAS CONSIDERED THIS ISSUE FRO M PARA. 2 ONWARDS TO DECIDE THE SAME IN FAVOUR OF THE ASSESSEE WHILE FOLLOWING HONBLE P UNJAB & HARYANA HIGH COURT DECISION AS UNDER: 2. FACTS INDICATE THAT IT HAS BEEN NOTICED AND OBS ERVED BY THE AO THAT ACTIVITY OF THE SOCIETY COMES UNDER THE PURVIEW OF PROVISI ON 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 SECTION 11 & 12 OF THE INCO ME TAX ACT. HOWEVER, DEPRECIATION HAS NOT BEEN ALLOWED TO THE ASSESSEE AND AO IN THE BODY OF THE ORDER, HAS MENTIONED THAT ALLOWING DEPRECIATION WI LL AMOUNT TO DOUBLE DEDUCTION. AGAINST WHICH THE ASSESSEE PREFERRED AN APPEAL AND FILED DETAILED WRITTEN SUBMISSIONS WHEREIN RELIANCE WAS PLACED ON, 198 IT R 598 (GUJ.), CIT VS SHETH MANILAL RANCHHODDAS VISHRAM BHAVAN TRUST, KARNATAKA HIGH COURT IN CIT VS. SOCIETY OF THE SISTERS OF ST. ANNE (1984) 146 ITR 28, CIT VS. RAO BAHADUR CALAVALA CUNNAN CHETTY CHARITIES (1982) 135 ITR 485 THE MADRAS HIGH COURT, CIT VS. INSTITUTE OF BANKING PERSONNEL SELECTI ON, TAXMAN 386 (BOM.), DIRECTOR OF INCOME TAX (EXEMPTION) VS. FRAMJEE CAWASJEE INSTITUTE, 109 CTR 463 (BOM.), CIT VS. M/S. TINY TOTS EDUCATION SOCI ETY IN ITA NO. 93 OF 2010, THE HONBLE PUNJAB & HARYANA HIGH COURT VIDE ITS ORDER DATED 28.7.2010 IN ORDER TO PLEAD THAT CLAIM OF THE ASSESSEE SHOU LD BE ALLOWED AND LD. CIT(A) WHILE CONSIDERING AND ACCEPTING THE APPEAL OF THE ASSESSEE WHILE MAINLY RELYING UPON PUNJAB & HARYANA HIGH COURT IN THE CA SE OF CIT VS. M/S. TINY TOTS EDUCATION SOCIETY HAS CONCLUDED TO ALLOW THE A PPEAL AS PER PARA 4.1 OF THE ORDER AS UNDER :- I.T.A. NO.445/DEL./2012 (A.Y. : 2008-09) 3 4.1 I HAVE GONE THROUGH THE FINDING OF THE AO IN THE ASSESSMENT ORDER AND WRITTEN SUBMISSION OF THE LD. AR. IN MY CONSIDERED OPINION, CASE LAWS RELIED UPON BY THE LD. AR ARE APPREC IATED, SPECIALLY, JUDGMENT OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF TINY TOTS EDUCATION SOCIETY, REPORTED AT 3 30-ITR-21 IS VERY MUCH RELEVANT IN THIS CASE, WHEREIN, IN PARA. 9 OF T HE ORDER THE HONBLE P & H HIGH COURT HAS DISTINGUISHED THE JUDGMENT OF HONB LE 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 B EEN SUGGESTED BY LEARNED COUNSEL FOR THE REVENUE. THE INCOM E OF THE ASSESSEE BEING EXEMPT, THE ASSESSEE IS ONLY C LAIMING THAT DEPRECIATION SHOULD BE REDUCED FROM THE INCOME FOR DETERMINING THE PERCENTAGE OF FUNDS WHICH HAVE TO BE APPLIE D FOR THE PURPOSES OF THE TRUST. THERE IS NO DOUBLE DEDUCT ION CLAIMED BY THE ASSESSEE AS CANVASSED BY THE REVENUE. JUDGMENT OF THE HONBLE SUPREME COURT IN ESCORTS LTD. AND ANO THER (SUPRA) IS DISTINGUISHABLE FOR THE ABOVE REASONS. IT CANN OT 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 TH E REVENUE AND IN FAVOUR OF THE ASSESSEE. 3. AGGRIEVED BY THIS ORDER OF LD. CIT(A), DEPARTME NT HAS COME UP IN APPEAL AND WHILE RELYING UPON THE GROUND RAISED IN THE MEMORANDUM OF APPEAL, IT WAS PLEADED FOR SETTING ASIDE THE ORDER OF LD. CIT( A ) AND RESTORING THAT OF THE AO BECAUSE IN CASE CLAIM OF THE ASSESSEE IS ALLOWE D THAT WOULD AMOUNT TO DOUBLE DEDUCTION. 4. LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE OR DER OF LD. CIT(A) AND PLEADED FOR ITS CONFIRMATION AS NOT ONLY ONE HIGH C OURT BUT VARIOUS HIGH COURTS HAVE ALSO TAKEN THE SIMILAR VIEW AND LD. CIT(A) HA S 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 MATERIAL ON RECORD AS WELL AS PRECEDENT RELIED UPON BEFORE FIRST APPELLA NT AUTHORITY AND REITERATED BEFORE US AND FIND THAT LD. CIT(A) HAS TAKEN A JUST AND APPROPRIATE VIEW TO DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. NO CONTRARY DECISION OF THE JURISDICTIONAL HIGH COURT OR HIGHER COURT HAS BEEN PLACED BEFOR E US. THEREFORE, WHILE CONCURRING WITH THE FINDING AND CONCLUSION AS DRAWN BY THE LD. CIT(A), WE UPHOLD THE ORDER AND DISMISS THE APPEAL OF THE REVE NUE. I.T.A. NO.445/DEL./2012 (A.Y. : 2008-09) 4 THIS ISSUE HAS ALSO BEEN CONSIDERED BY THE DELHI HI GH COURT IN THE CASE OF DIRECTOR OF INCOME TAX VS. VISHWA JAGRITI MISSION (SUPRA) AND A SIMILAR VIEW HAS BEEN TAKEN BY DELHI HIGH COURT ALSO. IN VIEW OF THE FACTS, CIRCU MSTANCES AND THE MATERIAL ON RECORD, WE FIND THAT SINCE THE ISSUE IS COVERED IN FAVOUR OF T HE ASSESSEE NOT ONLY BY PUNJAB & HARYANA HIGH COURT DECISION, BUT ALSO BY DELHI HIGH COURT DECISION AS WELL AS VARIOUS DECISION OF THE DELHI BENCHES INCLUDING ONE CITED B Y LD.COUSNEL FOR THE ASSESSEE, THEREFORE, FOLLOWING THE SAID DECISIONS, WE UPHOLD THE ORDER OF THE CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 4 AS A RESULT, THE APPEAL OF THE REVENUE GETS ACCE PTED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 14.12.2012. SD/- SD/- (SHAMIM YAHYA) ( U.B.S. BEDI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : DEC. 14, 2012. SKB COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT-XXI, NEW DELHI. 5. CIT(ITAT) DEPUTY REGISTRAR, ITAT I.T.A. NO.445/DEL./2012 (A.Y. : 2008-09) 5