ACIT, UDAIPUR V. M/s. Advent Age Education Foundation, UDAIPUR

ITA 449/JODH/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5271 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 28-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L MOURYA
• Keywords: Capital asset; Depreciation; Charitable institution; Capital expenditure
• Section: 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO S . 4 4 8 & 449 / JODH /201 4 (ASST. YEAR S : 200 9 - 1 0 & 2010 - 11 ) AC IT, CIRCLE - 2 , UDAIPUR . VS. M/S. AD V ENT AGE EDUCATION FOUNDATION, 1 - C, MADHUBAN, UDAIPUR. PAN NO. AAATA 9989 Q (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE . DEPARTMENT BY : SHRI S.L. MOURYA - DR DATE OF HEARING : 08 / 0 3 /201 6 . DATE OF PRONOUNCEMENT : 08 / 03 /201 6 . O R D E R PER N.S. SAINI , ACCOUNTANT MEMBER TH E S E ARE THE APPEAL S FILED BY THE REVENUE AGAINST THE ORDER S OF THE COMMISSIONER OF INCOME TAX (APPEALS) , UDAIPUR FOR THE ASSESSMENT YEAR 2009 - 10 & 2010 - 11 , BOTH DATED 11 /0 6 /201 4 . 2. THE COMMON GROUND OF APPEAL BY THE REVENUE IN THESE APPEALS IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE DISALLOWANCE OF CLAIM OF DEPRECIATION OF RS. 89,19,876/ - IN THE ASSESSMENT YEAR 20 0 9 - 10 AND RS. 77,82,348/ - IN THE ASSESSMENT YEAR 2010 - 11 WITHOUT APPRECIATING THE FACTS THAT THE HON'BLE SUPREME COURT IN THE CASE OF ESCORTS VS. UNION OF INDIA (199 ITR 43) HAS HELD THAT CLAIM OF DEPRECIATION IS NOT ADMISSIBLE IN THE ASSESSEES CASE ON THE ASSETS, SINCE 100% DEDUCTION HAS ALREADY BEEN TAKEN IN THE CASE OF ASSESSEE TRUST AS THE ASSETS HAVE BEEN ACQUIRED BY WAY OF APPLICATION 2 ITA NO S . 448 & 449 / JODH /201 4 OF FUND AND THE ALLOWANCE OF DEPRECIATION WILL TA NTAMOUNT TO ALLOWANCE OF DOUBLE DEDUCTION TO THE ASSESSEE. 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER ON PERUSAL OF THE RETURN OF INCOME FOUND THAT THE ASSESSEE HAS CLAIMED DEPRECIATION OF RS. 89,19,876/ - IN THE ASSESSMENT YEAR 2009 - 10 AND RS. 77,82,348/ - IN THE ASSESSMENT YEAR 2010 - 11 IN THE INCOME & EXPENDITURE ACCOUNT DURING THE YEAR UNDER CONSIDERATION ON CAPITAL ASSETS , COST OF WHICH HAS BEEN ALLOWED BY WAY OF APPLICATION OF INCOME ON ACCOUNT OF INCURRING THE CAPITAL EXPENDITURE TOWARDS FURTHERANCE OF THE OBJECTS OF THE INSTITUTION WHICH AMOUNTS TO A DOUBLE DEDUCTION. HE, THEREFORE, DISALLOWED THE CLAIM OF DEPRECIATION TO THE ASSESSEE. 4 . ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT THE FACTS OF THE CASE OF THE ASSESSEE ARE COVERED BY THE DECISION OF THE JODHPUR BENCH OF THE TRI B UNAL IN ITA NO S. 218 & 219/JU/2012 IN THE CASE OF M/S. VIJAYA SHANTI EDUCATIONAL TRUST VIDE ORDER DATED 29/11/2012. HE, THEREFORE, VACATED THE DISALLOWANCE OF DEPRECIATION MADE BY THE ASSESSING OFFICER. 5. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE ASSESSING OFFICER , WHEREAS AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). 6. WE HAVE HEARD THE SUBMISSIONS OF DEPARTMENTAL REPRESENTATIVE AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. M/S. TINY TOTS EDUCATION SOCIETY IN ITA NO. 93/20 01 HELD THAT THE JUDGMENT OF THE HON'BLE SUPREME COURT IN ESCORTS LTD. (SUPRA) WAS NOT APPLICABLE TO THE SITUATION WHERE DEPRECIATION WAS CLAIMED BY A CHARITABLE INSTITUTION IN DETERMINING PERCENTAGE OF FUNDS APPLIED FOR T HE PURPOSES OF CHARITABLE OBJECTS. WHILE DISMISSING THE APPEAL OF THE REVENUE IN THE ABOVE CASE , THE 3 ITA NO S . 448 & 449 / JODH /201 4 HON'BLE HIGH COURT STATED THAT 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 . THE JUDGMENT OF HON'BLE SUPREME COURT IN ESCORTS LTD. (SUPRA) IS DISTINGUISHABLE FOR THE ABOVE REASON S. IT CANNOT BE HELD THAT DOUBLE BENEFIT IS GIVEN IN ALLOWING CLAIM FOR DEPRECIATION FOR COMPUTING INCOME FOR PURPOSES OF SEC.11. TO THE SAME EFFECT IS THE DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. MARKET COMMITTEE , PIPLI (2011) 238 CTR 103 (P & H) . TO THE SAME EFFECT IS THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SETH MANI LAL RANCHOODDAS VISHRAM BHAVAN TRUST 105 CTR 303 . TO THE SAME EFFECT IS THE DECISION OF THE HON'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF CIT VS. NIZAMS SUPPL. RELIGIOUS ENDOWMENT TRUST ( 1981) 127 ITR 378 AND THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. RAO BAHADUR CALAVALA CUNNAN CHETTY CHARITIES (1982) 135 ITR 485 . HENCE, WE DO NOT ANY INFIRMING IN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) WHICH IS CONFIRMED AND THE APPEALS OF THE REVENUE ARE DISMISSED. 7. IN THE RESULT, APPEAL S OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON TUESDAY , THE 08 TH DAY OF MARCH , 201 6 AT JODHPUR . S D / - S D / - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER D ATED : 08 TH MARCH , 201 6 . 4 ITA NO S . 448 & 449 / JODH /201 4 VR/ - COPY TO: 1. THE ASSESS E E. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R . 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY I.T.A.T., JODHPUR .