ACIT, Bulandshahr V. Krishi Utpadan Mandi Samiti, Bulandshahr

ITA 4508/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58529 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 23-01-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 11-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Keywords: Depreciation; Charitable institution
• Section: 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `D : NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.4508/DEL./2010 (ASSESSMENT YEAR : 2005-06) ACIT, VS. KRISHI UTPADAN MANDI SAMITI CIRCLE BULANDSHAHR, DEBAI, DISTT. BULANDSHAHR (PAN/GIR NO.AAALK0383Q) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SANJAY KUMAR, CA. REVENUE BY : MS. Y. KAKKAR, DR ORDER PER U.B.S. BEDI, J.M. THIS APPEAL OF THE DEPARTMENT IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)- MEERUT, DATED 30.7.2010, RELEVANT TO ASSESSMENT YEA R 2005-06 WHEREIN FOLLOWING SOLITARY EFFECTIVE GROUND HAS BEEN TAKEN: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE CIT(A) HAS ERRED IN LAW IN HOLDING THAT THE DEPRECIATION AMOUN TING TO RS.24,49,212/- WAS ALLOWABLE TO THE ASSESSEE (MANDI SAMITI) AS APPLICA TION OF INCOME DURING THE YEAR AS PER THE PROVISIONS OF SECTIONS 11 TO 13 OF THE I .T. ACT, 1961? 2. AT THE VERY OUTSET, LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY DECISION OF HO NBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. MARKET COMMITTEE, PIPLI AS R EPORTED IN (2011) 330 I.T.R.16 (P&H) AND THIS DECISION HAS FURTHER BEEN FOLLOWED IN THE CASE OF CIT VS. TINY TORTS EDUCATION SOCIETY, 330 ITR 21(P&H) ON THE SIMILAR ISSUE. TH EREFORE, APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED WHICH MAY BE DISMISSED. I.T.A. NO.4508/DEL./2010 (A.Y. : 2005-06) 2 3. LD.DR COULD NOT CONTROVERT THIS FACTUAL ASPECT T HAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE, BUT SHE RELIED UPON THE ORD ER OF THE ASSESSING OFFICER TO PLEAD FOR REVERSAL OF THE IMPUGNED ORDER. 4. WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MAT ERIAL ON RECORD AS WELL AS PRECEDENT RELIED UPON BY THE LD.COUNSEL FOR THE ASS ESSEE AND FIND THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY DECIS ION OF HONBLE PUNJAB & HARYANA HIGH COURT, CITED SUPRA. THE HEAD NOTES AND HELD PORTION AS CONTAINED IN FIRST PAGE OF THE REPORTED JUDGMENT IS AS UNDER: CHARITABLE PURPOSE APPLICATION OF INCOME TO CHAR ITABLE OBJECTS DEPRECIATION CLAIM TO DEPRECIATON FOR DETERMINING PERCENTAGE OF FUNDS TO BE APPLIED FOR PURPOSES OF TRUST ALLOWABLE NOT A CASE OF DOUBA LE BENEFIT INCOME-TAX ACT, 1961, S.11 THE ASSESSEE WAS REGISTERED UNDER SECTION 12AA OF T HE I.T. ACT, 1961 AS A CHARITABLE TRUST. THE ASSESSING OFFICER DISALLOWED THE DEPRECIATION ON THE GROUND THAT SINCE THE INCOME OF THE ASSESSEE WAS EXEMPT FR OM TAX UNDER SECTIONS 11 TO 13, ALLOWING DEPRECIATION TO ASCERTAIN WHETHER 85 P ER CENT OF FUNDS WERE APPLIED FOR PURPOSES OF TRUST, WOULD AMOUNT TO CONFERRING D OUBLE BENEFIT. THIS VIEW WAS AFFIRMED BY THE COMMISSIONER (APPEALS). THE APPEAL OF THE ASSESSEE TO THE TRIBUNAL WAS ALLOWED ON A STATEMENT THAT THE MATTER WAS COVERED IN FAVOUR OF THE ASSESSEE BY ANOTHER ORDER OF THE TRIBUNAL. ON APPE AL: HELD, DISMISSING THE APPEAL, THAT THE INCOME OF THE ASSESSEE BEING EXEMPT THE ASSESSEE WAS ONLY CLAIMING THAT DEPRECIATION SH OULD BE REDUCED FROM THE I.T.A. NO.4508/DEL./2010 (A.Y. : 2005-06) 3 INCOME FOR DETERMINING THE PERCENTAGE OF FUNDS WHIC H HAD TO BE APPLIED FOR THE PURPOSES OF THE TRUST. THERE WAS NO DOUBLE DEDUCTI ON CLAIMED BY THE ASSESSEE. IT COULD NOT BE HELD THAT DOUBLE BENEFIT WAS GIVEN IN ALLOWING THE CLAIM FOR DEPRECIATION FOR COMPUTING INCOME FOR PURPOSES OF S ECTION 11. CIT VS. RAIPUR PALLOTTINE SOCIETY (1989) 180 I.T.R. . 579 (MP), CIT VS. RAO BAHADUR CALAVALA CUNNAN CHETTY CHARITIES ( 1982) 135 I.T.R. 485 (MAD), CIT VS. SETH MANILAL RANCHHOD DAS VISHRAM BHAWAN TRUST (1992) 198 I.T.R. 598 (GUJ.), CIT VS. SOCIETY OF THE SISTERS OF ST. ANNE (1984) 146 I.T.R. 28 (KA RN) AND CIT VS. INSTITUTE OF BANKING (2003) 264 I.T.R. 110 (BOM) RE LIED ON. 5. SINCE THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. THEREFORE, FOLLOWING THE SAID PRECEDENT, WE CONFIRM THE ORDER OF THE CIT(A) AND DISMISS THE APPEAL OF THE DEPARTMENT. 6. AS A RESULT, THE APPEAL OF THE REVENUE GETS DIS MISSED. ORDER PRONOUNCED IN OPEN COURT SOON AFTER THE CONC LUSION OF THE HEARING ITSELF ON 25.01.2012. SD/- SD/- (B.C. MEENA) ACCOUNTANT MEMBER (U.B.S. BEDI ) JUDICIAL MEMBER DATED : JANUARY 25, 2012 SKB COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A), MEERUT 5. CIT(ITAT) DEPUTY REGISTRAR, ITAT I.T.A. NO.4508/DEL./2010 (A.Y. : 2005-06) 4