Add. C.I.T., Range-1, Aligarh V. N.L.Education Society, Aligarh

ITA 455/AGR/2010

• Counselvise Citation: 45520314 RSA 2010
• Duration Of Justice: 1 year(s) 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 30-05-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 07-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ATESHAN ANSARI
• Assessee Lawyers: SHRI
• Keywords: Depreciation; Rule of consistency; Valuation report; Capital expenditure
• Section: 143(3); 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 454 & 455/AGRA/2010 ASSTT. YEAR : 2007-08 & 2006-07 ADDL. C.I.T., RANGE-1, VS. N.L. EDUCATION SOCIET Y, ALIGARH. 5/148, ISHAPUR COLONY, BANNADEVI, ALIGARH. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ATESHAN ANSARI, JR. D.R. RESPONDENT BY : SHRI PANKAJ GARGH, ADVOCATE. DATE OF HEARING : 30.05.2012 DATE OF PRONOUNCEMENT OF ORDER : 08.06.2012 ORDER PER BHAVNESH SAINI, J.M.: BOTH THE APPEALS BY THE REVENUE ARE DIRECTED AGAIN ST DIFFERENT ORDERS OF LD. CIT(A), GHAZIABAD DATED 10.09.2010 FOR THE ASSESSME NT YEARS 2006-07 AND 2007-08. SINCE COMMON ISSUES ARE INVOLVED IN BOTH T HE APPEALS, BOTH WERE HEARD TOGETHER AND WE DISPOSE OF THE SAME THROUGH THIS CO NSOLIDATED ORDER. 2. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND CONSIDERED TH E MATERIAL ON RECORD. ITA NO. 454 & 455/AGRA/2010 2 ITA NO. 455/AGRA/2010 (2006-07) 3. THE DEPARTMENT PREFERRED THIS APPEAL ON THE FOLL OWING GROUNDS : 1. THE LD. CIT (APPEAL) ERRED IN LAW IN DELETING T HE ADDITION OF RS.41,01,614/- MADE TO THE TOTAL INCOME ON THE BASI S OF AMENDMENT CLAUSE-5 OF SUPPLEMENTARY LEASE DEED DATED 04.01.20 09 WHICH WAS NEVER FILED BY THE ASSESSEE BEFORE THE AO DURING TH E ASSESSMENT PROCEEDINGS, THUS, ADMITTING FRESH EVIDENCE WITHOUT RECORDING IN WRITING THE REASONS AND WITHOUT ALLOWING THE ASSESS ING OFFICER A REASONABLE OPPORTUNITY TO EXAMINE THE SAID EVIDENCE , IN GROSS VIOLATION OF RULE 46-A OF THE IT RULES, 1962. 2. THE LD. CIT(APPEALS) ERRED IN LAW AND ON FACTS IN ACCEPTING THE SUPPLEMENTARY LEASE DEED DATED 04.01.2009 AS SU CH WITHOUT EXAMINING ONE OF THE WITNESS NAMELY SH. MOHAN PAL S INGH WHOSE SIGNATURES APPENDED AS M.P. SINGH APPEAR TO BE DO UBTFUL, AS THE SAID WITNESS DID NOT SIGN ON THE ORIGINAL LEASE DEE D DATED 24.12.2004, WHICH PUTS A QUESTION MARK ON THE LEGALITY OF THE O RIGINAL LEASE DEED AND THE SUPPLEMENTARY LEASE DEED. 3. THE LD. CIT(APPEAL) ERRED IN LAW AND ON FACTS I N NOT APPRECIATING THE FACTS THAT THE ORIGINAL LEASE DEED /SUPPLEMENTARY LEASE DEED HAD NO STATUTORY FORCE AS FAR AS VIOLATI ON OF SECTION 13(3) OF THE IT ACT IS CONCERNED, SINCE THE SAID DEEDS WE RE IN REALITY A PART OF FAMILY ARRANGEMENT BETWEEN SH. ANIL SARASWAT, SE CRETARY AND HIS WIFE SMT. SUDHA SARASWAT, THE LESSOR. 4. THE LD. CIT (APPEALS) ERRONEOUSLY DELETED THE A DDITION GUIDED BY AN HYPOTHETICAL SITUATION THAT IF THE LEA SE IS NOT EXTENDED AFTER 30 YEARS, THE LESSOR WILL NOT DRIVE ANY BENEF IT AFTER AMENDMENT IN CLAUSE 5 OF ORIGINAL LEASE DEED. 4. THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILE D RETURN OF INCOME DECLARING TOTAL INCOME AT RS. NIL, CLAIMING EXEMPTION U/S. 11 (1) OF THE IT ACT. THE ASSESSEE IS REGISTERED SOCIETY UNDER THE SOCIETIES ACT AND I S ALSO REGISTERED U/S. 12AA OF THE ITA NO. 454 & 455/AGRA/2010 3 IT ACT. DURING THE RELEVANT ASSESSMENT YEAR, THE AS SESSEE WAS RUNNING TWO EDUCATIONAL INSTITUTIONS UNDER THE NAMES AND STYLE OF VIVEKA NAND COLLEGE OF EDUCATION WHICH IS IMPARTING THE EDUCATION FOR B. E D. AND VIVEKA NAND COLLEGE OF LAW AT ALIGARH FOR PROVIDING EDUCATION FROM NURSERY EDUCATION TO HIGHER EDUCATION. THE TRUST WAS RUNNING ON THE LAND OF 515 0.48 SQ. METER AT MATHURA BYE PASS ROAD, ALIGARH IN THE OWNERSHIP OF SMT. SUDHA S ARASWAT W/O SHRI ANIL SARASWAT. THE AO, THEREFORE, FOUND THAT THE LAND ON WHICH SCHOOL IS RUNNING DID NOT BELONG TO THE ASSESSEE. IT WAS STATED THAT THE LAND HAS BEEN LEASED OUT BY THE OWNER, SMT. SUDHA SARASWAT W/O SHRI ANIL SARSWAT (S ECRETARY OF THE ASSESSEE) TO THE SOCIETY. COPY OF THE LEASE DEED WAS FILED, WHIC H IS APPENDED WITH THE ASSESSMENT ORDER AND EXECUTED ON 24.12.2004. THE AO NOTED THAT AS PER VALUATION REPORT IN RESPECT OF THE CONSTRUCTION OF SCHOOL BUI LDING ON THE LEASED LAND, THE TOTAL EXPENDITURE UPTO 31.03.2006 ON THE BUILDING CONSTRU CTION WAS RS.95,68,578/- ONLY AND SINCE THE LAND DID NOT BELONG TO THE ASSESSEE-S OCIETY, THEREFORE, ACCORDING TO THE AO, BENEFIT WAS PASSED ON TO THE RELATIVE OF TH E SECRETARY OF SOCIETY U/S. 13(3) OF THE IT ACT. THEREFORE, SHOW CAUSE NOTICE WAS IS SUED AS TO WHY EXEMPTION BE NOT DENIED TO THE ASSESSEE. REPLY OF THE ASSESSEE I S INCORPORATED IN THE ASSESSMENT ORDER, IN WHICH THE ASSESSEE BRIEFLY EXPLAINED THAT THE LAND IS TAKEN ON LEASE FROM SMT. SUDHA SARASWAT AND NO BENEFIT HAS BEEN PROVIDE D TO HER. THE LAND WAS TAKEN ON LEASE FOR 30 YEARS WITH A RENEWAL OPTION TO THE ASSESSEE-SOCIETY AFTER EXPIRY OF ITA NO. 454 & 455/AGRA/2010 4 THE 30 YEARS AS PER CLAUSE -5 OF THE LEASE DEED. AN Y CONSTRUCTION ON LAND DONE BY THE SOCIETY WILL BE USED BY THE SOCIETY FOR ITS OWN SUBJECT ONLY AND AS SUCH, THERE IS NO PROBABILITY THAT ANY BENEFIT FROM CONSTRUCTIO N WILL ACCRUE TO SMT. SUDHA SARASWAT DURING THE PERIOD OF LEASE. THE AO, HOWEVE R, DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND NOTED THAT AS PER CL AUSE 5 OF THE LEASE DEED, IT IS SEEN THAT AFTER 30 YEARS, IF LEASE IS NOT EXTENDED THEN WHATEVER INVESTMENT IS MADE IN THE CONSTRUCTION OF BUILDING ON LEASED LAND WILL BECOME THE PROPERTY OF THE LESSOR, I.E., SMT. SUDHA SARASWAT WITHOUT ANY RIGHT OF COMPENSATI ON AVAILABLE TO THE LESSEE, I.E., THE ASSESSEE. IN THAT SITUATION, THE ASSESSEE WOULD BE IN ITS DISADVANTAGE POSITION. THEREFORE, ACCORDING TO THE AO, THERE IS VIOLATION OF SECTION 13 OF THE IT ACT AND AS SUCH, EXEMPTION U/S. 11 AND 12 OF THE IT ACT WAS DENIED TO THE ASSESSEE AND ADDITION WAS, ACCORDINGLY, MADE. 5. THE ASSESSEE REITERATED THE SAME SUBMISSIONS BEF ORE THE LD. CIT(A) AND SUBMITTED THAT THE ORDER OF THE AO IS PURELY BASED ON FUTURE EVENTS, WHICH OR MAY NOT OCCUR AFTER A PERIOD OF 30 YEARS. NO SUCH EVENT HAS OCCURRED IN THE ASSESSMENT YEAR UNDER CONSIDERATION. IT IS JUST DENIAL OF OWNE RSHIP OF CAPITAL EXPENDITURE IN THE HANDS OF THE ASSESSEE SOCIETY, WHICH IS UNJUSTIFIED AND ILLEGAL. IT WAS ALSO SUBMITTED THAT THE AO ALLOWED DEPRECIATION @ 10% ON THE INVES TMENT IN BUILDING, WHICH COULD BE LOWER IF THE ASSESSEE IS OWNER OF THE BUIL DING IN QUESTION. THEREFORE, AO ITA NO. 454 & 455/AGRA/2010 5 ADMITTED THE OWNERSHIP OF THE ASSESSEE OVER THE BUI LDING IN QUESTION. THEREFORE, THE ADDITION IS UNJUSTIFIED. IT WAS ALSO SUBMITTED THAT INCOME OF THE ASSESSEE HAS BEEN WRONGLY COMPUTED BY THE AO. FURTHER, IN ORDER TO AVOID FURTHER CONTROVERSY, SUPPLEMENTARY LEASE DEED WAS EXECUTED BETWEEN THE P ARTIES REVISING CLAUSE NO. 5 OF THE LEASE DEED AND IT WAS PROVIDED IN FAVOUR OF THE ASSESSEE-SOCIETY THAT IN CASE THE LEASE DEED IS NOT EXTENDED AFTER 30 YEARS, THEN THE LESSOR SHALL PAY TO THE ASSESSEE SOCIETY THE VALUE OF SUCH STRUCTURE AND SU PERSTRUCTURE, AS THE VALUE MAY BE DETERMINED BY THE REGISTERED VALUER. SAID LEASE DE ED WAS EXECUTED ON 04.01.2009. IT WAS, THEREFORE, SUBMITTED THAT THE I NVESTMENT IN THE BUILDING ON LEASED LAND SHOULD BE TREATED AS CAPITAL EXPENDITUR E AND AN APPLICATION OF INCOME FOR THE PURPOSE OF ASSESSEE SOCIETY. THEREFORE, THE ADDITION IS UNJUSTIFIED. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE IS DULY AFFILIA TED WITH AGRA UNIVERSITY AND NOC HAS BEEN TAKEN. THE LD. CIT(A) CONSIDERING THE SUBM ISSIONS OF THE ASSESSEE AND MATERIAL ON RECORD, FOUND THAT THE AOS VIEW IS GUI DED BY THE HYPOTHECATED SITUATION ABOUT THE FUTURE WHICH IS 30 YEARS FROM N OW AND NOTHING IS BROUGHT ON RECORD HOW THE BENEFIT IS ACCRUED TO THE DIRECTOR AT PRESENT. IT WAS ALSO NOTED THAT EVEN AFTER 30 YEARS LEASE IS NOT EXTENDED, THE BUIL DING AND CONSTRUCTION WILL BE REMOVED AND NO BENEFIT ACCRUE. FURTHER, THE LEASE D EED IS AMENDED TO AVOID CONTROVERSY. THEREFORE, THE ORDER OF THE AO WAS SET ASIDE AND THE APPEAL WAS ITA NO. 454 & 455/AGRA/2010 6 ALLOWED AND IT WAS DIRECTED THAT THE INCOME OF THE ASSESSEE BE ASSESSED ON RETURNED INCOME. 6. THE REVENUE HAS PREFERRED THE APPEAL ON THE GROU NDS MENTIONED ABOVE. THE LD. DR RELIED UPON THE ORDER OF THE AO AND THE GROU NDS OF APPEALS AND SUBMITTED THAT NO OPPORTUNITY WAS GIVEN TO THE AO UNDER RULE 46A TO EXAMINE THE SUPPLEMENTARY LEASE DEED AND FURTHER SIGNATURE OF T HE WITNESS WERE NOT EXAMINED. IT WAS AN ARRANGEMENT BETWEEN THE FAMILY MEMBERS. T HEREFORE, THE AO RIGHTLY DENIED EXEMPTION U/S. 11 AND 12 OF THE IT ACT. 7. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THA T THE ASSESSMENT ORDER HAS BEEN PASSED BY DR. BALVAN CHAUHAN, ADDL. COMMISSION ER RANGE-I, ALIGARH WHO HAS SUBSEQUENTLY PASSED THE ASSESSMENT ORDER OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-09 U/S. 143(3) ON DATED 27.12.2010 AND AC CEPTED THE CLAIM OF THE ASSESSEE FOR EXEMPTION UNDER THE ABOVE PROVISIONS. SINCE THE SAME AO ACCEPTED THE CLAIM OF ASSESSEE LATER ON, THEREFORE, THE DEPA RTMENT SHOULD FOLLOW THE CONSISTENCY IN APPROACH AND THE DEPARTMENTAL APPEAL MAY BE DISMISSED. ITA NO. 454 & 455/AGRA/2010 7 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD AND DID NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE OR DER OF THE LD. CIT(A) IN ALLOWING THE APPEAL OF THE ASSESSEE. THE WHOLE CASE REVOLVES UPON THE LEASE DEED DATED 24.12.2004 EXECUTED BETWEEN THE LESSOR, SMT. SUDHA SARASWAT AND THE ASSESSEE- SOCIETY THROUGH WHICH THE LAND MEASURING 5150.48 SQ . METER WAS LET OUT TO ASSESSEE SOCIETY FOR 30 YEARS. COPY OF THE LEASE DEED IS APP ENDED WITH THE ASSESSMENT ORDER. THE ASSESSEE PAID RS.10,000/- AS PREMIUM AND AGREED TO PAY RS.150/- PER MONTH AS RENT OF THE DEMISED PROPERTY, I.E., 1800/- PER ANNU M. THE ASSESSEE WAS ENTITLED TO RAISE ANY CONSTRUCTION FROM OWN FUNDS AND TO USE TH E LAND AND BUILDING OVER THE LEASED PROPERTY. ALL EXPENSES WERE TO BORNE BY THE ASSESSEE AND AS PER CLAUSE 5 OF THE DEED, IN CASE THE LESSEE/ASSESSEE WANTED THE EX TENSION OF LEASE AFTER 30 YEARS ON EXPIRY OF LEASE DEED, THE EXTENSION OF THE LEASE SH ALL BE AT THE OPTION OF THE LESSEE AND THE LESSOR/OWNER SHALL BE BOUND BY SUCH REQUISI TION AND THE LESSOR SHALL HAVE TO EXTEND THE PERIOD OF TENANCY WITH OPTION TO ENHANCE RENT BY 10%. FURTHER, IN CASE, SUCH OPTION IS NOT EXERCISED BY THE LESSEE/ASSESSEE -SOCIETY AFTER COMPLETION OF THE TERM OF THE LEASE, ALL CONSTRUCTION, STRUCTURE, SUP ERSTRUCTURE, FIXTURES ETC. OVER THE LEASED LAND SHALL BE REMOVED BY THE ASSESSEE/LESSEE IMMEDIATELY OR OTHERWISE THE SAME WOULD REVERT TO THE LESSOR WHO WILL NOT LIABLE FOR ANY COMPENSATION. THE WHOLE DISPUTE IS ON THIS CLAUSE AND ACCORDING TO TH E AO, DUE TO THE ABOVE CLAUSE, THE BENEFIT HAS BEEN CONFERRED UPON THE LAND LADY, WHO IS RELATIVE / WIFE OF THE ITA NO. 454 & 455/AGRA/2010 8 SECRETARY OF THE SOCIETY IN TERMS OF SECTION 13(3) OF THE IT ACT. SUCH AN ASSUMPTION OF THE AO IS WHOLLY UNWARRANTED UNDER TH E LAW. CLAUSE 5 OF THE LEASE DEED IS NOT, IN ABSOLUTE TERMS, TO PUT THE ASSESSEE TO DISADVANTAGEOUS SITUATION. RIGHT IS GIVEN TO THE ASSESSEE SOCIETY TO GET THE E XTENSION OF THE LEASE DEED AND IN THAT EVENT, LESSOR /OWNER IS BOUND TO EXTEND THE PE RIOD OF TENANCY BY ENHANCING THE RENT AT 10%. FURTHER OPTION IS GIVEN TO THE ASSESSE E THAT IN CASE ASSESSEE SOCIETY DOES NOT WANT EXTENSION OF THE LEASE, THE ASSESSEE WOULD BE AT LIBERTY TO REMOVE ALL CONSTRUCTION OR STRUCTURE, SUPERSTRUCTURE AND IN CA SE THE SAME IS NOT REMOVED BY THE ASSESSEE SOCIETY, IT WILL GO BACK TO THE OWNER OF T HE PROPERTY. IT IS WELL SETTLED LAW THAT IN CASE OF TERMINATION OF TENANCY, THE OWNER I S ENTITLED TO GET BACK THE POSSESSION OF THE DEMISED PROPERTY AND IN CASE THE TENANT HAS NOT REMOVED THE ARTICLES FROM THE PROPERTY, THE LAND LORD / OWNER W ITH ALL RIGHTS VESTED IN HIM, CAN REMOVE ALL ARTICLES AND THINGS FROM THE TENANTED PR OPERTY IN ORDER TO GET BACK THE POSSESSION OF THE TENANTED PROPERTY AS WAS LET OUT. EVEN IF IT IS PROVIDED IN THE LEASE DEED THAT THE SUPERSTRUCTURE WOULD REVERT TO THE LESSOR IS OF NO CONSEQUENCE BECAUSE THE PROPERTY IN QUESTION BELONGS TO THE ASS ESSEE SOCIETY ONLY AND IN NO EVENT, THE LESSOR/OWNER CAN TAKE FORCIBLE POSSESSIO N OF THE BUILDING OR SUPERSTRUCTURE. AT THE MOST IN THE EVENT OF TERMINA TION OF TENANCY, THE LANDLORD/OWNER COULD REMOVE THE SUPERSTRUCTURE FROM THE DEMISED LAND IN ORDER TO GET BACK THE POSSESSION OF THE TENANTED LAND IN QUE STION. FURTHER, IF THE ASSESSEE ITA NO. 454 & 455/AGRA/2010 9 WOULD HAVE EXERCISED OPTION FOR RENEWAL OF THE TENA NCY PERIOD, THE AO HAS TO ANSWER AS TO WHAT WOULD HAPPEN TO HIS ASSESSMENT OR DER DENYING EXEMPTION TO THE ASSESSEE U/S. 11 & 12 OF THE IT ACT. WHETHER IN SUC H EVENT, THE ORDER OF THE AO WOULD STAND AS ON TODAY BECAUSE THE OPTION CAN BE E XERCISED IN THE YEAR 2034, WHICH NOBODY KNOWS AS TO WHAT WOULD HAPPEN IN FUTUR E. NO EVENT HAS HAPPENED IN THE ASSESSMENT YEAR UNDER APPEAL. IT IS ONLY A HYPO THETICAL AND BALD ASSERTION OF THE AO IN DENYING THE BENEFIT OF SECTION 11 TO THE ASSE SSEE. ACCORDING TO SECTION 13 OF THE IT ACT, SUCH INCOME OR PROPERTY SHALL BE USED O R APPLIED FOR THE BENEFIT OF SUCH PERSON AS REFERRED IN SUB-SECTION (3) OF SECTION 13 DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL FOR DENYING BEN EFIT OF SECTION 11 & 12 OF THE ACT. HOWEVER, IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL, NOTHING HAS HAPPENED TO PROVIDE ANY BENEFIT TO ANY SUCH PROHIBITED PERSON OUT OF THE INCOME OR PROPERTY OF THE ASSESSEE SOCIETY. AT PRESENT, THE ASSESSEE IS IN ADVANTAGEOUS POSITION THROUGH LEASE DEED OF MEAGER RENT OF RS.150/- PER MONTH FOR 30 YEARS. THE ASSESSEE AS PER LEASE DEED IS ENTITLE D FOR RAISING ANY CONSTRUCTION, USING THE CONSTRUCTED BUILDING FOR ITS OWN PURPOSES AND AS PER OTHER CLAUSES, THE ASSESSEE COULD HAVE GET THE RENEWAL OF THE LEASE DE ED. THEREFORE, EVEN AS PER ORIGINAL CLAUSE 5 OF THE LEASE DEED, NO BENEFIT IS PROVIDED TO THE RELATIVE OF THE SECRETARY OF THE SOCIETY. THEREFORE, EVEN IF CLAUSE 5 OF THE LEASE DEED IS RE-DRAFTED TO AVOID THE ABOVE MISCHIEF, NO CASE IS MADE OUT BY THE AO TO MAKE ADDITION. THE ITA NO. 454 & 455/AGRA/2010 10 WITNESSES TO THE DEED WOULD APPEND THEIR SIGNATURE FOR EXPLAINING THE CONTENTS OF THE DOCUMENTS BETWEEN THE PARTIES IF THERE IS ANY D ISPUTE, BUT NO SUCH DISPUTE ARISE BETWEEN THE PARTIES ON THE LEASE DEED OR SUPPLEMENT ARY DEED. THEREFORE, THERE IS NO QUESTION OF EXAMINATION OR RE-EXAMINATION OF ANY WI TNESS TO THE SUPPLEMENTARY DEED. THE RIGHT TO REMOVE THE SUPERSTRUCTURE IS WIT H THE ASSESSEE AND THAT EVENT DID NOT TAKE PLACE IN THE ASSESSMENT YEAR UNDER APPEAL. THEREFORE, THE ASSUMPTION OF THE AO IS ILLEGAL. AT PRESENT, THE MEAGER RENT OF T HE TENANTED PROPERTY DOES BENEFIT TO THE ASSESSEE-SOCIETY AND AS SUCH, NO BENEFIT IS EXTENDED TO ANY RELATIVE OF THE SECRETARY OF THE SOCIETY U/S. 13(3) OF THE IT ACT. THE ASSESSEE ALSO RIGHTLY CONTENDED BEFORE THE LD. CIT(A) THAT THE AO HAS ALL OWED DEPRECIATION AT THE RATE OF 10% ON THE BUILDING AND SUPERSTRUCTURE WHILE COMPUT ING THE INCOME OF THE ASSESSEE, WOULD PROVE THAT THE DEPRECIATION HAS BEE N GRANTED TO THE ASSESSEE BEING THE OWNER OF THE SUPERSTRUCTURE AND AS SUCH, THE AO ADMITTED OWNERSHIP OF THE ASSESSEE OVER THE BUILDING IN QUESTION AND AS SUCH, THE AO PASSED CONTRADICTORY ORDER IN THIS CASE. FURTHER, THE RE-DRAFTING OF CLA USE 5 OF THE LEASE DEED HAS MERELY EXPLAINED THAT IN THE EVENT OF EXPIRY OF THE LEASE TERM, THE SUPERSTRUCTURE WILL BE REMOVED BY THE ASSESSEE IMMEDIATELY, WHICH IS ALREA DY PROVIDED IN THE ORIGINAL CLAUSE NO. 5. IT WAS EXPLAINED IN THE SUPPLEMENTARY DEED THAT IN CASE IT IS NOT POSSIBLE TO REMOVE THE EXISTING STRUCTURE THEN THE LESSOR SHALL PAY TO THE SOCIETY THE VALUE OF SUPERSTRUCTURE AS WOULD BE VALUED BY THE R EGISTERED VALUER. THEREFORE, ITA NO. 454 & 455/AGRA/2010 11 EXPLAINING CLAUSE NO. 5 THROUGH SUPPLEMENTARY DEED WOULD NOT BE INADMISSIBLE IN NATURE AND AS SUCH, WOULD NOT VIOLATE RULE 46A OF T HE IT RULES. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT THE AO IN THIS CASE IS DR. BALVAN CHAUHAN, ADDL. CIT RANGE-I, ALIGARH, WHO DENIED EXEMPTION, B UT THE SAME AO ACCEPTED SIMILAR CLAIM OF THE ASSESSEE IN SUBSEQUENT ASSESSM ENT YEAR 2008-09 IN THE ORDER PASSED U/S. 143(3) OF THE IT ACT DATED 27.12.10 (PB -51). IT IS WELL SETTLED LAW THAT THOUGH THE PRINCIPLE OF RES JUDICATA DOES NOT APPLY TO THE INCOME-TAX PROCEEDINGS, BUT THE INCOME-TAX AUTHORITIES ARE BOUND TO FOLLOW THE RULE OF CONSISTENCY WHILE DECIDING SIMILAR MATTERS. WE ARE FORTIFIED IN OUR V IEW BY THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF RADHASWAMY SATSANG VS. CIT, 193 ITR321 AND THE DECISION OF M.P. HIGH COURT IN THE CASE OF CIT VS. GODAVARI CORPORATION LTD., 156 ITR 835, DECISION OF HONBLE DELHI HIGH COURT IN TH E CASE OF CIT VS. ESCORTS LTD., 338 ITR 435 AND THE DECISION OF HONBLE PUNJAB & HA RYANA HIGH COURT IN THE CASE OF CIT VS. VIKAS CHEMI GUM INDIA, 276 ITR 32. SINCE THE AO HIMSELF ACCEPTED THE CASE OF THE ASSESSEE IN THE SUBSEQUENT YEAR, TH EREFORE, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LD . CIT(A) IN ALLOWING EXEMPTION TO THE ASSESSEE U/S. 11 OF THE IT ACT. CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY JUSTI FICATION TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). THE DEPARTMENTAL APPEAL HA S NO MERIT AND IS DISMISSED. ITA NO. 454 & 455/AGRA/2010 12 ITA NO. 454/AGRA/2010 (2007-08) 9. IN THIS APPEAL THE DEPARTMENT RAISED MORE OR LES S SIMILAR GROUNDS OF APPEAL. THE AO FOLLOWING THE ORDER OF ASSESSMENT YEAR 2006- 07, DENIED EXEMPTION TO THE ASSESSEE U/S. 11 & 12 OF THE IT ACT. THE LD. CIT(A) FOLLOWING HIS ORDER FOR THE ASSESSMENT YEAR 2006-07, DELETED THE ADDITION AND A LLOWED THE APPEAL OF THE ASSESSEE. BY FOLLOWING THE REASONS FOR DECISION IN ITA NO. 455/AGRA/2010, WE DISMISS THIS DEPARTMENTAL APPEAL AS WELL. 10. IN THE RESULT, BOTH THE APPEALS OF REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY