ITO (E) - 2(3), MUMBAI V. SHRI LALJI VELJI CHARITABLE TRUST, MUMBAI

ITA 5301/MUM/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0009 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 26-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Keywords: Depreciation; Charitable institution; Tax effect
• Section: 143(3); 12A; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH , JUDICIAL MEMBER ITA NOS. 5300 & 5301/MUM/2016 : A.YS : 2010 - 11 & 2011 - 12 ITO (EXEMPTIONS) - 2(3), MUMBAI (APPELLANT) VS. SHRI LALJI VELJI CHARITABLE TRUST PENINSULA BUSINESS PARK, B - WING, 13 TH FLOOR, SENAPATI BAPAT MARG, PAREL (W), MUMBAI 400 022. PAN : AAATS0211P (RESPONDENT) APPELLANT BY : SHRI RAJESH KUMAR YADAV RESPONDENT BY : NONE DATE OF HEARING : 09/08/2017 DATE OF PRONOUNCEMENT : 30 /08/2017 O R D E R PER G.S. PANNU , AM : THE CAPTIONED TWO APPEALS HAVE BEEN PREFERRED BY THE REVENUE AGAINST THE SAME ASSESSEE PERTAINING TO ASSESSMENT YEARS 2010 - 11 & 2011 - 12. SINCE THE APPEALS RELATE TO THE SAME ASSESSEE AN D INVOLVE CERTAIN COMMON ISSUES, THEY HAVE BEEN CLUBBED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. 2 ITA NO S . 5300 & 5301 /MUM/2016 SHRI LALJI VELJI CHARITABLE TRUST 2. AT THE TIME OF HEARING, IT WAS NOTICED THAT NONE APPEARED ON BEHALF OF THE RESPONDENT - ASSESSEE INSPITE OF SERVICE OF NOTICE BY RPAD. ON THE OTHER HAND, THE LD. DR APPEARED ON BEHALF OF THE REVENUE. 3. ACCORDINGLY, IN VIEW OF RULE 25 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963, THE APPEALS OF THE REVENUE ARE BEING DISPOSED OFF EX - PARTE THE RESPONDENT - ASSESSEE AFTER HEARING THE APPELLANT - REVENUE ON MERITS. 4. APPEAL IN ITA NO. 5300/MUM/2016 PERTAINING TO ASSESSMENT YEAR 2010 - 11 IS BEING TAKEN AS THE LEAD CASE. THE SAID APPEAL IS DIRECTED AGAINST THE ORDER OF CIT(A) - 1 , MUMBAI DATED 24.6.2016 , WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER, MUMBAI DATED 6.1.2014 UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 5 . IN THIS APPEAL, REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPE AL: - 1. WHETHER ON THE FACTS OF THE CASE AND IN LAW THE LD.CIT(A) ERRED IN ALLOWING THE CARRY FORWARD OF DEFICIT OF RS.36,51,014/ - AND ALLOWING SET OFF AGAINST THE INCOME OF THE SUBSEQUENT YEARS. 2. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE FOR CARRY FORWARD OF THE SAID DEFICIT, IGNORING THE FACT THAT THERE WAS NO EXPRESS PROVISION IN THE IT ACT, 1961 PERMITTING ALLOWANCE OF SUCH CLAIM. 3 ITA NO S . 5300 & 5301 /MUM/2016 SHRI LALJI VELJI CHARITABLE TRUST 3. WHETHER, ON THE FACTS AND I N THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN ALLOWING THE CLAIM OF THE ASSESSEE FOR CARRY FORWARD OF THE SAID DEFICIT BY RELYING UPON THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION, I GNORING THE FACT THAT THE DEPARTMENT HAS NOT ACCEPTED THE SAID DECISION OF THE JURISDICTIONAL HIGH COURT ON MERIT OF THE CASE. 4. THE APPELLANT PRAYS THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX. - (APPEALS) - I, MUMBAI BE SET ASIDE AND THAT OF THE ASSESS ING OFFICER BE RESTORED. 6 . ALTHOUGH THE REVENUE HAS RAISED MULTIPLE GROUNDS OF APPEAL, BUT THE SOLITARY DISPUTE INVOLVED IN THIS APPEAL IS AGAINST THE ACTION OF THE CIT(A) IN ALLOWING THE ASSESSEE THE BENEFIT OF CARRY FORWARD OF THE DEFICIT FOR FUTURE S ET - OFF. 7 . IN THIS BACKGROUND, NOW WE MAY REFER TO THE RELEVANT FACTS. THE RESPONDENT - ASSESSEE IS A CHARITABLE ORGANISATION REGISTERED U/S 12A OF THE ACT AND IS ENGAGED IN CARRYING ON ACTIVITIES OF CHARITABLE NATURE. THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAD SHOWN RS.3 6,51,014 / - AS DEFICIT AND CLAIMED BENEFIT OF CARRY FORWARD FOR FUTURE SET - OFF. THE ASSESSING OFFICER DENIED THE BENEFIT BY OBSERVING THAT LOSS/DEFICIT CANNOT BE DETERMINED WHILE COMPUTING INCOME U/S 11 OF THE ACT. THE CIT(A) HAS SI NCE ALLOWED THE CLAIM OF THE ASSESSEE FOLLOWING THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION, 264 ITR 110 (BOM) . 8 . BEFORE US, THE PLEA OF THE DEPARTMENT IS THAT THE DECISION OF THE HON'BLE BOMBAY H IGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL 4 ITA NO S . 5300 & 5301 /MUM/2016 SHRI LALJI VELJI CHARITABLE TRUST SELECTION (SUPRA) HAS NOT BEEN ACCEPTED BY THE DEPARTMENT ON MERITS AND ON A SIMILAR ISSUE, SLP (CIVIL) NO. 9891 OF 2014 HAS BEEN FILED BEFORE THE HON'BLE SUPREME COURT IN THE CASE OF MAHARASHTRA INDU STRIAL DEVELOPMENT CORPORATION (MIDC) . SO, HOWEVER THERE IS NO CONTROVERSION BY THE REVENUE TO THE FACT THAT THE DECISION OF THE CIT(A) IS IN LINE WITH THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION ( SUPRA) . 9 . WE FIND THAT THE HON'BLE BOMBAY HIGH COURT SUBSEQUENT TO THE DECISION IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA) CONSIDERED A SIMILAR ARGUMENT OF THE REVENUE IN THE CASE OF M/S. MUMBAI EDUCATION TRUST, ITA NO. 11/2014 DATED 3.5.2016 AND ALLOWED THE CLAIM OF THE ASSESSEE. IN FACT, THE GROUNDS OF APPEAL URGED BY THE REVENUE BEFORE THE HON'BLE HIGH COURT, WHICH READ AS UNDER : - (A) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AND IN LAW, THE TRIBUNAL WAS JUSTIFIE D IN CONFIRMING THE ORDER OF THE CIT(A) TO ALLOW THE CLAIM OF DEPRECIATION RELYING ON THE DECISION OF THIS COURT IN THE CASE OF CIT V/S. INSTITUTE OF BANKING PERSONNEL SERVICES REPORTED IN 264 ITR 110 (BOM) IGNORING THE RATIO OF HON'BLE SUPREME COURT JUDGM ENT IN THE CASE OF ESCORTS LTD. V/S. UNION OF INDIA (199 ITR 43) WHEREIN HON'BLE SUPREME COURT HAS HELD THAT DOUBLE DEDUCTION CANNOT BE PRESUMED IF THE SAME IS NOT SPECIFICALLY PROVIDED BY LAW, IN ADDITION TO NORMAL DEDUCTION? (B) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AND IN LAW, THE TRIBUNAL WAS JUSTIFIED IN CONFIRMING THE ORDER OF THE CIT(A) TO ALLOW TO CARRY FORWARD OF DEFICIT OF EARLIER YEARS RELYING ON THE DECISION OF THIS COURT IN THE CASE OF CIT V/S. INSTITUTE OF BANKING PERSONNEL SERVICES REPORTED IN 264 ITR 110 (BOM) WHILE THE REVENUE DID NOT FILE SLP AGAINST THE CASE OF CIT V/S. INSTITUTE OF BANKING 5 ITA NO S . 5300 & 5301 /MUM/2016 SHRI LALJI VELJI CHARITABLE TRUST PERSONNEL SERVICES REPORTED IN 264 ITR110 (BOM) DUE TO LOW TAX EFFECT?. STAND ON THE SAME FOOTING AS ARE BEING CANVASSED BEFORE U S IN THE INSTANT CASE. THUS, THERE IS NO ERROR ON THE PART OF THE CIT(A) IN FOLLOWING THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA) AND ALLOWING THE STAND OF THE ASSESSEE. THE OTHER ARGUMENT TAKEN BY THE REVENUE THAT ITS SLP FILED BEFORE THE HON'BLE SUPREME COURT IS PENDING ON A SIMILAR ISSUE IS OF NO CONSEQUENCE INASMUCH AS THE BINDING JUDGMENTS OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION (SUPRA) AS WELL AS IN THE CASE OF M/S. MUMBAI EDUCATION TRUST (SUPRA) CONTINUE TO SUBSIST. THEREFORE, IN THIS BACKGROUND, WE FIND NO MERIT IN THE GROUND RAISED BY THE REVENUE AND THE SAME IS ACCORDINGLY DISMISSED. 10 . IN THE RESULT, APPEAL OF THE REVENUE FOR ASS ESSMENT YEAR 2010 - 11 IS DISMISSED. 11. AS THE FACTS AND CIRCUMSTANCES IN ITA NO. 5301/MUM/2016 PERTAINING TO ASSESSMENT YEAR 2011 - 12 IS PARI MATERIA TO THOSE CONSIDERED BY US IN ITA NO. 5300/MUM/2016 FOR ASSESSMENT YEAR 2010 - 11, THEREFORE, OUR DECISION THEREIN SHALL APPLY MUTATIS MUTANDIS IN THE SAID APPEAL ALSO. 6 ITA NO S . 5300 & 5301 /MUM/2016 SHRI LALJI VELJI CHARITABLE TRUST 12. RESULTANTLY, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 0 T H AUGUST, 2017 SD/ - SD/ - ( AMARJIT SINGH ) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER MUMBAI, DATE : 3 0 T H AUGUST , 201 7 *SSL* COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, A BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI