DCIT (E) 2(1), MUMBAI V. THE GEM & JEWELLERY EXPORT PROMOTION COUNCIL, MUMBAI

ITA 5756/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2551 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2016
• Appeal Filed By: Department
• Bench Allotted: J
• Assessment Year: 2010-2011
• Appeal Filed On: 22-12-2015
• Court: TRIBUNAL
• Keywords: Depreciation; Charitable institution; Capital expenditure
• Section: 32; 11

Judgement Text

J IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI KARUNAKARA RAO, AM AND SHRI SANJAY GARG, JM ./I.T.A. NO.5756/M/2015 ( / ASSESSMENT YEAR: 2010 - 2011) ./I.T.A. NO.5757/M/2015 ( / ASSESSMENT YEAR: 2009 - 2010) DCIT (E) - 2(1), MUMBAI. / VS. THE GEM & JEWELLERY EXPORT PROMOTION COUNCIL, TOWER - A, AW 1010, G BLOCK, BHARAT DIAMOND BOURSE, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI 400 051. ./ PAN : AAATT3202H ( / APPELLANT) .. ( / RESPONDENT ) APPELLANT BY: SHRI C.W. ANGOLKAR, SR. AR NONE ./I.T.A. NO.4696/M/2015 ( / ASSESSMENT YEAR: 2008 - 2009) ITO (E) - 2(3), R.NO.513, PIRAMAL CHAMBERS, LALBAUG PAREL, MUMBAI 400 012. / VS. SHUSHRUSHA CITIZENS COOP. HOSPITALS LTD., 698, RANADE ROAD, DADAR, MUMBAI 400 028. PAN:AAATS0257K ( / APPELLANT) .. ( / RESPONDENT ) APPELLANT BY:SHRI K. RAVI KIRAN, SR. AR RESPONDENT BY: SHRI MIHIR A. TANNA ./I.T.A. NO.5744/M/2015 ( / ASSESSMENT YEAR: 2010 - 2011) ITO (E) - 2(3), R.NO.513, PIRAMAL CHAMBERS, LALBAUG PAREL, MUMBAI 400 012. / VS. SAMEEKSHA TRUST, 320 - 321, A - Z INDUSTRIAL PREMISES COOP SOCIETY, GANPATRAO KADAM MARG, LOWER PAREL, MUMBAI - 013. PAN:AAATS0581L ( / APPELLANT) .. ( / RESPONDENT ) APPELLANT BY:SHRI K. RAVI KIRAN, SR. AR SHRI DHAVI SANGHVI ./I.T.A. NO.4988/M/2015 ( / ASSESSMENT YEAR: 2010 - 2011) DCIT (E) - 2(1), 510, 5 TH FLOOR, PIRAMAL CHAMBERS, LALBAUG, MUMBAI 400 012. / VS. SAMUNDRA INSTITUE OF MARITIME STUDIES TRUST, 507, 5 TH FLOOR, SAI COMMERCIAL COMPLEX, BKS DEVASHI MARG, GOVANDI, MUMBAI 400 088. PAN:AAACTS9557L ( / APPELLANT) .. ( / RESPONDENT ) SHRI K. RAVI KIRAN SHRI SURESH MUKADAM 2 / DATE OF HEARING : 18.07.2016 / DATE OF PRONOUNCEMENT : 18.07.2016 / O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE FIVE APPEALS UNDER CONSIDERATION AND THEY ARE FILED BY THE REVENUE INVOLVING THE ASSESSMENT YEARS 2008 - 09; 2009 - 10 AND 2010 - 11. SINCE, THE ISSUES RAISED IN ALL THESE APPEALS ARE IDENTICAL, THEREFORE, FOR THE SAKE OF CONVENIENCE, THOUGH THEY ARE HEARD SEPARATELY, CONSIDERING THE COMMONAL ITY OF THE ISSUES INVOLVED, THEY ARE CLUBBED AND DISPOSED OF IN THIS CONSOLIDATED ORDER. 2. SINCE, THE GROUNDS RAISED IN ALL THE FIVE APPEALS ARE IDENTICAL, THEREFORE, FOR THE SAKE OF REFERENCE AND FOR THE PURPOSE OF ADJUDICATION, THE GROUNDS RAISED BY T HE REVENUE IN APPEAL ITA NO.5756/M/2015 (AY 2010 - 2011) ARE EXTRACTED AS UNDER: - 1. WHETHER ON THE FACTS OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE ON ACCOUNT OF DISALLOWING DEPRECIATION ON FIXED ASSETS OF RS. 45,00 ,115/ - IN CONTRAVENTION OF THE DECISION OF ESCORTS LTD VS. UOI 199 ITR 43 WHEREIN IT WAS HELD THAT SINCE SECTION 11 OF THE ACT PROVIDES FOR DEDUCTION CAPITAL EXPENDITURE INCURRED ON ASSETS ACQUIRED FOR THE OBJECTS OF THE TRUST AS APPLICATION AND DOES NOT S PECIFICALLY & EXPRESSLY PROVIDE FOR DOUBLE DEDUCTION ON ACCOUNT OF DEPRECIATION ON THE SAME VERY ASSETS ACQUIRED FROM SUCH CAPITAL EXPENDITURE, NO DEDUCTION SHALL BE ALLOWED U/S 32 FOR THE SAME OR ANY OTHER PREVIOUS YEAR IN RESPECT OF THAT ASSET AS IT AMOU NTS TO CLAIMING OF DOUBLE DEDUCTION. 2. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, CIT (A) ERRED IN ALLOWING THE DEPRECIATION, WHEN THE DELHI HIGH COURT IN THE CASE OF CHARANJIV CHARITABLE TRUST AND KERALA HIGH COURT IN THE CASE OF LISSIE MEDICAL INSTITUTIONS VS. CIT 76 DTR (KER) 372 HAS DECIDED THE ISSUE IN FAVOUR OF THE DEPARTMENT AFTER CONSIDERING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ESCORTS LTD (199 ITR 43). 3 . THE COMMON ISSUE INVOLVED IN ALL THESE APPEALS R ELATE S TO ALLOWABILITY OF CLAIM OF DEPRECIATION ON FIXED ASSETS ACQUIRED FOR THE OBJECTS OF THE TRUST . 4 . IN CONNECTION WITH THE ABOVE ISSUE , LD COUNSEL S FOR THE ASSESSEE MENTIONED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY VARIOUS DECISIONS OF THE TRIBUNAL AS WELL AS THE HONBLE HIGH COURTS . REFERRING TO THE ISSUE OF ALLOWABILITY OF DEPRECIATION ON THE ASSETS ACQUIRED BY THE TRUST, BY VIRTUE OF APPLICATION OF ITS FUNDS, LD COUNSEL BROUGHT OUR ATTENTION TO VARIOUS BINDIN G JUDGMENTS VIZ, THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. INSTITUTE OF BANKING; BOMBAY STOCK EXCHANGE LTD VS. DEPUTY DIRECTOR OF INCOME TAX (EXEMPTION) & ORS; JUDGMENT OF THE BOMBAY HIGH COURT IN THE CASE OF DIRECTOR OF INCOME TAX (EXEMPTION) V S. 3 FRAMJEE CAWASJEE INSTITUTE [1999] 109 CTR (BOM) 463; JUDGMENT OF HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS. MARKET COMMITTEE, PIPLI [2011] 330 ITR 16 (P&H) AND ANOTHER JUDGMENT OF PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS. TI NY TOTS EDUCATION SOCIETY [2011] 330 ITR 21. IN THIS REGARD HE READ OUT THE CONCLUSION GIVEN IN THE CASE OF DIRECTOR OF INCOME TAX (EXEMPTION) VS. FRAMJEE CAWASJEE INSTITUTE WHICH READS AS UNDER: CONCLUSION : DEPRECIATION ON DEPRECIABLE ASSETS HAD TO BE TAKEN INTO ACCOUNT IN COMPUTING INCOME OF TRUST ALTHOUGH THE AMOUNT SPEND ON ACQUIRING SUCH ASSETS HAD BEEN TREATED AS APPLICATION OF INCOME OF TRUST IN THE YEAR IN WHICH ASSETS WERE ACQUIRED; ANSWER BEING SELF - EVIDENT, REFERENCE DECLINED. 5 . ON THE OTH ER HAND, LD DR S RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 6 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED JUDGMENTS OF HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. INSTITUTE OF BANKING , WHEREIN IT WAS HELD THAT THE TRIBUNAL WAS RIGHT IN LAW IN DIRECT THE ASSESSING OFFICER TO ALLOW DEPRECIATION ON THE ASSETS, THE COST OF WHICH HAD BEEN FULLY ALLOWED AS APPLICATION OF INCOME UNDER SECTION 11 IN THE PAST YEARS . CONSIDERING THE BINDING NATURE OF THE JUDGMENTS AND THE COVERED NATURE OF THE ISSUE , WE ARE OF THE OPINION THAT THE ISSUE OF ALLOWABILITY OF DEPRECIATION ON DEPRECIABLE ASSETS SHOULD BE DECIDED IN FAVOUR OF THE ASSESSEE. ACCORDINGLY, THE DECISION TAKEN BY THE CIT (A)S BY ALLOWING THE ASSESSEES CLAIM IN ALL THE APPEALS UNDER CONSIDERATION IS FAIR AND REASONABLE AND THE SAME DOES NOT CALL FOR ANY INTERFERENCE. THUS, ALL THE GROUNDS RAISED BY THE REVENUE IN ALL THE APPEALS UNDER CONSIDERATION ARE DISMISSED. 7 . IN THE RESULT, 5 APPEAL S FILED BY THE REVENUE ARE DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 18TH JULY, 2016 . S D / - S D / - ( SANJAY GARG ) (D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 18.07.2016 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 4 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI