ACIT(E), CIRCLE- 1(1), NEW DELHI V. GS1 INDIA, NEW DELHI

ITA 5778/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8216 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 08-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAJMI
• Assessee Lawyers: RISHABH SUNCHETI
• Keywords: Depreciation; Charitable institution
• Section: 12A; 10(23C); 12; 11

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH C : NEW DELHI ] BEFORE SHRI KUL BHARAT , JUDICIAL MEMBER A N D SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA . NO S . 5 777 AND 5778 /DEL/201 7 (ASSESSMENT YEAR S : 2013 - 14 & 20 1 4 - 1 5 ) ACIT (E) , CIRCLE : 1 (1) NEW DELHI . VS. GSI INDIA, (FORMERLY EAN INDIA) 330, IIND FLOOR, C WING, AUGUST, KRANTI BHAWAN, BHIKAJI CAMA PLACE, NEW DELHI 110 0 66 . PAN: AA A TE0387N (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RISHABH SUNCHETI, ADVOCATE DEPARTMENT BY: SHRI NAJMI [CIT] DR; DATE OF HEARING : 0 4 /0 8 /2021 DATE OF PRONOUNCEMENT : 0 4 /0 8 /2021 O R D E R PER PRASHANT MAHARISHI, A. M. 1. TH E S E ARE THE TWO APPEAL S PERTAINING TO THE SAME ASSESSEE FOR ASSESSMENT YEARS 2013 - 14 AND 2014 - 15 FILED BY THE ACIT (EXEMPTION) CIRCLE 1(1), NEW DELHI, AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 40, NEW DELHI, DATED 28.06.2017 FOR BOTH THE YEARS. 2. TH E LD. ASSESSING OFFICER HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE BENEFITS OF SECTION 11 & 12 OF THE INCOME TAX ACT IGNORING THE FACT THAT THE ASSESSE E S ACTIVITIES ARE NOT WITHIN THE PURVIEW OF THE SECTION 2(15) OF THE I.T. ACT, 1961 DURING THE YEAR. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE CLAIM OF DEPRECIATION OF RS. 17,43,96 4/ - FOR A.Y. 2013 - 14 AND OF RS. 19,14,487 FOR A.Y. 2014 - 15 TO THE ASSESSE E IGNORING THE FACT THAT THE ASSESSE E HAD CLAIMED THE AMOUNT INCURRED ON PURCHASE OF ASSETS IN EARLIER YEARS AS APPLICATION OF PAGE | 2 INCOME, ON WHICH DEPRECIATION IS CLAIMED NOW AND FURTHER ALLOWANCE OF DEPRECIATION WILL BE TANTAMOUNT TO DOUBLE DEDUCTION IN VIEW OF THE RECENT DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF DIT(E) VS. CHARANJIV CHARITABLE TRUST DATED 18.03.2014. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. C1T(A) HAS ERRED IN ALLOWING THE CLAIM OF ACCUMULATED FUNDS OF RS.15,56,41,758/ - FOR A.Y. 2013 - 14 AND RS. 18,31,54,786/ - FOR A.Y. 2014 - 15 U/S 11(2) IN ABSENCE OF BENEFIT OF EXEMPTI ON U/S 11 AND 10(23C) OF THE ACT. 4. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER OR AMEND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARING. 3. BRIEF FACTS OF THE CASE SHOWS THAT ASSESSEE IS A SOCIETY REGISTERED UNDER SECTION 12A OF THE INCOME TAX ACT, 1961 (THE ACT) AS PER ORDER DATED 24.04.1998, WHICH WAS CANCELLED VIDE ORDER DATED 30 TH JUNE, 2006. THE ASSESSEE ALSO MADE AN APPLICATION UNDER SECTION 10(23C)(IV) OF THE ACT FOR ASSESSMENT YEAR 2008 - 09 ONWARDS WHICH WAS REJECTED VIDE ORDER DATED 17.11.2008. AGAINST THIS ORDER THE ASSESSEE FILED A W RIT P ETITION BEFORE THE HONBLE DELHI HIGH COURT IN W .P. (C) NO. 7797/2009 AND VIDE ORDER DATED 26.09.2013 THE HONBLE HIGH COURT ALLOWED THE WRIT PETITION OF THE ASSESSEE AND DIRECT THE D G IT TO GRANT APPROVAL UNDER SECTION 10(23C) ( IV) OF THE ACT. SAME WAS GRANTED ON 23.03.2013. MEANWHILE, THE REGISTRATION WHICH WAS CANCELLED ASSESSEE CHALLENGED THE SAME BEFORE THE CO - ORDINATE BENCH AND SAME WAS RESTORED VIDE ORDER DATED 11.10.2012 IN ITA. NO. 3733 /DEL/2009. 4. IN THIS BACKGROUND ASSESSEE FILED RETURN OF INCOME ON 29.09.2013 AND 28.09.2014 FOR BOTH THE ABOVE RESPECTIVE YEARS DECLARING NIL INCOME CLAIMING EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS T HE ASSESSING OFFICER EXAMINED THE ACTIVITY OF THE ASSESSEE AND HELD THAT IT FALLS UNDER G ENERAL P UBLIC U TILITY. HE ALSO FOUND THAT ASSESSEE IS CHARGING FEES FROM CUSTOMERS AND HAS OBTAINED INTELLECTUAL PROPERTY RIGHTS (IPR) FROM BELGIUM AND TRANSFERRING T HROUGH LICENSE AGREEMENT USE OF SUCH IPR AND UN - SPECIES. THEREFORE, ACCORDING TO THE ASSESSING OFFICER IT IS COVERED BY THE PROVISO TO SECTION 2(15) OF THE ACT. CONSEQUENTLY, FOR BOTH THE ASSESSMENT YEARS THE ASSESSMENT ORDERS WERE PASSED DENYING THE BEN EFIT TO THE ASSESSEE UNDER SECTION 11 AND 12 OF THE ACT. THE ASSESSEE CHALLENGED THOSE ORDERS BEFORE THE LD. CIT (APPEALS). THE LD. CIT (APPEALS) ALLOWED THE APPEAL OF THE ASSESSEE FOR THE REASON THAT ON IDENTICAL FACTS AND CIRCUMSTANCES FOR ASSESSMENT Y EAR 2009 - 10 THE CO - ORDINATE BENCH IN ITA. NO. 1412/DEL/2014 AS PER ORDER DATED 30.11.2016 DISMISSED THE APPEAL OF THE REVENUE AND ALLOWING ASSESSEE BENEFIT OF SECTION 11 AND 12 OF THE ACT. THUS, THE PAGE | 3 LD. CIT (APPEALS) FOLLOWED THE ORDER OF THE CO - ORDINATE BENCH IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009 - 10 AND GRANTED ASSESSEE THE BENEFIT OF SECTION 11 AND 12 OF THE ACT. THE ASSESSING OFFICER IS AGGRIEVED WITH THOSE ORDERS AND HAS PREFERRED THE APPEALS BEFORE US. 5. THE LD. DR SUBMITTED THAT THE ASSE SSING OFFICER HAS CORRECTLY DENIED THE BENEFIT OF SECTION 11 AND 12 OF THE ACT TO THE ASSESSEE AS IT IS HIT BY THE PROVISO TO SECTION 2(15) OF THE ACT. 6. THE LD. AR SUBMITTED THAT AN IDENTICAL ISSUE IS DECIDED IN THE CASE OF THE ASSESSEE BY THE CO - ORDINAT E BENCH FOR EARLIER ASSESSMENT YEAR 2009 - 10 AND, THEREFORE, THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND FIND THAT AN IDENTICAL ISSUE HAS BEEN DECIDED BY THE CO - ORDINATE BENCH IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009 - 10 WHERE THE APPEAL PREFERRED BY THE LD. ASSESSING OFFICER AGAINST THE SIMILAR ORDER OF THE LD. CIT (APPEALS) WAS DISMISSED BY THE CO - ORDINATE BENCH IN ITA. NO. 1412/DEL/2014 DATED 30.11.2016. THE REVENUE COULD NOT SHOW US THAT THE ABOVE ORDER OF THE CO - ORDINATE BENCH HAS BEEN REVERSED BY THE HONBLE HIGH COURT. IN VIEW OF THIS THE ORDER OF THE CO - ORDINATE BENCH IN ASSESSEES OWN CASE FOR EARLIER YEAR BINDS US. ACCORDINGLY, RESPECTFULLY FOLLOWING THAT ORDER, W E HOLD THAT THE ASSESSEE IS ENTITLED TO THE BENEFIT OF SECTION 11 AND 12 OF THE ACT AND THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT (APPEALS). ACCORDINGLY, GROUND NO. 1 OF BOTH THE APPEALS ARE DISMISSED. 8. WITH RESPECT TO THE SECOND GROUND OF APPE AL ABOUT THE CLAIM OF THE DEPRECIATION, DESPITE THE ASSESSEE HAS CLAIMED THE WHOLE COST OF THE ASSETS AS APPLICATION OF THE INCOME AT THE TIME OF PURCHASE OF THOSE ASSETS HAS BEEN ALLOWED BY THE LD. CIT (APPEALS) FOLLOWING THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF DIT (E) VS. INDRA PRASTHA CANCER SOCIETY IN ITA. NO. 464/2014 DATED 18.11.2014. 9. THE LD. DR COULD NOT SHOW US ANY REASON TO DEVIATE FROM THE ABOVE DECISION OF THE LD. CIT (APPEALS) . THEREFORE, WE DO NOT FIND ANY INFIRMITY IN TH E ORDER OF THE LD. CIT (APPEALS) IN ALLOWING THE CLAIM OF DEPRECIATION TO THE ASSESSEE FOR BOTH THE YEARS. ACCORDINGLY, GROUND NO. 2 OF BOTH THE APPEALS ARE DISMISSED. 10. GROUND NO. 3 OF BOTH THE APPEALS BECOMES REDUNDANT IN VIEW OF OUR DECISION IN GROU ND NO. 1 OF THE APPELLANT WHEREIN WE HAVE ALLOWED THE BENEFIT OF SECTION 11 AND 12 OF THE ACT. THEREFORE, THE SAME ARE DISMISSED. PAGE | 4 11. IN VIEW OF THIS, BOTH THE APPEALS OF THE LD. ASSESSING OFFICER ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 4 /0 8 /2021. - S D / - - S D / - ( KUL BHARAT ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 0 4 /0 8 /2021 . * MEHTA * COPY FORWARDED TO 1. APPELLANT; 2. RESPONDENT 3. CIT 4. CIT (A PPEALS ) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI