M/S. ARIHANT CHARITABLE TRUST, Indore V. THE ACIT 3(1), Indore

ITA 580/IND/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70092 (ITAT-INDORE)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 16-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA; MRIDULA BAJPAI
• Assessee Lawyers: S N AGRAWAL
• Keywords: Depreciation; Charitable institution

Judgement Text

1 INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.580/IND/2013 A.Y. 2008-09 M/S. ARIHANT CHARITABLE TRUST, INDORE PAN AAAAA 0654 R :: APPELLANT VS ACIT-3(1), INDORE :: RESPONDENT ASSESSEE BY SHRI S.N. AGRAWAL & SHRI PANKAJ MOGRA REVENUE BY SMT. MRIDULA BAJPAI & SHRI R.A. VERMA DATE OF HEARING 19.12 .2013 DATE OF PRONOUNCEMENT 1 9 .1 2 .2013 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 26.8.2013 OF THE LD. FIRST APPELLATE AUTHORITY, INDORE . THE 2 ONLY GROUND RAISED IN THIS APPEAL PERTAINS TO MAINTAINI NG THE DISALLOWANCE OF DEPRECIATION OF RS.61,09,555/-. 2. DURING HEARING, SHRI S.N. AGRAWAL ALONG WITH SHRI PANKAJ MOGRA, LEARNED COUNSEL FOR THE ASSESSEE CONTENDE D THAT THE ISSUE HAS ALREADY BEEN DECIDED BY THE TRIBUNAL IN THE CASE OF ASSESSEES ITSELF, WHICH HAS BEEN APPROVED BY HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF GUJR ATI SAMAJ REPORTED IN 64 DTR 76 (MP). IT WAS ALSO POINTED OUT THAT THE DECISION OF M/S. ESCORTS LTD. & OTHERS (199 ITR 43) (SC) IS ON DIFFERENT FACTS AND THE DECISION OF TH E TRIBUNAL IN THE CASE OF ACIT VS. M.P. MADHYAM & OTHERS REPORTED IN 13 ITJ 103 HAS BEEN CONSIDERED BY HON'B LE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. MARKE T COMMITTEE, PIPLI 330 ITR 16 (P & H). RELIANCE WAS ALSO PLACED UPON THE DECISION IN GUJRATI SAMAJ (SUPRA) WHERE IN IT WAS HELD THAT THE ASSESSEE CHARITABLE TRUST IS ENTITL ED TO DEPRECIATION. ON THE OTHER HAND, LD. SR. DR DEFENDED THE 3 ADDITION BY PLACING RELIANCE UPON THE DECISION OF THE LD. CIT(A) BY SUBMITTING THAT DEPRECIATION IS NOT AN ALLOWA BLE DEDUCTION AND PLACED RELIANCE UPON THE DECISION IN ESC ORTS LTD. & OTHERS (SUPRA). 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS A CHARITABLE TRUST, RUNNING A HOSPITAL AND ALSO ENGAGED IN MEDICAL EDUCATION, CLAIMED DEPRECIATION O F RS.61,09,555/-, WHICH WAS DISALLOWED BY THE ASSESSING OFFICER. ON APPEAL, THE LD. CIT(A) AFFIRMED THE VIEW T AKEN BY THE LD. ASSESSING OFFICER. THE ASSESSEE IS AGGRIEVED AND IS IN APPEAL BEFORE THIS TRIBUNAL. 3.1 IF THE OBSERVATION MADE IN THE ASSESSMENT ORDER, CONCLUSION DRAWN IN THE IMPUGNED ORDER, THE ASSERTIO N MADE BY THE LD. RESPECTIVE COUNSEL AND THE MATERIAL AVAILABLE ON RECORD ARE KEPT IN JUXTAPOSITION, WE NOTE THAT WHILE COMING TO A PARTICULAR CONCLUSION, THE LD. CIT( A) HAS 4 ANALYSED THE DECISION FROM HON'BLE JURISDICTIONAL HIGH COURT PRONOUNCED IN THE CASE OF GUJRATI SAMAJ (2011) 64 DTR (MP) 76. IT IS AN UNDISPUTED FACT THAT FOR ASSESSME NT YEAR 2003-04, THE ISSUE OF ALLOWABILITY OF DEPRECIATIO N WAS CONSIDERED BY THE TRIBUNAL AND FOLLOWING THE CASE OF M.P. MADHYAM & OTHERS, 13 ITJ 103, WHEREIN THE LD. SR. DR FAIRLY AGREED THAT THE ISSUE IS COVERED BY THE ORDER O F THE COORDINATE BENCH, ALLOWING DEPRECIATION, DECIDED IN FAV OUR OF THE ASSESSEE. THE HON'BLE JURISDICTIONAL HIGH COUR T, VIDE ORDER DATED 8.7.2011 IN THE CASE OF SHRI GUJRATI SAMAJ, DELIBERATED UPON THE ISSUE, WHERE THE ASSESSEE WAS A CHARITABLE TRUST HELD THAT THE ASSESSEE, A CHARITABLE TRUS T, IS ENTITLED TO DEPRECIATION, FOLLOWING ANOTHER DECISI ON IN CIT VS. RAIPUR PALLOTINE SOCIETY, 180 ITR 579 (MP). WE ARE BOUND BY THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT. IT IS NOTEWORTHY THAT THE HON'BLE P & H HIGH COURT CONSIDERED THE DECISION OF ESCORTS LTD. IN CIT VS. 5 DESHBHAGAT MEMORIAL EDUCATION TRUST (2011) 37 (1) ITCL 131 (P & H) AND HELD THAT DEPRECIATION CANNOT BE DISALLOWED TO A CHARITABLE TRUST ON THE GROUND OF DOUB LE BENEFIT. THE OBJECT OF ALLOWING DEPRECIATION IS ONLY FOR THE PURPOSE OF DETERMINING PERCENTAGE OF FUNDS WHICH HAVE TO BE APPLIED FOR THE PURPOSE OF TRUST WHICH DOES NOT AM OUNT TO DOUBLE DEDUCTION. IDENTICAL VIEW WAS TAKEN IN CIT, KARNAL VS. MARKET COMMITTEE, PIPLI (2010) 36 (I) ITCL 537; 45 DTR 381 (P & H). THE P & H HIGH COURT, VIDE ORD ER DATED 5.7.2010 IN THE CASE OF MARKET COMMITTEE, PIPLI, DISTINGUISHED THE DECISION TAKEN IN ESCORTS LTD. VS. UNION OF INDIA (1993) 199 ITR 43 (SC) AND PLACED RELIANCE UPO N VARIOUS DECISIONS INCLUDING THE DECISIONS FROM HON'B LE JURISDICTIONAL HIGH COURT TAKEN IN RAIPUR PALLOTINE SOC IETY (SUPRA), THE INSTITUTE OF BANKING (264 ITR 110 BOM) ETC. THE RATIO LAID DOWN IN CIT VS. TINNY TONTS EDUCATION SOCIETY (2011) 330 ITR 21 (P & H), CIT VS. SETH MANI LAL 6 RACHODAS VISHRAM BHAWAN TRUST, 198 ITR 598 (GUJ), CIT VS. BHORUKA PUBLIC WELFARE TRUST, 240 ITR 513 (CAL) AND DIT VS. VISHWA JAGRATI MISSION, 73 DTR 195 (DEL) ALSO SUPPORTS THE CASE OF THE ASSESSEE. IN VIEW OF THE AFOR ESAID DECISIONS AND MORE SPECIFICALLY FOLLOWING HON'BLE JURISDICTIONAL HIGH COURT, THE APPEAL OF THE ASSESSEE DESERVES TO BE ALLOWED. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES AT THE CONCLUSION OF THE HEARING ON 19.12.2013. SD/- SD/- (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19.12.2013 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE !VYS!