DCIT (Exemption), Ghaziabad V. M/s. Centre for General Education Society, Ghaziabad

ITA 583/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4219 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 04-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Depreciation; Charitable institution
• Section: 12AA; 32

Judgement Text

ITA NO.583/DEL/2016 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDEN T & SHRI K.N. CHARY, JUDICIAL MEMBER ITA NO.-583/DEL/2016 ( ASSESSMENT YEAR: 2012-13) DCIT (EXEMPTION) CIRCLE-GHAZIABAD GHAZIABAD VS CENTRE FOR GENERAL EDUCATION SOCIETY A-16, SITE-3, UPSIDC INDL. AREA, MEERUT ROAD GHAZIABAD PAN: AAATC8262G ASSESSEE BY SHRI M.R.SAHU, CA REVENUE BY SMT. RITU SHARMA, SR. DR ORDER PER K. NARSIMHA CHARRY, J.M. THIS IS AN APPEAL BY THE REVENUE CHALLENGING THE OR DERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-, GHAZ IABAD (FOR SHORT CALLED LD. CIT(A)) ON 20/11/2015 IN APPEAL NO. 023/298/2014-15/GHAZIABAD, REVENUE PREFERRED THIS A PPEAL ON THE FOLLOWING GROUNDS :- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON F ACTS IN DELETING THE ADDITION MADE ON ACCOUNT OF DEPRECIATION AMOUNTING T O RS. 45,82,787/- IGNORING THE FACT THAT THE PURCHASE OF FIXED ASSETS HAS ALREADY BEEN ALLOWED AS APPLICATION OF INCOME IN RE SPECTIVE YEARS. DATE OF HEARING 03.01.2018 DATE OF PRONOUNCEMENT 03.01.2018 ITA NO.583/DEL/2016 2 2. THE ORDER OF LD. CIT(A) BE CANCELLED AND THE ORDE R OF THE AO BE RESTORED. 2. ASSESSEE IS A SOCIETY THAT WAS GRANTED REGISTRAT ION U/S 12AA OF THE INCOME TAX ACT, 1961 AND FOR THE ASSESSMENT YEAR 2012- 13. LD. AO DENIED THE DEPRECIATION CLAIMED ON ASSET S OF THE ASSESSEE ON THE GROUND THAT THE COST OF SUCH ASSETS WAS A TAKEN AS APPLICATION OF THE FUNDS OF THE ASSESSEE, AND FU RTHER U/S 32 OF THE ACT THE DEPRECIATION IS ALLOWABLE ONLY ON THE A SSETS USED IN BUSINESS OR PROFESSION, AS SUCH THE SAME CANNOT BE EXTENDED TO THE ASSESSEE. IN APPEAL LD. CIT(A) FOLLOWED THE DEC ISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN M/S. INDRAPRAS THA CANCER SOCIETY (INCOME TAX APPEAL NO. 240/2014 DATED 18.11 .2014) CASE AND HELD THAT THE ASSESSEE IS ENTITLED TO CLAIM DEP RECIATION IN RESPECT OF THEIR ASSETS. 3. LD. DR SUBMITTED THAT THE PURCHASE OF FIXED ASSE TS BY THE ASSESSEE HAS ALREADY BEEN ALLOWED AS APPLICATION OF INCOME OF THE ASSESSEE, AS SUCH, IF DEPRECIATION IS ALSO ALLOWED IT AMOUNTS TO DOUBLE BENEFIT. PER CONTRA, IT IS THE SUBMISSION OF THE LD. AR THAT THE DECISION IN CHIRANJIV CHARITABLE TRUST (ITA NO . 322-323/2013 DATED 18.03.2014)WAS OVER RULED BY THE DECISION OF THE HONBLE HIGH COURT IN INDRAPRASTHA CANCER SOCIETYS CASE AS SUCH LD. CIT(A) HAS NOT COMMITTED ANY ERROR IN ALLOWING THE CLAIM OF THE ASSESSEE IN RESPECT OF DEPRECIATION ON THE ASSETS. 4. WE HAVE GONE THROUGH THE RECORD AND THE DECISION S RELIED UPON BY EITHER SIDE. IN INDRAPRASTHA CANCER SOCIETY S CASE (SUPRA) THE HONBLE JURISDICTIONAL HIGH COURT, AFTER OBSERV ING THE DECISIONS IN DIT VS. VISHWA JAGRITI MISSION [2014] 47 TAXMAN. COM.56 (DELHI), CIT VS. SHETH MANILAL RANCHHODDAS V ISHRAM ITA NO.583/DEL/2016 3 BHAVAN TRUST [1992] 198 ITR 598/[1993] 70 TAXMAN 22 8 (GUJ.), CIT VS. RAIPUR PALLOTTINE SOCIETY [1989] 180 ITR 57 9 [1990] 50 TAXMAN 233 (MP) , CIT VS. SOCIETY OF THE SISTERS OF ST. ANNE, [1984] 146 ITR 28/16 TAXMAN 400 (KAR.), CIT VS. TR USTEE OF H.E.H. THE NIZAMS SUPPLEMENTAL RELIGIOUS ENDOWMENT TRUST [1981] 127 ITR 378 (AP) AND CIT VS. RAO BAHADUR CAL AVALA CUNNAN CHETTY CHARITIES [1982] 135 ITR 485 (MAD.), AND HELD THAT WHERE A CHARITABLE INSTITUTION HAS PURCHASED A CAPITAL ASSET AND TREATED AMOUNT SPENT ON SAID ASSET AS APPLICATI ON OF INCOME, THEY ARE ENTITLED TO CLAIM DEPRECIATION ON SAME CAP ITAL ASSET UTILIZED FOR BUSINESS. FACTS AND THE QUESTION OF L AW INVOLVED IN THE CASES ABOVE ARE SIMILAR TO THE CASE ON HAND. WH ILE RESPECTFULLY FOLLOWING THIS DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT, WE FIND NO IRREGULARITY OR ILLEGALITY I N THE FINDINGS OF THE LD. CIT(A) IN THE IMPUGNED ORDER AND THERE IS N O REASON TO INTERFERE WITH THE SAME. WE, THEREFORE, FIND THIS A PPEAL AS DEVOID OF MERITS AND LIABLE TO BE DISMISSED. 5. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD JANUARY, 2018. SD/- SD/- (G.D. AGRAWAL) (K. NARSIMHA CHAR RY) PRESIDENT JUDICIAL MEMBER DATED: 03.01.2018 *BINITA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI ITA NO.583/DEL/2016 4 DRAFT DICTATED ON 03.01.2018 DRAFT PLACED BEFORE AUTHOR 03.01.2018 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 03.01.2018 KEPT FOR PRONOUNCEMENT ON 03.01.2018 FILE SENT TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.