The ACIT, 1(2), Bhopal V. M/s. M.P. Board of Secondary Education, Bhopal

ITA 588/IND/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82669 (ITAT-INDORE)
• Duration Of Justice: 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 01-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R A VERMA
• Keywords: Depreciation; Question of law; Capital expenditure
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI MUKU L KR. SHRAWAT, JUDICIAL MEMBER PAN NO. AAAJB1143R ITA NO. 588/IND/2013 A.Y. :2010-11. ACIT, 1(2), BHOPAL VS. M/S. M.P. BOARD OF SECONDARY EDUCATION, SHIVAJI NAGAR, BHOPAL (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.A.VERMA, SR. DR REVENUE BY : NONE / // / DATE OF HEARING : 10.09.2014 /DATE OF PRONOUNCEMENT: 19.09.2014 / O R D E R PER P.K.BANSAL, A.M. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF CIT(A)-I, BHOPAL, DATED 08.07.2013. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL RELATES TO T HE DELETION OF THE ADDITION MADE BY THE ASSESSING OFFI CER ON ACCOUNT OF DEPRECIATION. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS REGI STERED U/S 12AA OF THE INCOME-TAX ACT, 1961, AND, THEREFOR E, WHILE COMPUTING THE INCOME FOR THE PURPOSE OF CLAIMING AP PLICATION U/S M.P.BOARD SECONDARY EDUCATION, BHOPAL I.T.A.NO. 588/IND/2013 A.Y. 2010-11. 2 11 AND THE ASSESSEE CLAIMED DEPRECIATION AT RS. 2,3 3,05,000/-. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSE SSEE HAS SINCE ALREADY ALLOWED APPLICATION OF INCOME U/S 11 IN RES PECT OF THE INVESTMENT MADE IN FIXED ASSETS ALLOWING THE DEPREC IATION OF THE PURPOSE OF COMPUTATION OF INCOME WILL BE DOUBLE DED UCTION. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE LD. CIT(A) DELETED THE DISALLOWANCE. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. WE NOTED THAT BY THE DECISION OF M.P. HIGH COURT AT JABALPUR IN I.T.A.NO. 14 OF 2011 IN THE CA SE OF CIT VS. DEVI SAKUNTALA THARAL CHARITABLE FOUNDATION, IN WHI CH THE HON'BLE HIGH COURT VIDE ORDER DATED 02.04.2013 DISM ISSED THE APPEAL OF THE REVENUE HOLDING THAT THE APPEAL DOES NOT INVOLVE ANY SUBSTANTIAL QUESTION OF LAW IN VIEW OF THE VARI OUS DECISIONS OF THE HON'BLE M.P. HIGH COURT IN THE CASE OF GOVINDRA M SAKSERIA CHARITY TRUST VS. ITO, 168 ITR 387 (MP) AND HON'BLE DELHI HIGH COURT IN THE CASE OF NOKIA CORPORATION VS. DIT,292 ITR 22/27. HON'BLE HIGH COURT ALSO NOTED THAT THE ISSUE IS ALS O DULY COVERED BY THE DECISION OF M.P. HIGH COURT IN THE CASE OF C IT VS. RAIPUR PALLOTTINE SOCIETY, (1990) 50 TAXMAN 233 (MP), AND THAT OF DELHI HIGH COURT IN THE CASE OF DIRECTOR OF INCOME TAX VS . VISHWA M.P.BOARD SECONDARY EDUCATION, BHOPAL I.T.A.NO. 588/IND/2013 A.Y. 2010-11. 3 JAGRITI MISSION, I.T.A.NO. 140/12. HON'BLE HIGH COU RT ALSO REFERRED TO THE DECISION OF CIT VS. INSITUTE OF BAN KING, (2003) 264 ITR 110, IN WHICH THE DIVISION BENCH OF HON'BLE BOM BAY HIGH COURT ON SIMILAR QUESTION HELD AS UNDER :- QUESTION NO.2, HEREIN IN IDENTICAL TO THE QUESTION WHICH WAS RAISED BEFORE THE BOMBAY HIGH COURT IN THE CASE OF DIRECTOR OF INCOME-TAX (EXEMPTION) VS. FRAMJEE CAWASJEE INSTITUTE,[1993] 109 CTR 463. IN THAT CASE , THE FACTS WERE AS FOLLOWS : THE ASSESSEE WAS THE TR UST. IT DERIVED ITS INCOME FROM DEPRECIABLE ASSET. THE ASSESSEE TOOK INTO ACCOUNT DEPRECIATION ON THOSE AS SETS IN COMPUTING THE INCOME OF THE TRUST. THE ITO HELD THAT DEPRECIATION COULD NOT BE TAKEN INTO ACCOUNT BECAUS E FULL CAPITAL EXPENDITURE HAD BEEN ALLOWED IN THE YEAR OF ACQUISITION OF THE ASSETS. THE ASSESSEE WENT IN APP EAL BEFORE THE AAC. THE APPEAL WAS REJECTED. THE TRIBUN AL, HOWEVER, TOOK THE VIEW THAT WHEN THE ITO STATED THA T FULL EXPENDITURE HAD BEEN ALLOWED IN THE YEAR OF ACQUISITION OF THE ASSETS, WHAT HE REALLY MEANT WAS THAT THE AMOUNT SPENT ON ACQUIRING THOSE ASSETS HAD BEEN TREATED AS APPLICATION OF INCOME OF THE TRUST IN THE YEAR M.P.BOARD SECONDARY EDUCATION, BHOPAL I.T.A.NO. 588/IND/2013 A.Y. 2010-11. 4 IN WHICH THE INCOME WAS SPENT IN ACQUIRING THOSE ASSETS. THIS DID NOT MEAN THAT IN COMPUTING INCOME FROM THOSE ASSETS IN SUBSEQUENT YEARS, DEPRECIATION IN RESPECT OF THOSE ASSETS CANNOT BE TAKEN INTO ACCOUN T. THIS VIEW OF THE TRIBUNAL HAS BEEN CONFIRMED BY THE BOMBAY HIGH COURT IN THE ABOVE JUDGMENT. HENCE, QUESTION NO.2 IS COVERED BY THE DECISION OF THE BOM BAY HIGH COURT IN THE ABOVE JUDGMENT. CONSEQUENTLY, QUESTION NO. 2 IS ANSWERED IN THE AFFIRMATIVE, I.E. , IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT. 5. NO CONTRARY DECISION WAS BROUGHT TO OUR KNOWLEDGE. WE, THEREFORE, CONFIRM THE ORDER OF THE CIT(A) AND DISM ISS THE GROUND TAKEN BY THE REVENUE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS FINALLY DISMISSED. SD/- SD/- (MUKUL KR. SHRAWAT) (P. K. BANSAL) JUDICIAL MEMBER ACCOUNTANT M EMBER INDORE; DATED19/09/2014 CPU*SPS M.P.BOARD SECONDARY EDUCATION, BHOPAL I.T.A.NO. 588/IND/2013 A.Y. 2010-11. 5 / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT. 3. $%$&' # # ( / CONCERNED CIT 4. # # ( ( ) / THE CIT(A), INDORE 5. +,# &' , # # &' , -.% / DR, ITAT, INDORE 6. ,/0 1 / GUARD FILE. / BY ORDER, -# -# -# -# $2 $2 $2 $2 (ASSTT.REGISTRAR) ITAT, INDORE 1. DATE OF DICTATION- 11.09.2014 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 12.09.2014 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT .. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 26.09.2014 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 8. DATE OF DESPATCH OF THE ORDER