ADIT (E) I(2), MUMBAI V. MAHARASHTRA SAMAJ GHATKOPAR, MUMBAI

ITA 6264/MUM/2011

• Counselvise Citation: 626419914 RSA 2011
• Duration Of Justice: 3 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 23-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 09-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: YOGESH KAMATDR
• Assessee Lawyers: RAHUL R SARDA
• Keywords: Depreciation; Capital expenditure
• Section: 80G; 12A; 148; 11

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.6264/MUM/2011 ASSESSMENT YEAR: 2007-08 ADIT(E)I(1), ROOM NO.504, 5 TH FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI-400012 / VS. MAHARSHTRA SAMAJ GHATKOPAR, 17, TILAK ROAD, GHATKOPAR (E), MUMBAI-400077 ( / REVENUE) ( !' # /ASSESSEE) P.A. NO. AAATM4324P / REVENUE BY SHRI YOGESH KAMAT-DR !' # / ASSESSEE BY SHRI RAHUL R. SARDA $ % & # ' / DATE OF HEARING : 23/06/2015 & # ' / DATE OF ORDER: 24/07/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 22/06/2011 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ONLY GROUND RAISED IN THIS APPEAL IS AS UNDER:- WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONBLE HIGH COURT WAS RIGHT IN IGNORING THE RA TIO OF HONBLE MAHARSHTRA SAMAJ GHATKOPAR. ITA NO.6264/MUM/2011 2 SUPREME COURT JUDGMENTS IN THE CASE OF ESCORTS LTD. VS UNION OF INDIA (199 ITR 43) WHEREIN HONBLE SUPREME COURT HA S HELD THAT DOUBLE DEDUCTION CANNOT BE PRESUMED IF THE SAME IS NOT SPECIFICALLY PROVIDED BY LAW, IN ADDITION TO NORMAL DEDUCTION. 2. DURING HEARING OF THIS APPEAL, THE LD. DR, SHRI YOGESH KAMAT, DEFENDED THE CONCLUSION ARRIVED AT IN THE ASSESSMENT ORDER BY ADVANCING HIS ARGUMENTS WHICH A RE IDENTICAL TO THE GROUND RAISED. ON THE OTHER HAND, SHRI RAHUL R. SARDA, LD. COUNSEL FOR THE ASSESSEE, DEFEN DED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER BY CLAI MING THAT THE ISSUE IS COVERED BY THE DECISION OF THE TR IBUNAL DATED 16 TH JUNE, 2015 (ITA NO.5842/MUM/2011) IN THE CASE OF ITO VS KABIBAI & HANSRAJ MORARJI CHARITY TRUST. THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE LD. DR. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE ABOVE SUBMISSIONS, WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION FROM THE ORDER OF THE TRIBUNAL FOR READY REFERENCE:- CHALLENGING THE ORDER DT.8.5.2011 OF CIT(A)-I, MUM BAI, THE ASSESSING OFFICER(AO), HAS RAISED FOLLOWING GRO UNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERR ED IN DIRECTING THE ASSESSING OFFICER TO ALLOW DEPRECIATIO N ON FIXED ASSETS WITHOUT APPRECIATING THE FACT THAT THE CAPITAL EXPENDI TURE INCURRED ON ACQUIRING THE ASSETS HAS ALREADY BEEN CLA IMED AS MAHARSHTRA SAMAJ GHATKOPAR. ITA NO.6264/MUM/2011 3 APPLICATION OF INCOME U/S. 11 OF THE I. T.ACT 1961 I N THE CURRENT / PAST YEARS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT APPRECIATING THE FACT THAT ALLOWING OF DEPRECIATION W ILL RESULT IN DOUBLE DEDUCTION WHICH IS CONTRARY TO THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LTD. V/ S. UNION OF INDIA 199 ITR 43 AND J.K.SYNTHETICS V/S. UNION OF IND IA (1920 65 TAXMAN 420.) 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT APPRECIATING THE FACT THAT THE DEFICIT ARISES OUT OF EXPENDITURE OUT OF INCOME ON WHICH EXEMPTION HAS ALREADY BEEN CLAIMED AND ALLOWING OF SET OFF OF DEFICIT OF EARLIER YEAR AGAI NST INCOME OF CURRENT YEAR WILL RESULT IN DOUBLE DEDUCTION WHICH IS CONTRARY TO THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN T HE CASE OF ESCORTS LTD VS. UOI 199 ITR 43 AND J.K. SYNTHETICS V/ S. UNION OF INDIA (1992) 65 TAXMAN 420. 4. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. DURING THE COURSE OF HEARING BEFORE US, REPRESENTATIVES OF BOTH THE SIDES AGREED THAT IN TH E EARLIER YEARS IDENTICAL ISSUE HAS BEEN DECIDED IN F AVOUR OF THE ASSESSEE BY THE TRIBUNAL. WE FIND THAT THE HON BLE BOMBAY HIGH COURT HAD ALSO DECIDED THE ISSUE IN FAV OUR OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2007-08. W E WILL LIKE TO REPRODUCE THE ORDER OF THE TRIBUNAL FOR THE AY 2009- 10( ITA NO.5312/MUM/2012 DT.12.3.15) 2. AT THE OUTSET IT MAY BE NOTICED THAT LEARNED C IT(A) FOLLOWED THE DECISION , OF HON'BLE BOMBAY HIGH COURT IN ASSESS EE'S OWN CASE FOR A.Y. 2003-04 IN HOLDING THAT THE ASSESSEE IS ENT ITLED TO MAHARSHTRA SAMAJ GHATKOPAR. ITA NO.6264/MUM/2011 4 DEPRECIATION AND DOES NOT AMOUNT TO DOUBLE DEDUCTIO N. PARA 3.3 IN THIS REGARD READS AS UNDER :- 3.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CAS E, SUBMISSION OF THE APPELLANT AND ASSESSMENT ORDER. I FIND THAT THE AP PELLANT HAS TAKEN UP THE MATTER FOR A. Y.2003-04 IN WRIT BEFORE THE HONBLE BOMBAY HIGH COURT WHO HAS ALLOWED THE WRIT NOT ONLY ON ISSUE OF NOTICE U/S. 148 FOR REOPENING THE ASSESSMENT, BUT AL SO ON THE ISSUE OF ALLOWING DEPRECIATION FOR COMPUTING APPLICATION OF INCOME AND CONFIRMED THE DECISION IN THE CASE OF CIT VS. INSTITU TE OF BANKING PERSONNEL REPORTED IN 264 ITR 110. RESPECTFULLY FOLLO WING THE. DECISION OF BOMBAY HIGH COURT IN THE APPELLANT'S OWN CASE FOR A. Y.2003- 04 VIDE WRIT PETITION NO.55 OF 2011, THE A.D . IS DIRECTED TO ALLOW DEPRECIATION CLAIMED BY THE APPELLANT. GROUND NO. 1 IS ALLOWED . 3. AT THE TIME OF HEARING LEARNED COUNSEL PLACED BE FORE US A COPY OF THE ORDER OF HON'BLE HIGH COURT AND ALSO DECISION OF THE ITAT IN ASSESSEE'S OWN CASE FOR A.Y . 2007- 08 (ITA NO. 2019/MUM/2011 DATED 13.1.2015) WHEREIN IDENTICAL ISSUES WERE DECIDED IN FAVOUR OF THE ASSE SSEE. 4. SINCE THE VIEWS TAKEN BY LEARNED CIT(A) ARE IN CONSONANCE WITH THE VIEW TAKEN BY THE ITAT, AND HON 'BLE HIGH COURT (SUPRA), WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LEARNED CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE . RESPECTFULLY,FOLLOWI NG THE ABOVE, GROUNDS OF APPEAL RAISED BY THE ASSESSING OF FICER, ARE DECIDED AGAINST HIM. AS A RESULT, APPEAL FILED BY THE AO STAND DISMISSED . IF THE OBSERVATION MADE IN THE ASSESSMENT ORDER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION MAHARSHTRA SAMAJ GHATKOPAR. ITA NO.6264/MUM/2011 5 DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, THE CONCLUSION DRAWN IN THE ORDER OF THE TRIBUNAL A ND THE ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, WE NOTE THAT THE ASSESS EE IS ENGAGED IN CARRYING OUT CHARITABLE ACTIVITIES BY MA KING DONATION TO THE DIFFERENT ORGANIZATIONS, WHICH ARE CARRYING OUT CHARITABLE ACTIVITIES AS DEFINED IN SECTION 2(1 5) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). BEFORE FINALIZATION OF ASSESSMENT, THE ASSESSEE FILED THE NECESSARY DETAILS, AS CALLED FOR BY THE ASSESSING OFFICER WHI CH WERE EXAMINED BY HIM. THE ASSESSEE FILED COPY OF 12A CER TIFICATE ALONG WITH THE CERTIFICATE U/S 80G OF THE ACT AND A LSO THE CERTIFICATE ISSUED BY CHARITY COMMISSIONER. FROM TH E RECORD OF THE ASSESSEE, IT WAS FOUND BY THE ASSESSING OFFI CER THAT THE ASSESSEE HAS CLAIMED DEPRECIATION AMOUNTING TO RS.16,98,949/- THROUGH APPLICATION WITHIN THE MEANI NG OF SECTION 11(1)(A) OF THE ACT FOR AVAILING EXEMPTION U/S 11 OF THE ACT. THE STAND OF THE LD. DR AS WELL AS THE CO NCLUSION DRAWN BY THE ASSESSING OFFICER IS THAT THE ASSESSEE HAS CLAIMED DOUBLE DEDUCTION AS THE CAPITAL EXPENDITURE INCURRED ON THE ASSETS HAS ALREADY BEEN ALLOWED AS APPLICATION OF INCOME. ON APPEAL, BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS), RELIANCE WAS PLACED UPON THE DECISION FROM HONBLE JURISDICTIONAL HIGH COURT IN CIT VS INSTITUTE OF BANKING PERSONNEL (2003) 264 IT R 110 (BOM.). THE ASSESSING OFFICER WAS DIRECTED TO ALLOW CLAIM OF DEPRECIATION TO THE ASSESSEE. THE REVENUE IS AGGRIE VED AND IS IN APPEAL BEFORE THIS TRIBUNAL. MAHARSHTRA SAMAJ GHATKOPAR. ITA NO.6264/MUM/2011 6 2.2. WE NOTE THAT THE HONBLE JURISDICTIONAL HIGH COURT IN THE AFOREMENTIONED CASE IS ALLOWABLE AS A APPLIC ATION OF INCOME ALTHOUGH THE DEDUCTION WAS ALLOWED, WHEN THE ASSET WAS PURCHASE ORIGINALLY. THE ASSESSEE BEFORE THE L D. COMMISSIONER OF INCOME TAX (APPEALS) EXPLAINED THAT NO CAPITAL EXPENDITURE WAS CLAIMED BY THE ASSESSEE IN ITS INCOME AND EXPENDITURE ACCOUNT IN ANY OF THE EARLIE R YEARS. RESPECTFULLY FOLLOWING THE DECISION FROM HONBLE JURISDICTIONAL HIGH COURT, WE AFFIRM THE STAND OF T HE LD. COMMISSIONER OF INCOME TAX (APPEALS). FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 23/06/2015. SD/ - (RAJENDRA) SD/ - (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER $ % MUMBAI; ( DATED : 24/07/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 $ 1# ( *+ ) / THE CIT, MUMBAI. 4. 0 0 $ 1# / CIT(A)- , MUMBAI 5. 34 .# , 0 *+' * 5 , $ % / DR, ITAT, MUMBAI 6. 6! 7% / GUARD FILE. / BY ORDER, /3+# .# //TRUE COPY// / (DY./ASSTT. REGISTRAR) , $ % / ITAT, MUMBAI