INCOME TAX OFFCIER (EXEMPTION), WARD-2, JAIPUR, JAIPUR V. GURUKUL SHIKSHAN SANSTHAN, SIKAR, SIKAR

ITA 638/JPR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2056 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 02-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA SINGH
• Assessee Lawyers: P C PARWAL CA DHK
• Keywords: Capital asset; Depreciation; Capital expenditure
• Section: 143(3); 12A; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 638/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11. INCOME TAX, OFFICER (EXEMPTION) WARD-2, JAIPUR. CUKE VS. GURUKUL SHIKSHAN SANSTHAN, SIKAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAATG8671K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJENDRA SINGH (JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 15.09.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 18/09/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM . THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT (A)-III, JAIPUR DATED 22.05.2017 PERTAINING TO A.Y. 2010-11. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE CIT(A) HAS ERRED IN ALLOWING CLAIM OF DEPRECIATION OF RS. 79,07,831/- ON FIXED ASSETS IN SPITE OF THE FACT THAT THE SAME WAS ALLOW ED AS APPLICATION OF INCOME U/S 11 AT THE TIME OF PURCHASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE CIT(A) HAS ERRED IN ALLOWING DEPRECIATION WITHOUT APPRECIA TING THE FACT THAT THE APPLICATION OF 100% EXPENDITURE OF THE CAPITAL ASSE T IS ALREADY ALLOWED AS CAPITAL EXPENDITURE HENCE FURTHER ALLOWANCE OF THE DEPRECIATION ON THE SAME CAPITAL ASSET WOULD AMOUNT TO DOUBLE ALLOWANCE . 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE CIT(A) HAS ERRED IN ALLOWING DEPRECIATION WITHOUT APPRECIA TING THE FACT THAT THE 2 ITA NO. 638/JP/2017. GURUKUL SHIKSHAN SANSTHAN, SIKAR. ASSESSEE HAS NOT CARRIED OUT THE BUSINESS ACTIVITIE S BUT THE RECEIPTS UTILIZED FOR CHARITY. AS THERE WAS NOT BUSINESS AC TIVITY THE CLAIM OF DEPRECIATION WAS NOT ALLOWABLE, THE DEPRECIATION IS ALLOWABLE ONLY IN THE CASE OF BUSINESS OR PROFESSION OR IN THE CASE OF I NCOME FROM OTHER SOURCES. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMEN T WAS FRAMED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT) VIDE ORDER DATED 11.03.2013. DURING THE COURSE OF ASSESSMENT P ROCEEDING, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAD CLAIMED DEPRECIAT ION TO THE EXTENT OF RS. 79,07,831/- IN THE I & E ACCOUNT. THE ASSESSING O FFICER HELD THAT DEPRECIATION ON THE FIXED ASSETS WHOSE ENTIRE COST HAS BEEN ALLOWED AS DEDUCTION BY WAY OF EXEMPTION U/S 12A IS NOT ADMISSIBLE. THEREFORE, HE MADE ADDITION ON THE SAME IN THE GROSS RECEIPTS OF THE ASSESSEE. AGAINST THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMIS SIONS AND FOLLOWING THE JUDGMENT OF THE HONBLE RAJASTHAN HIGH COURT RENDER ED IN THE CASE OF CIT VS. KRISHI UPAJ MANDI SAMITI (2015) 125 DTR 281 (RAJ.H.C.), DE LETED THE DISALLOWANCE. 3. NOW, THE REVENUE IS IN APPEAL. 4. ONLY EFFECTIVE GROUND IS AGAINST DELETION OF DIS ALLOWANCE OF DEPRECIATION ON FIXED ASSETS. 4.1 LD. D/R SUPPORTED THE ORDER OF THE ASSESSING OF FICER. 4.2 ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE S UPPORTED THE ORDER OF THE LD. CIT(A). 4.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD. LD. CIT(A) HAS DECIDED THIS ISSUE IN PARA 4.3 OF HIS ORDER AS UNDER:- 3 ITA NO. 638/JP/2017. GURUKUL SHIKSHAN SANSTHAN, SIKAR. 4.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE, FINDING OF THE AO AND SUBMISSION OF THE APPELLANT. IT IS SEEN THAT THE R AJASTHAN HIGH COURT IN THE CASE OF CIT VS. KRISHI UPAJ MANDI SAMITI AND OTHER HIGH COURTS ALSO HELD THAT DEPRECIATION ON FIXED ASSETS IS SEPARATELY ALLOWABL E EVEN THOUGH ENTIRE FIXED ASSETS WERE ALLOWED AS APPLICATION OF INCOME. RESP ECTFULLY FOLLOWING THE SAME, THE DISALLOWANCE MADE BY AO IS DELETED. 4.4 THE REVENUE HAS NOT DISPUTED THIS FACT, THAT TH E ISSUE OF ALLOWANCE OF DEPRECIATION ON FIXED ASSET HAS BEEN DECIDED BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. KRISHI UPAJ MANDI SAMITI (SUPRA). THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE FINDING OF THE LD. CIT (A), SAME IS HEREBY AFFIRMED. THUS, GROUND RAISED BY THE REVENUE IS REJECTED. IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO. 638 /JP/2017 IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON MONDAY, THE 18 TH D AY OF SEPTEMBER 2017. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 18/09/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- ITO (E), WARD-2, JAIPUR. 2. THE RESPONDENT GURUKUL SHIKSHAN SANSTHAN, SIKA R. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 638/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 4 ITA NO. 638/JP/2017. GURUKUL SHIKSHAN SANSTHAN, SIKAR.