DCIT, Exemption Circle, Ghaziabad V. ASSOCIATION OF MANAGEMENT STUDIES, MEERUT

ITA 6397/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5482 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 05-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHOPAT SINGH
• Keywords: Depreciation; Tax effect; Revenue expenditure
• Section: 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SH. N. K. BILLAIYA, ACCOUNTANT MEMBER AND SH. SUDHANSHU SRIVASTAVA, JUDICIAL MEMB ER (THROUGH VIDEO CONFERENCING) ITA NO.6397/DEL/2018 ASSESSMENT YEAR: 2015-16 DY. COMMISSIONER OF INCOME TAX, EXEMPTION, CIRCLE- GHAZIABAD VS M/S. ASSOCIATION OF MANAGEMENT STUDIES, IIMT NAGAR, O, POCKET, GANGA NAGAR, MEERUT PAN NO. AAATA7059B (APPELLANT) (RESPONDENT) APPELLANT BY SH. BHOPAT SINGH, SR. DR RESPONDENT BY SH. RAJEEV AHUJA, ADVOCATE SH. ABHISHEK AGGARWAL, CA DATE OF HEARING: 21/09/2021 DATE OF PRONOUNCEMENT: 21/09/2021 ORDER PER N. K. BILLAIYA, AM: THIS APPEAL FILED BY THE REVENUE IS PREFERRED AGAI NST THE ORDER OF THE CIT(A), MEERUT DATED 09.07.2018 PERTAI NING TO A.Y. 2015-16. 2. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT T HE CIT(A) ERRED IN ALLOWING THE RE-PAYMENT OF LOANS WHILE THE ASSES SEE HAS 2 UTILIZED ITS LOANS AND OTHER RECEIPTS ON THE REVENU E AS WELL AS CAPITAL EXPENSES IN EARLIER YEARS. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE IS A SOCIETY HAS BEEN GRANTED REGISTRATION U/S. 12 AA OF THE ACT BY THE CIT, MEERUT. THE ASSESSEE SOCIETY IS RUNNING EDUCA TION INSTITUTE IN THE NAME OF IMT MEERUT. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEEDINGS THE AO NOTICED THAT THE ASSE SSEE HAS DISCLOSED TOTAL RECEIPTS OF RS.88.84 CRORES AGAINST WHICH TOTAL REVENUE EXPENDITURE HAS BEEN CLAIMED AT RS.79.20 CR ORES WHICH INCLUDED DEPRECIATION AND SURPLUS OF RS.9.63 CRORES . THE AO FURTHER NOTICED THAT THE RE-PAYMENT OF LOANS OF RS. 1.33 CRORES WAS ALSO CLAIMED AS APPLICATION OF INCOME. THE AO WAS OF THE OPINION THAT REPAYMENT OF LOAN IS NOT AN ALLOWABLE EXPENSE AND IF THE REPAYMENT OF LOAN IS CLAIMED, THE SAME TANTAMOUNT T O CLAIM DOUBLE DEDUCTION. THE AO ACCORDINGLY DISALLOWED THE CLAIM OF REPAYMENT OF LOAN. 4. ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) AN D REITERATED ITS CLAIM. 5. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS THE CIT(A) WAS OF THE OPINION THAT THE CBDT CIRCULAR NO. 100 [ F. NO.195/1/72-IT(A-1) DATED 24.01.1973] WHICH IS AS U NDER :- 162. REPAYMENT OF DEBT INCURRED FOR PURPOSES OF TRU ST/ LOANS ADVANCED BY EDUCATIONAL TRUSTS TO STUDENTS FO R HIGHER STUDIES- WHETHER AMOUNTS TO APPLICATION OF I NCOME 3 1. WHERE A TRUST INCURS A DEBT FOR THE PURPOSES OF THE TRUST, WHETHER THE REPAYMENT OF THE DEBT WOULD AMOU NT TO AN APPLICATION OF THE INCOME FOR THE PURPOSES OF TH E TRUST; AND 2. THE BOARD HAS DECIDED THAT REPAYMENT OF THE LOAN ORIGINALLY TAKEN TO FULFIL ONE OF THE OBJECTS OF TH E TRUST WILL AMOUNT TO AN APPLICATION OF THE INCOME FOR CHARITAB LE AND RELIGIOUS PURPOSES. 6. IN THE LIGHT OF THE AFOREMENTIONED CBDT CIRCULAR THE CIT(A) ALLOWED THE CLAIM. 7. BEFORE US THE DR STRONGLY SUPPORTED THE FINDINGS OF THE AO AND REITERATED THAT REPAYMENT OF LOAN IF ALLOWED WILL TANTAMOUNT TO CLAIM DOUBLE DEDUCTION. 8. PER CONTRA THE COUNSEL SUPPORTED THE FINDINGS OF THE CIT(A). 9. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. THE QUARREL IS IN RELATION T O THE ALLOWABILITY OF REPAYMENT OF LOAN OF RS.13305175/- AGAINST WHICH THE REVENUE IS IN APPEAL. 10. IN OUR CONSIDERED OPINION THE TAX EFFECT ON THI S AMOUNT WOULD BE LESS THAN RS. 50 LACS AND, THEREFORE, IN T HE LIGHT OF THE CBDT CIRCULAR NO.17/2019 DATED 08.08.2019 THIS APPEAL IS NOT MAINTAINABLE. 11. FOR THE SAKE OF THE COMPLETENESS OF ADJUDICATIO N WE FIND THAT THE CIT(A) HAS ALLOWED THE CLAIM FOLLOWING THE BIDING CIRCULAR OF CBDT (SUPRA). WE DO NOT FIND ANY ERROR OR INFIRMITY 4 IN THE FINDINGS OF THE CIT(A), THE APPEAL FILED BY THE REVENUE IS DISMISSED. 12. DECISION ANNOUNCED IN THE OPEN COURT IN THE PRE SENCE OF BOTH THE REPRESENTATIVES ON 21.09.2021. SD/- SD/- (SUDHANSHU SRIVASTAVA) (N. K. BILLAIYA) JUDICIAL MEMBER AC COUNTANT MEMBER *NEHA* DATE:-21.09.2021 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGI STRAR ITAT NEW DELHI DATE OF DICTATION 21 .09.2021 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 21.09.2021 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 21.09.2021 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS 21.09.2021 DATE ON WHICH THE FAI R ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 21.09.2021 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS 21.09.2021 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 21.09.2021 DATE ON WHICH THE FILE GOES TO T HE BENCH CLERK 21.09.2021 DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER