PALLONJI SHAPOORJI CHARITY TRUST, MUMBAI V. INCOME TAX OFFICER-(E) RANGE 2(2), MUMBAI

ITA 6614/MUM/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0301 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 15-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Assessee Lawyers: BEHARILAL
• Keywords: Depreciation
• Section: 143(3); 12A; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 6614 / MUM/20 17 ( ASSESSMENT YEAR : 2012 - 13 ) M/S. PALLONJI SHAPOORJI CHARITY TRUST, SHAPOORJI PALLONJI CENTRE 41/44, MINOO DESAI MARG COLABA, MUMBAI 400 005 VS . THE INCOMETAX OFFICER (E) RANGE 2(2), MUMBAI PAN/GIR NO. AAATD2554N APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI BEHARILAL REVENUE BY MS. N. HEMALATHA DATE OF HEARING 06 / 02 /201 8 DATE OF PRONOUNCEME NT 16 / 02 /201 8 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 1, MUMBAI DATED 16/08/2017 FOR A.Y.2012 - 13 IN THE MATTER OF ORDER PASSED U/S.143(3) OF THE IT ACT 1961. 2. IN THIS APPEAL, ASSESSEE IS AGGR IEVED FOR CONFIRMING THE DISALLOWANCE OF DEDUCTION CLAIMED BY ASSESSEE OF RS.13,01,154/ - U/S.24 IN RESPECT OF INCOME FROM HOUSE PROPERTY. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSE D. 4. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A TRUST REGISTERED WITH DIT (E), MUMBAI U/S. 12A UNDER REGISTRATION NO. TR/3243 AND WITH CHARITY COMMISSIONER, MUMBAI VIDE REGISTRATION NO. THE ASSESSEE FILED ITS ITA NO. 6614/MUM/2017 M/S. PALLONJI SHAPOORJI CHARITY TRUST 2 RETURN OF INCOME ON 28.9.2012 ALONG WITH THE INCOME & EXPENDITURE ACCOUNT, BALANCE SHEET AND AUDIT REPORT IN FORM 10B DECLARING TOTAL INCOME AT RS.NIL. HOWEVER, THE A.O COMPLETED THE ASSESSMENT VIDE ORDER DATED 16.3.2015 U/S, 143(3) OF THE I.T. ACT, 1961 DISALLOWING ASSESSEES CLAIM OF DEDUCTION U/S.24 IN RESPECT OF INCOME FROM HOUSE PROPERTY. THE FACTS OF THE CASE ARE THAT AS PER THE INCOME & EXPENDITURE ACCOUNT, THE ASSESSEE HAS RECEIVED RENT INCOME OF RS.49,10,175 / - AND IN THE COMPUTATION OF INCOME THE ASSESSEE HAS SHOWN RENT INCOME OF RS.30,36,025/ - AFTER CLAIMING MUNICIPAL TAXES OF RS.57299 6/ - AND DEDUCTION U/S.24(A) OF THE I.T. ACT @ 30% OF RS. 13,01,154/ - . 5. AS PER THE COMPUTATION OF INCOME SO FILED BY THE ASSESSEE, THE T OTAL INCOME OF THE T RUST WAS SHOWN AT RS. 70,38,734/ - , 85% OF WHICH WAS WORKED OUT AT RS.59,82,9 24/ - . AS AGAINST THIS, THE ASSESSEE CLAIMED TO HAVE SPENT RS. 57,15,790/ - FOR THE OBJECT OF THE TRUST, LEAVING A SHORT FALL OF RS.2,67,134/ - WHICH THE ASSESSEE CLAIMED WOULD BE OFFSET BY THE AMOUNT OF TDS CLAIMED BY IT OF RS.6,72,607 / - . 6. BY THE IMPUGNE D ORDER, CIT(A) CONFIRMED THE AOS ACTION FOR DISALLOWING CLAIM OF DEDUCTION U/S.24. 7. THE ASSESSEE'S CLAIM OF ALTERNATIVE COMPUTATION THAT IT HAD SPENT 85% OF RS.70,38,734/ - WHICH WORKS OUT TO RS.59,82,924/ - AND AGAINST THIS THE ASSESSEE HAS SPENT RS.5 7,15,790/ - WAS REJECTED AS IN THE ORIGINAL COMPUTATION OF TOTAL INCOME ASSESSEE HAD SHOWN AMOUNT SPENT TOWARD THE OBJECT OF THE TRUST INCLUDING ADMINISTRATIVE EXPENSES AMOUNTING TO ITA NO. 6614/MUM/2017 M/S. PALLONJI SHAPOORJI CHARITY TRUST 3 RS.44,04,469 / - AND THE SUBMISSION NOW BEING MADE WAS CONSIDERED BY AO AN AFTERTHOUGHT . 8. AG AINST THE ABOVE ORDER OF CIT(A), ASSESSE E IS IN FURTHER APPEAL BEFORE ME . 9. I HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM RECORD THAT AO HAS DISALLOWED ASSESSEES CLAIM OF DEDUCTION U/S.2 4 IN RESPECT OF INCOME FROM HOUSE PROPERTY ON THE PLEA THAT ASSESSEE IS A TRUST. INCOME OF THE TRUST IS TO BE COMPUTED COMMERCIALLY, KEEPING IN VIEW THE PROVISIONS OF THE ACT, THE HON BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF TINY TOTS EDUCATION SOC IETY 330 ITR 21 HELD THAT ASSESSEE IS ENTITLED TO CLAIM DEPRECIATION EVEN IF ENTIRE AMOUNT OF ASSETS HAVE BEEN SHOWN AS UTILIZATION OF FUNDS . JURISDICTIONAL HIGH COURT IN CASE OF INSTITUTE OF BANKING PERSONNEL SELECTION HAS ALSO HELD THAT CLAIM OF DEPRECIA TION ON FIXED ASSET HAS TO BE ALLOWED EVEN IF ENTIRE AMOUNT WAS SHOWN AS UTILIZATION OF FUNDS WHILE COMPUTING SURPLUS OF THE ASSESSEES FUNDS . THIS DECISION OF THE BOMBAY HIGH COURT HAS BEEN RECENTLY AFFIRMED BY THE HONBLE SUPREME COURT . A PPLYING THE PROPO SITION OF LAW LAID DOWN IN CASE OF INSTIT U TE OF BANKING PERSONNEL SELECTION, I DO NOT FIND ANY MERIT FOR THE DISALLOWANCE OF CLAIM OF DEDUCTION U/S.24 IN RESPECT OF INCOME OF ASSESSEE - TRUST FROM HOUSE PROPERTY. ACCORDINGLY, I DIRECT THE AO TO ALLOW DEDUCTION U/S.24 AS CLAIME D BY THE ASSESSEE. ITA NO. 6614/MUM/2017 M/S. PALLONJI SHAPOORJI CHARITY TRUST 4 10. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED IN TERMS INDICATED HEREINABOVE. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 16 / 02 /201 8 S D/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DATED 16 / 02 /201 8 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//