ACIT, Mangalore V. M/s City Hospital Charitable Trust, Mangalore

ITA 676/BANG/2014

• Counselvise Citation: 67621114 RSA 2014
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 19-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P K SRIHARI
• Keywords: Capital asset; Depreciation; Charitable institution; Cost of acquisition; Capital expenditure
• Section: 143(3); 12A; 32; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ITA NO. 676/BANG/2014 ASSESSMENT YEAR : 2011-12 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1), MANGALORE. VS. M/S CITY HOSPITAL CHARITABLE TRUST, 3-30-2389, NANDAVAN, VYASA RAO LANE, KADRI, MANGALORE 575 003. PAN : AAATC 4496J APPELLANT RESPONDENT APPELLANT BY : DR. P.K. SRIHARI, ADDL. CIT(DR) RESPONDENT BY : NONE DATE OF HEARING : 10.03.2015 DATE OF PRONOUNCEMENT : 20.03.2015 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDE R DATED 4.3.2014 OF CIT(APPEALS), MYSORE, RELATING TO AY 20 11-12. 2. THE ASSESSEE IS A CHARITABLE TRUST RUNNING VARIO US MEDICAL INSTITUTIONS INCLUDING PARAMEDICAL AND NURSING COLL EGES. IN THE COURSE OF ITA NO.676/BANG/2014 PAGE 2 OF 11 ASSESSMENT U/S. 143(3) OF THE ACT FOR AY 2011-2012 THE AO NOTICED FROM THE DETAILS OF DEPRECIATION CLAIMED, THAT THE DEPRE CIATION WAS CLAIMED ON ASSETS, THE COST OF ACQUISITION OF THE SAID ASSETS HAD BEEN CLAIMED BY THE ASSESSEE AS CAPITAL EXPENDITURE TOWARDS APPLICATION OF FUNDS TOWARDS THE OBJECTS OF THE TRUST AND ALLOWED AS SUCH. ACCORDING TO THE AO, ALLOWING SUCH A CLAIM WOULD AMOUNT TO ALLOWING DOUBLE DEDUCT ION. ON THE FACTS OF THE PRESENT CASE, HE WAS OF THE VIEW THAT THE DECIS ION OF THE HONBLE SUPREME COURT IN THE CASE OF ESCORTS LIMITED & ANOTHER VS. UNION OF INDIA 199 ITR 43 IS SQUARELY APPLICABLE, WHEREIN IT HAS BEEN CATEGOR ICALLY HELD THAT WHEN DEDUCTION U/S 35(2)(IV) IS ALLOWED I N RESPECT OF CAPITAL EXPENDITURE ON SCIENTIFIC RESEARCH, NO DEPRECIATION IS ALLOWABLE U/S 32 ON THE SAME ASSET. 3. THE ASSESSEE POINTED OUT THAT HON'BLE HIGH COUR T OF KARNATAKA IN THE CASE OF ALL SAINTS CHURCH, 148 ITR 786 (KAR) AND SOCIETY OF SISTERS OF ST. ANN, 146 ITR 28 (KAR) HAS TAKEN THE VIEW THAT WHERE CAPITAL EXPENDITURE ON ACQUISITION OF DEPRECIABLE A SSET IS CONSIDERED AS APPLICATION OF INCOME FOR CHARITABLE PURPOSE, ALLOW ING DEPRECIATION ON THE VERY SAME CAPITAL ASSET WOULD NOT AMOUNT TO DOUBLE ALLOWANCE. THE ASSESSEE ALSO POINTED OUT THAT THE DECISION OF ESCORTS LTD. (SUPRA) WILL NOT BE APPLICABLE AS IT WAS RENDERED ON A DIFFERENT SET OF FACTS. 4. THE AO HOWEVER, HELD THAT ALLOWANCE OF DEPRECIA TION WHEN THE COST HAS ALREADY BEEN RECOVERED BY WAY OF EXEMPTION AS A PPLICATION OF INCOME ITA NO.676/BANG/2014 PAGE 3 OF 11 AMOUNTS TO DOUBLE DEDUCTION AND DOUBLE BENEFIT ON T HE SAME ASSET. THE AO REFERRED TO THE DECISION OF THE OF HON'BLE HIGH COURT OF KERALA IN THE CASE OF DDIT(E) V. LISSIE MEDICAL INSTITUTIONS, 348 ITR 344 (KER) WHEREIN IT WAS HELD THAT ALLOWING DEPRECIATION OF A DEPRECIABLE ASSET WHEN THE COST OF ACQUISITION OF DEPRECIABLE ASSET WAS AL LOWED AS APPLICATION OF INCOME FOR CHARITABLE PURPOSE AMOUNTS TO DOUBLE DEP RECIATION AND THEREFORE DEPRECIATION CANNOT BE ALLOWED. THE AO AL SO DISTINGUISHED THE CASES CITED BY THE ASSESSEE. 5. ON APPEAL BY THE ASSESSEE, THE CIT(A) HELD THAT THE CLAIM OF THE ASSESSEE FOR DEPRECIATION HAS TO BE ALLOWED, FOLLOW ING THE DECISIONS RENDERED IN THE FOLLOWING CASES:- I) MANIPAL HOTEL & RESTAURANT MANAGEMENT COLLEGE T RUST, (MANIPAL IN ITA NOS. 187/UDP/CTI(A)MNG/10-11, DATED 14.3.201 3. II) MANIPAL ACADEMY OF HIGHER EDUCATION, MANIPAL I N ITA NO. 43/UDP/CIT(A) MNG/13-14, DATED 21.1.2014. III) ACADEMY OF GENERAL EDUCATION, MANIPAL, IN ITA NO. 75/UDP/CIT(A)MNG/10- 11, DATED 14.3.2013.. IV) DR. T.M.A. PAL FOUNDATION, MANIPAL IN ITA NO. 76/UDP/CIT(A)MNG/12-13, DATED 14.3.2013. . 6. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENU E HAS RAISED GROUNDS NO.2 TO 2.5 BEFORE THE TRIBUNAL. 7. WE HAVE HEARD THE SUBMISSIONS OF THE LD. DR, WH O RELIED ON THE ORDER OF AO. WE HAVE CONSIDERED THE ORDER OF THE A O. IDENTICAL ISSUE ITA NO.676/BANG/2014 PAGE 4 OF 11 CAME UP FOR CONSIDERATION BEFORE ITAT BANGALORE BEN CH IN THE CASE OF DDIT(E) V. CUTCHI MEMON UNION (2013) 60 SOT 260 BAN GALORE ITAT , WHEREIN SIMILAR ISSUE HAS BEEN DEALT WITH BY THIS T RIBUNAL. IN THE AFORESAID CASE, THE ASSESSEE CLAIMED DEPRECIATION AND THE AO DENIED DEPRECIATION ON THE GROUND THAT AT THE TIME OF ACQUIRING THE REL EVANT CAPITAL ASSET, COST OF ACQUISITION WAS CONSIDERED AS APPLICATION OF INCOME IN THE YEAR OF ITS ACQUISITION. THE AO TOOK THE VIEW THAT ALLOWING DE PRECIATION WOULD AMOUNT TO ALLOWING DOUBLE DEDUCTION AND PLACED RELIANCE ON THE DECISION OF HON'BLE SUPREME COURT IN ESCORTS LTD. (SUPRA) . THE CIT(A), HOWEVER, ALLOWED THE CLAIM OF ASSESSEE. ON FURTHER APPEAL BY THE REVENU E, THE TRIBUNAL HELD AS FOLLOWS:- 20. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IF DEPRECIATION IS NOT ALLOWED AS A NECESSARY DEDUCTION FOR COMPUTI NG INCOME OF CHARITABLE INSTITUTIONS, THEN THERE IS NO WAY TO PR ESERVE THE CORPUS OF THE TRUST FOR DERIVING THE INCOME AS IT IS NOTHI NG BUT A DECREASE IN THE VALUE OF PROPERTY THROUGH WEAR, DETERIORATIO N, OR OBSOLESCENCE. SINCE INCOME FOR THE PURPOSES OF SECT ION 11(1) HAS TO BE COMPUTED IN NORMAL COMMERCIAL MANNER, THE AMO UNT OF DEPRECIATION DEBITED IN THE BOOKS IS DEDUCTIBLE WHI LE COMPUTING SUCH INCOME. IT WAS SO HELD BY THE HONBLE KARNATA KA HIGH COURT IN THE CASE OF CIT VS. SOCIETY OF SISTERS OF ST. ANNE 146 ITR 28 (KAR). IT WAS HELD IN CIT VS. TINY TOTS E DUCATION SOCIETY (2011) 330 ITR 21 (P&H) , FOLLOWING CIT VS. MARKET COMMITTEE, PIPLI (2011) 330 ITR 16 (P&H) : (2011) 2 38 CTR (P&H) 103 THAT DEPRECIATION CAN BE CLAIMED BY A CHA RITABLE INSTITUTION IN DETERMINING PERCENTAGE OF FUNDS APPL IED FOR THE PURPOSE OF CHARITABLE OBJECTS. CLAIM FOR DEPRECIATI ON WILL NOT AMOUNT TO DOUBLE BENEFIT. THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF ESCORTS LTD. 199 ITR 43 (SC) H AVE BEEN REFERRED TO AND DISTINGUISHED BY THE HONBLE COURT IN THE AFORESAID DECISIONS. ITA NO.676/BANG/2014 PAGE 5 OF 11 21. THE ISSUE RAISED BY THE REVENUE IN THE GROUND OF APPEAL IS THUS NO LONGER RES INTEGRA AND HAS BEEN DECIDED BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V. M ARKET COMMITTEE, PIPLI, 330 ITR 16 (P&H). THE HONBLE P UNJAB & HARYANA HIGH COURT AFTER CONSIDERING SEVERAL DECISI ONS ON THAT ISSUE AND ALSO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ESCORTS LTD. (SUPRA), CAME TO THE CONCLUSIO N THAT DEPRECIATION IS ALLOWABLE ON CAPITAL ASSETS ON THE INCOME OF THE CHARITABLE TRUST FOR DETERMINING THE QUANTUM OF FUN DS WHICH HAVE TO BE APPLIED FOR THE PURPOSE OF TRUSTS IN TERMS OF SECTION 11 OF THE ACT. THE HONBLE PUNJAB & HARYANA HIGH COURT MADE A REFERENCE TO THE DECISION OF THE HONBLE SUPREME CO URT IN THE CASE OF ESCORTS LTD. (SUPRA) AND OBSERVED THAT THE HONBLE SUPREME COURT WAS DEALING WITH A CASE OF TWO DEDUCT IONS UNDER DIFFERENT PROVISIONS OF THE ACT, ONE U/S. 32 FOR DE PRECIATION AND THE OTHER ON ACCOUNT OF EXPENDITURE OF A CAPITAL NA TURE INCURRED ON SCIENTIFIC RESEARCH U/S. 35(1)(IV) OF THE ACT. THE HONBLE COURT THEREAFTER HELD THAT A TRUST CLAIMING DEPRECI ATION CANNOT BE EQUATED WITH A CLAIM FOR DOUBLE DEDUCTION. THE HON BLE PUNJAB & HARYANA HIGH COURT HAS ALSO MADE A REFERENCE TO T HE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT V. SOCIETY OF SISTERS OF ANNE, 146 ITR 28 (KAR), WHERE IN IT WAS HELD THAT U/S. 11(1) OF THE ACT, INCOME HAS TO BE COMPUT ED IN NORMAL COMMERCIAL MANNER AND THE AMOUNT OF DEPRECIATION DE BITED IN THE BOOKS IS DEDUCTIBLE WHILE COMPUTING SUCH INCOME. I N VIEW OF THE AFORESAID DECISION ON THE ISSUE, WE ARE OF THE VIEW THAT THE ORDER OF THE CIT(A) ON THE ABOVE ISSUE DOES NOT CALL FOR ANY INTERFERENCE. 22. CONSEQUENTLY, GROUND NO.5 RAISED BY THE REVENU E IS DISMISSED. 8. WE MAY ALSO ADD THAT THE LEGAL POSITION HAS SIN CE BEEN AMENDED BY A PROSPECTIVE AMENDMENT BY THE FINANCE (NO.2) AC T, 2014 W.E.F. 1.4.2015 BY INSERTION OF SUB-SECTION (6) TO SECTION 11 OF THE ACT, WHICH READS AS UNDER:- ITA NO.676/BANG/2014 PAGE 6 OF 11 (6) IN THIS SECTION WHERE ANY INCOME IS REQUIRED TO BE APPLIED OR ACCUMULATED OR SET APART FOR APPLICATION, THEN, FOR SUCH PURPOSES THE INCOME SHALL BE DETERMINED WITHOUT ANY DEDUCTION OR ALLOWANCE BY WAY OF DEPRECIATION OR OTHERWISE IN RESPECT OF ANY ASSET, ACQUISITION OF WHICH HAS BEEN CLAIMED AS AN APPLICATION OF INCOME UNDER THIS SECTION IN THE SAM E OR ANY OTHER PREVIOUS YEAR. 9. AS ALREADY STATED, THE AFORESAID AMENDMENT IS P ROSPECTIVE AND WILL APPLY ONLY FROM A.Y. 2015-16. IN VIEW OF THE ABOVE LEGAL POSITION, WE ARE OF THE VIEW THAT THE ORDER OF THE CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. CONSEQUENTLY GROUNDS NO.2 TO 2.5 RAISED BY THE REVE NUE ARE DISMISSED. 10. THE OTHER ISSUE THAT ARISES FOR CONSIDERATION IN THIS APPEAL WHICH IS PROJECTED BY THE REVENUE IN GROUNDS NO.3 TO 3.2 OF THE GROUNDS OF APPEAL, IS AS TO WHETHER THE CIT(APPEALS) WAS JUSTIFIED IN HOLDING THAT ASSESSEE, A TRUST, IS ENTITLED TO CARRY FORWARD EXPENDITURE INC URRED IN EXCESS OF ITS INCOME FOR SETTING OFF AGAINST INCOME OF THE SUCCEE DING YEARS? THE ASSESSEE IS A TRUST REGISTERED U/S. 12A OF THE ACT. FOR THE A.Y. 2011-12, THE ASSESSEE FILED A RETURN OF INCOME SHOWING APPLI CATION OF INCOME BY MORE THAN RS.1,57,89,730/- OF ITS RECEIPTS. THE ASS ESSEE SOUGHT TO CARRY FORWARD THE EXCESS APPLICATION FOR SETTING OFF AS A PPLICATION OF INCOME IN THE SUBSEQUENT ASSESSMENT YEARS. THE ASSESSEE RELIED O N VARIOUS JUDICIAL DECISIONS INCLUDING THE DECISION OF THE ITAT, BANGA LORE IN THE CASE OF MEDICAL RELIEF SOCIETY OF SOUTH KANARA WHEREIN THE TRIBUNAL HAD ALLOWED CARRY FORWARD OF EXCESS APPLICATION OF INCO ME FOR SET OFF AS APPLICATION OF INCOME IN SUBSEQUENT ASSESSMENT YEAR S. THE AO HOWEVER ITA NO.676/BANG/2014 PAGE 7 OF 11 OBSERVED THAT IN THE CASE OF MEDICAL RELIEF SOCIETY OF SOUTH KANARA , THE DEPARTMENT HAS FILED AN APPEAL BEFORE THE HONBLE H IGH COURT OF KARNATAKA VIDE ITA 1034 OF 2008 ON THE SIMILAR ISSUE AGAINST THE ORDER OF THE HONBLE ITAT ALLOWING EXCESS APPLICATION TO BE CARRIED FORW ARD AND SET OFF. THE SAME IS PENDING BEFORE THE JURISDICTIONAL HIGH COUR T AS ON DATE. SINCE THE MATTER IS PENDING BEFORE THE JURISDICTIONAL HIGH CO URT, THE CLAIM FOR CARRY FORWARD WAS REFUSED BY THE AO IN ORDER TO KEEP THE ISSUE ALIVE. 11. ON APPEAL BY THE ASSESSEE, THE CIT(A) DIRECTED THE AO TO ALLOW CLAIM OF THE ASSESSEE AND IN DOING SO, FOLLOWED THE DECISION RENDERED BY THE ITAT BANGALORE IN THE FOLLOWING CASES:- THIS ISSUE WAS ALSO BEFORE ME IN THE FOLLOWING TRU STS CASES, WHEREIN I HAVE DECIDED THE ISSUE IN FAVOUR OF THE A SSESSEE TRUSTS. I) MANIPAL HOTEL & RESTAURANT MANAGEMENT COLLEGE T RUST, (MANIPAL IN ITA NOS. 187/UDP/CTI(A)MNG/10-11, DATED 14.3.2013. II) MANIPAL ACADEMY OF HIGHER EDUCATION, MANIPAL I N ITA NO. 43/UDP/CIT(A) MNG/13-14, DATED 21.1.2014. III) ACADEMY OF GENERAL EDUCATION, MANIPAL, IN ITA NO. 75/UDP/CIT(A)MNG/10- 11, DATED 14.3.2013.. IV) DR.T.M.A. PAL FOUNDATION, MANIPAL IN ITA NO. 76/UDP/CIT(A)MNG/12-13, DATED 14.3.2013. 12. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. ITA NO.676/BANG/2014 PAGE 8 OF 11 13. IN THE GROUNDS OF APPEAL, THE REVENUE HAS REITE RATED THE STAND OF THE AO THAT THERE IS NO PROVISION IN THE ACT TO ALL OW CARRY FORWARD OF EXCESS APPLICATION OF INCOME FOR SET OFF AS APPLICATION OF INCOME IN SUBSEQUENT YEARS. THE LD. DR REITERATED THE STAND OF THE REVE NUE AS CONTAINED IN THE GROUNDS OF APPEAL. 14. WE HAVE CONSIDERED HIS SUBMISSION. SECTION 11( 1)(A) DOES NOT CONTAIN ANY WORDS OF LIMITATION TO THE EFFECT THAT THE INCOME SHOULD HAVE BEEN APPLIED FOR CHARITABLE OR RELIGIOUS PURPOSE ON LY IN THE YEAR IN WHICH THE INCOME HAS ARISEN. THE APPLICATION FOR CHARITAB LE PURPOSES AS CONTEMPLATED IN SECTION 11(1)(A) TAKES PLACE IN THE YEAR IN WHICH THE INCOME IS ADJUSTED TO MEET THE EXPENSES INCURRED FO R CHARITABLE OR RELIGIOUS PURPOSES. HENCE, EVEN IF THE EXPENSES FOR SUCH PURP OSES HAVE BEEN INCURRED IN THE EARLIER YEARS AND THE SAID EXPENSES ARE ADJUSTED AGAINST THE INCOME OF A SUBSEQUENT YEAR, THE INCOME OF SUCH SUB SEQUENT YEAR CAN BE SAID TO BE APPLIED FOR CHARITABLE OR RELIGIOUS PURP OSES IN THE YEAR IN WHICH SUCH ADJUSTMENT TAKES PLACE. IN OTHER WORDS, THE SE T-OFF OF EXCESS OF EXPENDITURE INCURRED OVER THE INCOME OF EARLIER YEA RS AGAINST THE INCOME OF A LATER YEAR WILL AMOUNT TO APPLICATION OF INCOME O F SUCH LATER YEAR. THE ABOVE IS THE POSITION OF LAW AS HELD IN THE CASE OF CIT VS. MAHARANA OF MEWAR CHARITABLE FOUNDATION 164 ITR 439 (RAJ); CIT VS. SHRI PLOT SWETAMBER MURTI PUJAK JAIN MANDAL 211 ITR 293 (GUJ. ). IN CIT VS. INSTITUTE OF BANKING PERSONNEL SELECTION 264 ITR 11 0 (BOM), IT WAS HELD THAT IN CASE OF CHARITABLE TRUST WHOSE INCOME IS EX EMPT UNDER S. 11, EXCESS ITA NO.676/BANG/2014 PAGE 9 OF 11 OF EXPENDITURE IN THE EARLIER YEARS CAN BE ADJUSTED AGAINST INCOME OF SUBSEQUENT YEARS AND SUCH ADJUSTMENT WOULD BE APPLI CATION OF INCOME FOR SUBSEQUENT YEARS AND THAT DEPRECIATION IS ALLOWABLE ON THE ASSETS THE COST OF WHICH HAS BEEN FULLY ALLOWED AS APPLICATION OF I NCOME UNDER S. 11 IN PAST YEARS. IN GOVINDU NAICKER ESTATE VS. ADIT 248 ITR 368 (MAD) , THE HONBLE MADRAS HIGH COURT HELD THAT THE INCOME OF T HE TRUST HAS TO BE ARRIVED AT HAVING DUE REGARD TO THE COMMERCIAL PRIN CIPLES, THAT S. 11 IS A BENEVOLENT PROVISION, AND THAT THE EXPENDITURE INCU RRED ON RELIGIOUS OR CHARITABLE PURPOSES IN EARLIER YEAR OR YEARS CAN BE ADJUSTED AGAINST THE INCOME OF THE SUBSEQUENT YEAR. THE PRINCIPLE THAT T HE LOSS INCURRED UNDER ONE HEAD CAN ONLY BE SET OFF AGAINST THE INCOME FRO M THE SAME HEAD IS NOT OF ANY RELEVANCE, IF THE EXPENDITURE INCURRED WAS F OR RELIGIOUS OR CHARITABLE PURPOSES, AND THE EXPENDITURE ADJUSTED AGAINST THE INCOME OF THE TRUST IN A SUBSEQUENT YEAR, WOULD NOT AMOUNT TO AN INCIDENCE O F LOSS OF AN EARLIER YEAR BEING SET OFF AGAINST THE PROFIT OF A SUBSEQUE NT YEAR. THE OBJECT OF THE RELIGIOUS AND CHARITABLE TRUST CAN ONLY BE ACHIEVED BY INCURRING EXPENDITURE AND IN ORDER TO INCUR THAT EXPENDITURE, THE TRUST S HOULD HAVE AN INCOME. SO LONG AS THE EXPENDITURE INCURRED IS ON RELIGIOUS OR CHARITABLE PURPOSES, IT IS THE EXPENDITURE PROPERLY INCURRED BY THE TRUST, AND THE INCOME FROM OUT OF WHICH THAT EXPENDITURE IS INCURRED, WOULD NOT BE LI ABLE TO TAX. THE EXPENDITURE, IF INCURRED IN AN EARLIER YEAR IS ADJU STED AGAINST THE INCOME OF A LATER YEAR, IT HAS TO BE HELD THAT THE TRUST HAD INCURRED EXPENDITURE ON RELIGIOUS AND CHARITABLE PURPOSES FROM THE INCOME O F THE SUBSEQUENT YEAR, ITA NO.676/BANG/2014 PAGE 10 OF 11 EVEN THOUGH THE ACTUAL EXPENDITURE WAS IN THE EARLI ER YEARS, IF IN THE BOOKS OF ACCOUNT OF THE TRUST SUCH EARLIER EXPENDITURE HA D BEEN SET OFF AGAINST THE INCOME OF THE SUBSEQUENT YEAR. THE EXPENDITURE THAT CAN BE SO ADJUSTED CAN ONLY BE EXPENDITURE ON RELIGIOUS AND CHARITABLE PURPOSES AND NO OTHER. THE HIGH COURT RELIED ON THE DECISION IN THE CASE O F CIT VS. SOCIETY OF SISTERS OF ST. ANNE 146 ITR 28 (KAR.) . 15. WE ARE THEREFORE OF THE VIEW THAT THERE IS NO M ERIT IN GROUNDS NO.3 TO 3.2 RAISED BY THE REVENUE. ACCORDINGLY, THE SAME AR E DISMISSED. 16. IN THE RESULT, THE APPEAL BY THE REVENUE IS DISMISSED . PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF MARCH, 2015. SD/- SD/- ( ABRAHAM P. GEORGE ) ( N.V. VASU DEVAN ) ACCOUNTANT MEMBER JUDICIAL M EMBER BANGALORE, DATED, THE 20 TH MARCH, 2015. /D S/ ITA NO.676/BANG/2014 PAGE 11 OF 11 COPY TO: 1. APPELLANT 2. RESPONDENTS 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR / SENIOR PRIVATE SECRETARY ITAT, BANGALORE.