THE ACIT(Central), Bhopal V. M/s Shriniwas Education Society, Bhopal

ITA 679/IND/2013

• Counselvise Citation: 67922714 RSA 2013
• Duration Of Justice: 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 21-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Keywords: Depreciation; Charitable institution; Question of law; Capital expenditure
• Section: 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI MUKU L KR. SHRAWAT, JUDICIAL MEMBER PAN NO. AAAAS7060B ITA NO. 679/IND/2013 A.Y. : 2008-09 ACIT, (CENTRAL) BHOPAL VS. M/S. SHRINIWAS EDUCATION SOCIETY, E-2/89, ARERA COLONY, BHOPAL (APPELLANT) (RESPONDENT) APPELLANT BY : NONE REVENUE BY : SHRI R. A. VERMA, SR. DR / // / DATE OF HEARING 18.09.2014 /DATE OF PRONOUNCEMENT: 19/09/2014 / O R D E R PER P.K.BANSAL, A.M. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF CIT(A), BILASPUR, DATED 13.8.2013. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL RELATES TO T HE DELETION OF ADDITION OF RS. 2,16,47,521/- MADE ON A CCOUNT OF DEPRECIATION BY THE ASSESSING OFFICER. 3. WHILE COMPUTING THE INCOME OF THE ASSESSEE, THIS IS NOT AN UNDISPUTED FACT THAT THE ASSESSEE IS A SOCIETY R EGISTERED U/S 12A. THE DISALLOWANCE WAS MADE BY THE ASSESSING OFF ICER BEFORE M/S.SHRINIVAS EDUCATION SOCIETY, BHOPAL I.T.A.NO. 679/IND/13 A.Y. 2008-09 2 THE ASSESSEE CLAIMED APPLICATION OF THE ASSETS U/S 11 WHEN HE BOUGHT THE ASSETS FOR CHARITABLE PURPOSES. SIMILAR ISSUE HAS BEEN DECIDED BY THIS TRIBUNAL IN THE CASE OF ACIT VS. M. P.BOARD OF SECONDARY EDUCATION, BHOPAL, IN I.T.A.NO. 588/IND/2 013 IN WHICH THIS TRIBUNAL HAS HELD AS UNDER :- WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. WE NOTED THAT BY THE DECISION OF M.P. HIGH COURT AT JABALPUR IN I.T.A.NO . 14 OF 2011 IN THE CASE OF CIT VS. DEVI SAKUNTALA THARA L CHARITABLE FOUNDATION, IN WHICH THE HON'BLE HIGH CO URT VIDE ORDER DATED 02.04.2013 DISMISSED THE APPEAL OF THE REVENUE HOLDING THAT THE APPEAL DOES NOT INVOLV E ANY SUBSTANTIAL QUESTION OF LAW IN VIEW OF THE VARI OUS DECISIONS OF THE HON'BLE M.P. HIGH COURT IN THE CAS E OF GOVINDRAM SAKSERIA CHARITY TRUST VS. ITO, 168 ITR 387 (MP) AND HON'BLE DELHI HIGH COURT IN THE CASE O F NOKIA CORPORATION VS. DIT,292 ITR 22/27. HON'BLE HI GH COURT ALSO NOTED THAT THE ISSUE IS ALSO DULY COVERE D BY THE DECISION OF M.P. HIGH COURT IN THE CASE OF CIT VS. RAIPUR PALLOTTINE SOCIETY, (1990) 50 TAXMAN 233 (MP ), AND THAT OF DELHI HIGH COURT IN THE CASE OF DIRECTO R OF INCOME TAX VS. VISHWA JAGRITI MISSION, I.T.A.NO. 140/12. HON'BLE HIGH COURT ALSO REFERRED TO THE DECISION OF CIT VS. INSITUTE OF BANKING, (2003) 264 ITR 110, IN WHICH THE DIVISION BENCH OF HON'BLE BOMBAY HIGH COURT ON SIMILAR QUESTION HELD AS UNDER :- QUESTION NO.2, HEREIN IN IDENTICAL TO THE QUESTION WHICH WAS RAISED BEFORE THE BOMBAY HIGH COURT IN THE CASE OF DIRECTOR OF INCOME-TAX (EXEMPTION) VS. FRAMJEE CAWASJEE INSTITUTE,[1993] 109 CTR 463. IN THAT CASE , THE FACTS WERE AS FOLLOWS : THE ASSESSEE WAS THE TR UST. IT DERIVED ITS INCOME FROM DEPRECIABLE ASSET. THE ASSESSEE TOOK INTO ACCOUNT DEPRECIATION ON THOSE AS SETS IN COMPUTING THE INCOME OF THE TRUST. THE ITO HELD THAT DEPRECIATION COULD NOT BE TAKEN INTO ACCOUNT BECAUS E FULL CAPITAL EXPENDITURE HAD BEEN ALLOWED IN THE YEAR OF M/S.SHRINIVAS EDUCATION SOCIETY, BHOPAL I.T.A.NO. 679/IND/13 A.Y. 2008-09 3 ACQUISITION OF THE ASSETS. THE ASSESSEE WENT IN APP EAL BEFORE THE AAC. THE APPEAL WAS REJECTED. THE TRIBUN AL, HOWEVER, TOOK THE VIEW THAT WHEN THE ITO STATED THA T FULL EXPENDITURE HAD BEEN ALLOWED IN THE YEAR OF ACQUISITION OF THE ASSETS, WHAT HE REALLY MEANT WAS THAT THE AMOUNT SPENT ON ACQUIRING THOSE ASSETS HAD BEEN TREATED AS APPLICATION OF INCOME OF THE TRUST IN THE YEAR IN WHICH THE INCOME WAS SPENT IN ACQUIRING THOSE ASSETS. THIS DID NOT MEAN THAT IN COMPUTING INCOME FROM THOSE ASSETS IN SUBSEQUENT YEARS, DEPRECIATION IN RESPECT OF THOSE ASSETS CANNOT BE TAKEN INTO ACCOUN T. THIS VIEW OF THE TRIBUNAL HAS BEEN CONFIRMED BY THE BOMBAY HIGH COURT IN THE ABOVE JUDGMENT. HENCE, QUESTION NO.2 IS COVERED BY THE DECISION OF THE BOM BAY HIGH COURT IN THE ABOVE JUDGMENT. CONSEQUENTLY, QUESTION NO. 2 IS ANSWERED IN THE AFFIRMATIVE, I.E. , IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT. 4. RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF TH E TRIBUNAL, WE CONFIRM THE ORDER OF THE CIT(A) DELETI NG THE DISALLOWANCE. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STAN DS DISMISSED. SD/- SD/- (MUKUL KR. SHRAWAT) (P. K. BANSAL) JUDICIAL MEMBER ACCOUNTANT M EMBER INDORE; DATED 19/09/2014 CPU*SPS M/S.SHRINIVAS EDUCATION SOCIETY, BHOPAL I.T.A.NO. 679/IND/13 A.Y. 2008-09 4 / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT. 3. $%$&' # # ( / CONCERNED CIT 4. # # ( ( ) / THE CIT(A), INDORE 5. +,# &' , # # &' , -.% / DR, ITAT, INDORE 6. ,/0 1 / GUARD FILE. / BY ORDER, -# -# -# -# $2 $2 $2 $2 (ASSTT.REGISTRAR) ITAT, INDORE 1. DATE OF DICTATION- 12.09.2014 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 12.09.2014 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT .. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 26.0 9.2014 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 8. DATE OF DESPATCH OF THE ORDER