Assistant Commissioner of Income-Tax, Bangalore V. M/s.G.R.Education Trust(R), Mangalore

ITA 701/BANG/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7632 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 27-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K BIJU
• Keywords: Depreciation; Charitable institution
• Section: 143(3); 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH 'C' BEFORE SHRI JASON P BOAZ, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO.701 & 702/BANG/201 7 (ASST. YEAR 2011-12 & 2012-1 3) THE ASST. COMMISSIONER OF INCOME-TAX (EXEMPTIONS), CIRCLE-1, MANGALORE. . APPELLANT VS. M/S G.R EDUCATION TRUST (R), S.NO.17-1 A, KARAVALI COLLEGE, NH-17, BANGRA KULUR, MANGALURU. . RESPONDENT PAN - AAATG4650J. APPELLANT BY : SHRI M.K BIJU, JCIT RESPONDENT BY : NONE DATE OF HEARING : 30-8-2017 DATE OF PRONOUNCEMENT : 6-9-2017 O R D E R PER SHRI JASON P BOAZ, ACCOUNTANT MEMBER: THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), MANGALURU DATED 30/1/2017 FOR ASST. YEARS 2011-12 & 2012-13. SINCE COMMON ISSUES ARE INVOLVED, THESE ITA NOS .701 & 702/B/17 2 APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OFF BY WAY OF THIS COMBINED ORDER. 2. BRIEFLY STATED, FACTS OF THE CASE RELEVANT TO TH ESE APPEALS ARE AS UNDER:- 2.1 THE ASSESSEE, IS A CHARITABLE TRUST, REGISTERE D U/S 12AA OF THE INCOME-TAX ACT 1961 (IN SHORT THE ACT), RUNNING E DUCATIONAL INSTITUTIONS. IN THE ORDERS OF ASSESSMENT FOR ASS T. YEARS 2011-12 AND 2012-13 COMPLETED U/S 143(3) OF THE ACT VIDE ORDER DATED 31/3/2013 AND 30/3/2013 RESPECTIVELY, THE ASSESSING OFFICER (AO), INTER ALIA, DISALLOWED THE ASSESSEES CLAIM FOR DEPRECIATION ON FIXED ASSETS TO THE EXTENT OF RS.71,37,945/- AND RS.77,54,730/- RESPECT IVELY IN THESE YEARS FOLLOWING THE DECISION OF THE HONBLE KERALA HIGH COURT IN THE CASE OF LISSIE MEDICAL INSTITUTION (384 ITR 344 (KE R). 2.2 ON APPEAL, THE CIT(A) MANGALURU VIDE APPELLATE ORDERS DATED 30/1/2017 FOR ASST. YEARS 2011-12 AND 2012-13, ALLO WED THE ASSESSEES CLAIM FOR DEPRECIATION, ON FIXED ASSETS, INTER ALIA, FOLLOWING THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN AL-AMEEN CHARITABLE TRUST (383 ITR 517) AND OF THE CO-ORDINA TE BENCH OF THIS ITA NOS .701 & 702/B/17 3 TRIBUNAL IN THE CASE OF ACIT VS. CITY HOSPITAL CHAR ITABLE TRUST IN ITA NO.676/BANG/2014 DATED 20/3/2015. 3.1 REVENUE BEING AGGRIEVED BY THE ORDERS OF THE CI T(A), MANGALORE DATED 30/1/2017 FOR BOTH ASST. YEARS 2011 -2 AND 2012-13, HAS PREFERRED THESE APPEALS, RAISING IDENTICAL GROU NDS CHALLENGING THE IMPUGNED ORDERS OF THE LD CIT(A) FOR ALLOWING THE A SSESSEES CLAIMS OF DEPRECATION ON FIXED ASSETS FOR THESE YEARS. TH E COMMON GROUNDS RAISED FOR BOTH ASST. YEARS CONCERNED ARE AS UNDER: - 1. THE ORDER OF THE LD. CIT (A) IS OPPOSED TO LAW AND FACTS OF THE CASE. 2. THE LD. CIT(A) HAS ERRED IN ALLOWING THE ASSESSE E'S CLAIM OF DEPRECIATION AND NOT CONSIDERING THE JUDGM ENT OF THE HON'BLE KERALA HIGH COURT IN THE CASE OF LISSIE MEDICAL INSTITUTION DT. 17.02.2012. 3. THE LD. CIT(A) HAS ALSO FAILED TO APPRECIATE THE FACT THAT DEPRECIATION IS ADMISSIBLE ONLY IN RESPECT OF ASSETS USED BY THE ASSESSEE FOR THE PURPOSE OF BUSINESS OR PROFESSION. SINCE THE ASSESSEE IS NOT ENGAGED IN BU SINESS BUT UNDERTAKING CHARITABLE/ RELIGIOUS ACTIVITIES, T HE BENEFIT OF DEPRECIATION SHOULD NOT BE AVAILABLE TO IT. 4. FOR THESE AND SUCH OTHER GROUNDS IT IS URGED THA T THE ORDER OF THE LD. CIT(A), ON THE ABOVE POINTS MAY BE SET ASIDE AND THE ORDER OF THE ASSESSING OFFICER BE RES TORED. ITA NOS .701 & 702/B/17 4 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ALL OR ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF THE HEARING OF THE APPEAL. THE LD DR WAS HEARD IN SUPPORT OF THE GROUNDS RAIS ED BY REVENUE AND PLACED RELIANCE ON THE ORDERS OF THE AO DISALLOWING THE ASSESSEES CLAIM FOR DEPRECIATION ON FIXED ASSETS. 3.2.1 ACCORDING TO THE LD AR FOR THE ASSESSEE, THE ISSUE IN RESPECT OF THE CLAIM OF DEPRECIATION IS COVERED BY THE DECI SION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF DIT(E) VS. AL- AMEEN CHARITABLE TRUST AND OTHERS (383 ITR 517) (KA R) VIDE ORDER DATED 22/2/2016. THE LD AR ALSO, INTER ALIA, PLACED RELIANCE ON THE FOLLOWING DECISIONS OF THE CO-ORDINATE BENCH : (I) MOOGAMBIGAI CHARITABLE TRUST VS. ADDL. CIT (EXEMPTION) IN ITA NO.1224/BANG/2015 DATED 13/7/201 6; (II) ITO EXEMPTION VS. SHARADDHA TRUST IN ITA NO.899/BANG/2016 DATED 7/4/2017, (III) JYOTHI CHARITABLE TRUST VS. DCIT (EXEMPTION) IN ITA NO.622/BANG/2015 DATED 14/8/2015. 3.2.2 IT WAS SUBMITTED THAT THE ISSUE IN DISPUTE I. E CLAIM OF DEPRECIATION IS ALSO COVERED BY THE ABOVE ORDERS OF THE VARIOUS CO- ORDINATE BENCHES OF THIS TRIBUNAL. 3.3.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD, INCLUD ING THE JUDICIAL ITA NOS .701 & 702/B/17 5 PRONOUNCEMENTS CITED. WE FIND THAT THE ISSUE OF CL AIM OF DEPRECIATION BY A CHARITABLE TRUST U/S 11 OF THE AC T HAS BEEN CONSIDERED AND HELD IN FAVOUR OF THE ASSESSEE BY VA RIOUS CO- ORDINATE BENCHES OF THIS TRIBUNAL AS CITED (SUPRA) AND ALSO BY THE HONBLE KARNATAKA HIGH COURT, IN THE CASE OF DIT(EX EMPTION) VS. AL-AMEEN CHARITABLE FUND TRUST & OTHERS (383 ITR 51 7) (KAR). IN THE CASE OF MOOGAMBIGAI CHARITABLE AND EDUCATION TRUST VS. ADIT (EXEMPTION), THE CO-ORDINATE BENCH IN ITS ORDE R IN ITA NO.1224/BANG/2015 DATED 13/7/2016 AT PARA 11 THEREO F HAS HELD AS UNDER:- ITA NOS .701 & 702/B/17 6 ITA NOS .701 & 702/B/17 7 3.3.2 RESPECTFULLY FOLLOWING THE DECISION OF THE HO NBLE KARNATAKA HIGH COURT IN THE CASE OF AL-AMEEN CHARIT ABLE FUND TRUST & OTHERS (383 ITR 517), WHEREIN THE HONBLE H IGH COURT HAS DISTINGUISHED THE DECISION OF THE HONBLE KERAL A HIGH COURT IN LISSIE MEDICAL INSTITUTIONS (SUPRA) AND ALSO FOLLOW ING THE DECISION OF THE CO-ORDINATE BENCH IN THE CASE OF M/S MOOGAM BIGAI CHARITABLE & EDUCATIONAL TRUST, IN ITA NO.1224/BANG /2015 DATED 13/7/2016, WE UPHOLD THE DECISION OF THE LD CIT(A) IN ALLOWING THE ASSESSEES CLAIM FOR DEPRECIATION ON FIXED ASSETS F OR BOTH ASST. YEARS 2011-12 AND 2012-13. CONSEQUENTLY, THE GROUN DS RAISED BY REVENUE (SUPRA) ON THIS ISSUE ARE DISMISSED. ITA NOS .701 & 702/B/17 8 4. IN THE RESULT, REVENUES APPEALS FOR ASST. YEARS 2011-12 AND 2012-13 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6TH SEPTEMBER, 2017 . SD/- SD/- (LALIET KUMAR) (JA SON P BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMB ER BANGALORE DATED : 6/9/2017 VMS COPY TO :1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER SR. PRIVATE SECRETAR Y, ITAT, BANGALORE.