DCIT (Exemption), Ghaziabad V. M/s. Devendra Kumar Garg Charitable Trust, Meerut

ITA 746/DEL/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5481 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 11-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ATIQ AHMAD SENIOR
• Keywords: Charitable institution; Capital expenditure
• Section: 32; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.746/DEL./2016 (ASSESSMENT YEAR : 2011-12) DCIT, EXEMPTION CIRCLE, VS. M/S. DEVENDRA KUMAR GARG GHAZIABAD. CHARITABLE TRUST, 61, SHIVRAJ ROAD, MEERUT. (PAN : AABTD0942R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI V. RAJA KUMAR, ADVOCATE REVENUE BY : SHRI ATIQ AHMAD, SENIOR DR DATE OF HEARING : 23.03.2018 DATE OF ORDER : 04.04.2018 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, DEPUTY COMMISSIONER OF INCOME TAX, E XEMPTION CIRCLE, GHAZIABAD (HEREINAFTER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED OR DER DATED 18.11.2015 PASSED BY LD. CIT(APPEALS), MEERUT QUA THE ASSESSME NT YEAR 2011-12 ON THE GROUND THAT :- THAT THE LD. CIT (A) HAS ERRED IN LAW IN FACT AND CIRCUMSTANCES OF THE CASE IN ALLOWING THE LOSS OF RS.5,61,71,610/ - TO B CARRIED FORWARD ON ACCOUNT OF CAPITAL EXPENDITURE INCURRED DURING THE YEAR, IGNORING THE COMMERCIAL PRINCIPLES ACCORDING TO WHICH CAPITAL EXPENDITURE DOES NOT RELATE TO INCOME & EXP ENDITURE ACCOUNT AT ALL AND HENCE, CAPITAL CAN NOT BE ALLOWE D TO BE CARRIED FORWARD FOR SET OFF AGAINST FUTURE INCOME. ITA NO.746/DEL./2016 2 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICA TION OF THE CONTROVERSY AT HAND ARE : DURING THE ASSESSMENT PRO CEEDINGS, ASSESSING OFFICER NOTICED FROM RETURN OF INCOME AND COMPUTATI ON OF INCOME THAT THE ASSESSEE HAS SHOWN SURPLUS OF RS.39,08,661/- WH ICH HAS BEEN CLAIMED UNDER SECTION 11 OF THE INCOME-TAX ACT, 196 1 (FOR SHORT THE ACT). ASSESSEE ALSO CLAIMED CARRY FORWARD LOSS OF RS.5,61,71,610/-. AO PROCEEDED TO CONCLUDE THAT THE LOSS COMPUTED BY THE ASSESSEE IS NOT BASED ON THE NORMAL COMMERCIAL PRINCIPLES OF ACCOUN TING AND THE EXPENSES CLAIMED AS DEDUCTIBLE ARE CAPITAL IN NATUR E WHICH IS NOT PERMISSIBLE IN LAW OR IN NORMAL ACCOUNTING SYSTEM F OR CARRY FORWARD OF LOSS. 3. ASSESSEE CARRIED THE MATTER BY WAY OF FILING APP EAL BEFORE THE LD. CIT (A) WHO HAS ALLOWED THE SURPLUS/LOSS OF RS.5,22 ,62,949/- AS BROUGHT FORWARD FROM AY 2010-11 ALONG WITH CURRENT YEARS L OSS OF RS.39,08,661/- TOTAL AMOUNTING TO (-) RS.5,61,71,61 0/- TO BE CARRIED FORWARD TO AY 2012-13 BY ALLOWING THE APPEAL. FEEL ING AGGRIEVED, THE REVENUE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF F ILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS RELIED UP ON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN THE LIGHT OF TH E FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO.746/DEL./2016 3 5. AT THE VERY OUTSET, THE LD. AR FOR THE ASSESSEE CONTENDED THAT THE IDENTICAL ISSUE HAS ALREADY BEEN DECIDED IN FAVOUR OF ASSESSEE IN AY 2008-09 VIDE ORDER DATED 26.04.2013 AND IN AY 2010- 11 IN ITA NO.3030/DEL//2015 VIDE ORDER DATED 27.07.2015 BY TH E TRIBUNAL. THIS POSITION OF LAW AND FACTS HAS NOT BEEN CONTROVERTED BY THE LD. DR NOR IT IS BROUGHT ON RECORD IF AFORESAID ORDER PASSED BY T HE TRIBUNAL ARE UNDER CHALLENGE BEFORE THE HIGHER FORUM. 6. BARE PERUSAL OF THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) SHOWS THAT HE HAS EXTENSIBLY THRASHED THE ISSUE IN CONTROVERSY BY RELYING UPON VARIOUS JUDGMENTS REFERRED IN PAGE 4 OF THE IM PUGNED ORDER, THE RATIO OF WHICH IS, INCOME OF ANY TRUST HAS TO BE COMPUTED COMMERCIALL Y AND IN DOING SO, SINCE THERE IS NO SAVING CLAUSE U/ S 11 TO 13 OF THE ACT WHICH WOULD SERVE AS RIDER TO THE ALLOWANCES OF DEP RECIATION U/S 32 WHICH MUST BE ALLOWED. MOREOVER, THE IDENTICAL ISSUE HAS ALREADY BEEN DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN A Y 2010-11 DIRECTING THE AO TO COMPUTE THE LOSS AND TO ALLOW THE SAME TO CARRY FORWARD TO THE NEXT YEAR. CONSEQUENTLY, FINDING NO ILLEGALITY OR PERVERSITY IN THE IMPUGNED ORDER, THE PRESENT APPEAL FILED BY THE REV ENUE IS HEREBY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 4 TH DAY OF APRIL, 2018. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 4 TH DAY OF APRIL, 2018/TS ITA NO.746/DEL./2016 4 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), MEERUT. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.