Income Tax Officer (Exemptions), Ward- 1, Gulbarga V. Shivpur Shikshana Samiti, Ballari

ITA 915/BANG/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9577 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2020
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 19-12-2019
• Assessment Year: 2015-2016
• Appeal Filed On: 30-04-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KARUPPUSAMY
• Keywords: Depreciation; Charitable institution; Additional evidence; TDS; Set aside
• Section: 201; 119; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES : C , BANGALORE BEFORE SHRI B.R.B A SKARAN , A CCOUNTANT M EMBER AND S HRI PAVAN KUMAR GADALE, J UDICIAL M EMBER ITA NO . 872 (BANG)/201 9 (ASSESSMENT YEAR : 201 5 - 16 ) M/S SHIVAPUR SHIKSHANA SAMITI, PALACE ROAD, SANDUR - 583 119 B ELLARY PANNO.AA A A S6788 A APPELLANT VS THE INCOME T AX OFFICER (EXEMPTIONS) WARD - 1, GULBARGA RESPONDENT AND ITA N O .915(B)/2019 (ASSESSMENT YEAR 2015 - 16) (B Y REVENUE) APPELLANT BY : S HRI B.S.BALACH A N DRAN, ADVOCATE REVENUE BY : S HRI KARUPPUSAMY, S.R. ADDL.CIT DATE OF HEARING : 1 9 - 12 - 20 19 DATE OF PRONOUNCEMENT : 08 - 01 - 2020 O R D E R PER SHRI B.R.BASKARAN, ACCOUNTANT MEMBER : THESE ARE CROSS APPEALS DIRECTED AGAINST THE ORDER DATED 20 - 02 - 2019 PASSED BY THE L D.CIT(A), KALABURAGI AND THEY RELATE TO ASSESSMENT YEAR 2015 - 16. 2. THE REVENUE IS IN APPEAL CHALLENGING THE DECISION OF THE L D.CIT(A) IN GRANTING EXEMPTION U/S11(1)(D) OF THE IT ACT, IN RESPECT OF ITA NO S . 872 & 915 / BANG/201 9 PAGE 2 OF 4 DONATION OF RS.2.00 CRORES REC EIVED FROM M/S THE SANDUR MANGANE S E & IRON ORE LTD., (SMIORE LTD., ) 2.1 THE ASSESSEE IS IN APPEAL CHALLENGING THE ORDER OF L D.CIT(A) IN CONFIRMING THE DISALLOWANCE OF DEPRECIATION CLAI MED BY T HE ASSESS E E. 3. THE ASSESSEE IS A CHARITABLE INSTITUTION RUNNING EDUC A T I ONAL INSTITUTIONS . DURING THE YEAR UNDER CONSIDERATION, ASSESSEE HAS RECEIVED A DONATION OF RS.2.00 CRORES FROM M/S SMIORE LTD. AS CORPUS DONATION AND ACCORDINGLY, CLAIMED EXEMPTION U/S11(1)(D) OF THE IT ACT, 196 1. THE AO NOTICED THAT THE DO NOR HAS NOT GIV E N ANY DIR E CTION STATING THAT THE SAME WAS FORMING PART OF CORPUS FUND. A CCORDINGLY, THE AO REJECTED CLAIM OF EXEMPTION U/S 11(1)(D) OF THE IT ACT. THE LD. CIT(A) HOWEVER, ACCEPTED THE CONTENTI O N OF THE ASSES S E E THAT THE SAID AMOUNT WAS TOWARDS THE CORPUS FUND. ACCORDINGLY, THE L D.CIT(A) DELETED THE ADDITION MADE BY THE AO. HENCE, THE REVENUE IS IN APPEAL CHALLENGING THE SAID DECISION. 4. AT THE TIME OF H E ARING, LD.AR FURNISHED COPY OF CONFIRMATION LETTER RECEIVED FROM M/S SMIORE LTD. WHEREIN THEY STATED THAT THE IMPUGNED AMOUNT OF R.2.00 CORES WAS DONATION GIVEN TOWAR DS CORPUS FUND OF THE ASSESSEE. LD.AR ALSO MOVED A PETITION REQUESTING FOR CONFIRMATION OF THE AB O VE SAID LE T TER AS ADDITIONAL EVIDENCE . THE LD.AR FURTHER SUBMITTED THAT THE ABOVE SAID AMOUNT WAS USED BY THE A SSESSEE FOR PURCH A SE OF LAND AND CONSTRUCTION OF BUILDINGS H ENCE, THE AO W AS NOT RIGHT IN TREATING THE SAME AS NORMAL DONATION. 5. WE HEARD THE PARTIES O N THIS ISSUE AND PERUSED THE REC ORDS. SINCE THE ASSESSEE HAS FILED ADDITIONAL EVIDENCE IN THE FORM OF LETTER OBTAINED FROM THE DONOR AND SINCE IT REQUIRES EXAMINATION AT T H E END OF AO , WE SET ASID E THE ORDER PASSED BY THE LD.CIT( A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF AO FOR EXAMINING THE ISSUE AFRESH BY DULY CONSIDERING THE ADDITIONAL EVIDENCE FURNISHED BY THE ASSESSEE. ITA NO S . 872 & 915 / BANG/201 9 PAGE 3 OF 4 6. NEXT ISSUE RELATES TO DISALLOWANCE OF CLAIM OF DEPRECIATION. THE AO NOTICED THAT THE ASSESSE E HAS CLAIMED A SUM OF RS.96.18 LAKHS AS DEPRECIATION ON FIXED ASSETS. THE AO FURTHER NOTICED THAT A NEW SECTION 11(6) HAS BEEN INSERTED WITH EFFECT FROM 01 - 04 - 2015 WHICH DISENTITLES THE ASSESSEE FROM CLAIMING DEPRECIATION ON THE FIXED AS SETS WHICH HAS BEE N CLAIMED AS AN APPLICATION OF INCOME IN ANY OF THE YEARS. ACCORDINGLY, THE AO D ISA LLOWED THE CLAIM OF DEPRECIATIO N CIT E D AB O VE. 7. BEFORE THE LD.CIT(A), THE ASSESSEE SUBMITTED THAT IT HAS NOT CLAIMED COST OF FIXED ASSETS IN THE APPLICATION OF INCOME, IN ANY OF THE YEARS. ACCORDINGLY, IT WAS SUBMITTED THAT THE PROVISIONS OF SEC.11 ( 6) OF THE IT ACT, ARE NOT APPLICABLE AND DEPRECIATION CLAIMED BY THE ASSESSEE SHOULD BE ALLOWED. HENCE, TH E LD. C IT(A) CALLED FOR A REMAND REPORT FROM THE A O. IN THE REMAND PROCEEDINGS, THE ASSESSEE SUBMITTED RELEVANT DETAIL S FROM ASSESSMENT YEAR 2009 - 10 ONW A RDS. SINCE THE ASSESSEE DID NOT SUBMIT T HE DETAILS PERTAINING TO EARLIER YEARS, THE AO EXPRESSED HIS VIEW IN THE REMAND REPORT THAT THE DISALLOWANCE OF DEP RECIATION WAS JUSTIFIED. HENCE, THE LD.CIT(A) CONFIRMED THE DISALLOWANCE. 8. AGGRIEVED, THE AS SES S EE HAS FILED THIS APPEAL CHALLENGING THE AFORESAID DECISION OF THE LD.CIT(A). 9. WE HEARD THE PARTIE S ON THE ISSUE AND PERUSED THE RECORDS. THE COPIES OF THE RETURN OF INCOME FILED BY THE ASSESSEE FROM ASSESSMENT YEAR 2009 - 10 SHOW S THAT THE ASSESSEE HAS NOT CLAIMED COST OF FIXED ASSETS A S APPLICATION OF INCOME . ACCORDING TO THE ASSESSEE, IT HAS NEVER CLAIMED COST OF FIXED ASSETS AS APPLICATION OF INCOME IN ANY OF THE YEARS . THE PROVISIONS OF SECTION 11(6) WOULD APPLY ONLY IN RESPECT OF TH E SE AS S ETS WHICH HAVE BEEN CLAI M ED AS APPLICATION OF INCOME. WE NOTICE THAT THE ASSES S EE HAS PROVED ITS SUBMISSION ITA NO S . 872 & 915 / BANG/201 9 PAGE 4 OF 4 FROM ASSESSMENT Y EA R 2009 - 10 ONWARDS. HOWEVER, THE AO HAS TAKEN THE VIEW THAT THE ASSESSEE HAS NOT FURNISHED DETA I LS OF EARLIER YEARS A N D ACCORDINGLY, REJECTED THE SUBMISSION MADE BY THE ASSESSEE. HOW E VER, IT IS A FACT THAT THE AO HAS NOT BROUGHT ON RECORD ANY MATERIAL TO DISPROVE THE CONTENTI O N OF THE ASSESS EE. ON THE CONTRARY, THE ASSESSEE HAS FURNISHED COPIES OF RETURNS OF INCOME FROM 2009 - 10 ONWARDS IN SUPPORT OF ITS SUBMISSION. UNDER THE SAID FACTS, W E ARE OF THE VIEW , THAT THERE IS NO REASON TO SUSPECT THE SUBMISSION MADE BY THE ASSESSEE IN THIS REGARD . ACCORDINGLY, WE ARE OF THE VIEW , THAT THE PROVISIONS OF SECTION 11(6) WILL NOT APPLY IN THE HANDS OF THE ASSESSEE, SINCE THE ASSESSEE HAS NOT CLAIMED COST OF FIXED ASSETS AS APPLICATION OF INCOME. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY THE LD.CIT (A) ON THIS ISSUE AND DIRECT THE AO TO DELETE THE DISALLOWANCE. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSES S EE IS ALLOWED AND THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE S . ORDER PRONOUNCED IN THE OPEN COURT ON 08 - 01 - 2020 SD/ - SD/ - (PAVAN KUMAR GADALE ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 08 - 01 - 2020 *AM COPY OF THE ORDER FORWARDED TO: 1.APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5. DR 6. ITO (TDS) 7.GUARD FI LE BY ORDER ASST.REGISTRAR