The Dy. DIT(Exemp.), Ahmedabad V. M/s. N.H. Kapadia Education Trust, Ahmedabad

ITA 971/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6001 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 17-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA
• Keywords: Depreciation; Charitable institution; Capital expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE DCIT(EXEMPTION), CIRCLE - 1, AHMEDABAD (APPELLANT) VS M/S. N.H. KAPADIA EDUCATION TRUST, THE HBK NEW HIGH SCHOOL, GURUKUL ROAD, MEMNAGAR, AHMEDABAD - 380004 PAN: AAATN1417G (RESPONDENT) REVENUE BY : S H RI PRASOON KABRA , SR. D . R. ASSESSEE BY: S H RI S.N. DIVATIA , A.R. DATE OF HEARING : 05 - 02 - 2 018 DATE OF PRONOUNCEMENT : 01 - 03 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNT ANT MEMBER : - THIS REVENUE S APPEAL FOR A.Y. 2007 - 08 , ARIS ES FROM ORDER OF THE CIT(A) - 9 , AHM EDABAD DATED 05 - 01 - 2015 , IN PROCEEDINGS UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE REVENUE HAS RAISED FOLLOWING GRO UNDS OF APPEAL: - I) THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF DEPRECIATION OF RS. 65,54, 985/ - MADE BY ASSESSING OFFICER. II) THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED I N LAW AND ON FACTS IN DELETING THE ADDITION OF RS.63,95,611/ - MADE BY THE A.O. TREATING IT A UNEXPLAINED AND ANONYMOUS DONATIONS, TREATED AS INCOME. I T A NO . 971 / A HD/20 15 A SSESSMENT YEAR 200 7 - 08 I.T.A NO. 971 /AHD/20 15 A.Y. 2007 - 08 PAGE NO DCIT VS. M/S. N.H. KAPADIA EDUCATION TRUST 2 3. GROUND OF APPEAL NO.1 IS AGAINST DISALLOWANCE OF DEPRECIATION OF RS 65,54,985 / - ON THE GROUND THAT THE DEPRECIATION IN THE CASE OF TRUST WOULD AMOUNT TO DOUBLE DEDUCTION. ON SCRUTINY, THE ASSESSING OFFICER HAS NOTICED THAT ASSESSEE HAS CLAIMED DEPRECIATION OF RS. 65 , 54 , 985/ - . THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF DEPRECIATION ON THE GROUND THAT ASSESSEE HAD ALREADY CLAIMED THE CAPITAL EXPENSES AS APPLICATION TOWARDS OBJECT OF THE TRUST. HE FURTHER STATED THAT SINCE THE BENEFIT OF 100% DEDUCTION OF THE CAPITAL EXPENDITURE HAD ALREADY ALLOWED TO THE ASSESSEE TRUST. THEREFORE, THE ASSESSEE IS NOT FURTHER ENTITLED FOR DEPRECIATION. 4. THE REVENUE'S SECOND GROUND IS AGAINST THE DECISION OF THE CIT(A) OF DELET ING ADDITION OF RS. 63 , 95 , 611/ - OF CORPUS FUNDS COLLECTED FROM STUDENTS AT THE TIME OF ADMISSION WERE NOT SPECIFICALLY DIRECTED TOWARDS ITS CORPUS BUT MEANT FOR VARIOUS SERVICES RENDERED BY THE SCHOOL. THE ASSESSING OFFICER HAS MADE THE ADDITION ON THE CORPUS DONATION OF RS.63,95,611/ AS PER PARA 4 OF THE ASSESSMENT ORDER BY STATING THAT ON VERIFICATION OF SUBMISSION AND ANNEXURE SUBMITTED BY THE ASSESSEE IT IS LEARNT THAT THE ASSESSES TRUST HAD COMPELLED THE GUARDIANS AND PARENTS OF THOSE STUDENTS WHO SOUGHT ADMISSION IN THE SCHOOL RUN BY THE TRUST TO ADVANCE DONATIONS. HE FURTHER STATED THAT THE ASSESSEE TRUST HA D ACCEPTED THESE UNDER THE G UISE OF DONATION GIVEN BY THESE PARENTS WHI C H THE TRUST FURTHER ROUTED UNDER VARIOUS FUNDS SUCH AS BUILDING FUND, EDUCATIONAL RESEARCH FUND, EDUCATIONAL INFRASTRUCTURE FUND, LITERARY FUND, SPORTS DEVELOPMENT FUND, STAFF WELFARE FUND, STUDENTS WELFARE FUND, ETC. AND CREDITED IT DIRECTLY TO THE BALANCE SHEET SHOWING IT AS A CORPUS FUND. CONSEQUENTLY HE STATED THAT THE T RUST IS NOT ENTITLED TO EXEMPTION U/S.11 OF THE ACT . 5. AGGRIEVED ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS ALLOWED BO TH THE GROUND OF APPEAL OF THE ASSESSEE AFTER FOLLOWING THE DECISION OF THE ITAT AHMEDABAD IN APPEAL DECIDED IN I.T.A NO. 971 /AHD/20 15 A.Y. 2007 - 08 PAGE NO DCIT VS. M/S. N.H. KAPADIA EDUCATION TRUST 3 ASSESSEE S OWN CASE FOR ASSESSMENT YEAR 2004 - 05 VIDE ITA NOS. 279, 280 AND 281/AHD/2013 FOR ASSESSMENT YEARS 2004 - 05, 2005 - 06 & 2009 - 10 ORDER DA TED 05/04/2013. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD CAREFULLY. THE IDENTICAL ISSUE S FOR A.Y.2004 - 05,2005 - 06, 2008 - 09 AND 2009 - 10 HAVE BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE . THE COORDINATE BENCH OF THE ITAT IN THE CASE OF THE ASSESSEE ITSELF FOR ASSESSMENT YEAR 2010 - 11 VIDE ITA NO. 2387/AHD/2014 DATED 18/0 5/2017 HAS DECIDED THE IDENTICAL ISSUE OF CLAIM OF DEPRECIATION IN FAVOUR OF THE ASSESSEE AS UNDER: - WE HAVE HEARD RIVAL SUBMISSIONS. LEARNED DEPARTMENTAL REPRESENTATIVE'S ONLY ARGUMENT IS THAT THE ASSESSEE HAS ALREADY ALLOWED COST OF THE ASSETS IN QUESTION FOR THE PURPOSE OF SEEKING BENEFIT OF APPLICATION OF INCOME TOWARDS ACTIVITIES PERFORMED IN FURTHERANCE TO ITS SUBJECT. HE THEREFORE SUBMIT S THAT THE ASSESSEE CANNOT GET DOUBLE DEDUCTION BY CLAIMING THE IMPUGNED DEPRECIATION. HE HOWEVER FAILS TO DISPUTE THE FACT THAT HON'BLE JURISDICTIONAL HIGH COURT'S DECISION IN CASE OF AHMEDABAD SOUTH INDIAN CHARITABLE TRUST HAS ALREADY REJECTED REVENUE'S IDENTICAL CONTENTION AS FOLLOWED BY A CATINA OF CASE LAW HEREINABOVE. WE THUS SEE NO REASON TO INTERFERE WITH THE LOWER APPELLATE AUTHORITY'S FINDINGS UNDER CHALLENGE. THIS FORMER SUBSTANTIVE GROUND FAILS. THE COORDINATE BENCH OF THE ITAT IN THE CASE OF THE ASSESSEE ITSELF FOR ASSESSMENT YEAR 2010 - 11 VIDE ITA NO. 2387/AHD/2014 DATED 18 / 0 5/2017 HAS ALSO DECIDED THE IDENTICAL ISSUE OF CORPUS FUND IN FAVOUR OF THE ASSESSEE AS UNDER: - WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO REVENUE'S VEHEMENT CONTENT IONS SEEKING TO RESTORE THE ADDITION IN QUESTION. WE SOUGHT TO KNOW ABOUT ANY EVIDENCE FORMING PART OF THE PAPER BOOK WHICH COULD INDICATE THAT THE RECEIPTS IN QUESTION WERE MEANT FOR THE SO CALLED OTHER SERVICES INSTEAD OF ASSESSEE'S CORPUS. LEARNED DEPAR TMENTAL REPRESENTATIVE FAILS TO PINPOINT ANY SUCH EVIDENCE. SHRI DIVATIA SUBMITS IN THE COURSE OF HEARING THAT THE ASSESSEE HAS ALREADY SUCCEEDED ON THE VERY ISSUE BEFORE THIS TRIBUNAL IN ASSESSMENT YEARS 2004 - 05, 2005 - 06, 2008 - 09 & 2009 - 10 WHEREIN VARIOUS CO - ORDINATE BENCHES HAVE CONCLUDED THAT SIMILAR CONTRIBUTIONS MADE TO CORPUS FUNDS ARE ITA NO. 2387/AHD/2014 (DC IT VS. SHRI N. H. KAPADIA EDUCATION TRUST) A.Y. 2010 - 11 - 6 - NOT TAXABLE AS INCUR. THE SAID ORDERS ALSO FORM PART OF THE CASE FILE FROM PAGE 54 ONWARDS. THE REVENUE IS UNABLE TO POINT OUT ANY DISTINCTION ON FACTS INVOLVED THEREIN. WE ACCORDINGLY AFFIRM CIT(A)'S FINDINGS QUA THE LATTER ISSUE AS WELL. 7 . AFTER HEARING BOTH THE SIDES AND PERUSAL OF MATERIAL ON RECORD, WE FIND THAT CO - ORDINATE BENCH OF THE ITAT AS SUPRA HAS ALREADY DECIDED THE I.T.A NO. 971 /AHD/20 15 A.Y. 2007 - 08 PAGE NO DCIT VS. M/S. N.H. KAPADIA EDUCATION TRUST 4 IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE, THEREFORE, FOLLOWING THE DECISION OF THE CO - ORDINATE BENCH, WE FIND NO MERIT IN THE APPEAL OF THE REVENUE 8 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 01 - 03 - 201 8 SD/ - SD/ - ( S.S. GODARA ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 01 /03 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,