The Jt. DIT (Exemption), Ahmedabad V. Bocharswami Shri Akshar Purushottam Swaminarayan Sansthan Dharma Sadan, Ahmedabad

ITA 973/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5775 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 17-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SU RENDRA KUMAR
• Assessee Lawyers: S N DIVETIA
• Keywords: Capital asset; Depreciation; Charitable institution; Capital expenditure
• Section: 12A; 11

Judgement Text

, *CK *CK*CK *CKH HH H* ** * IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER I.T.A. NO.973/AHD/2015 ( / ASSESSMENT YEAR : 2011-12) DCIT(EXEMPTION), CIRCLE 1, AHMEDABAD VS. BOCHARSWAMI SHRI AKSHAR PURUSHOTTAM SWAMINARAYAN SANSTHAN DHARMA SADAN, SHRI SWAMI NARAYN MANDIR, SAHIBAUGH ROAD, AHMEDABAD 380 004. ! PAN/GIR NO. : AAATB 1429 J ( ' / APPELLANT ) .. ( #' RESPONDENT ) ' $ APPELLANT BY : SHRI SURENDRA KUMAR, CIT-D.R. #'%$ / RESPONDENT BY : SHRI S.N. DIVETIA, A.R. & ' (%) * / DATE OF HEARING 28/03/2018 +,-. %) * / DATE OF PRONOUNCEMENT 28/03/2018 / O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER : THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE APPELLATE ORDER OF THE COMMISSI ONER OF INCOME TAX(APPEALS)-9, AHMEDABAD [CIT(A) IN SHORT] VIDE APPEAL NO.CIT(A)-9/304/JDIT(EXEM)/14-15 DATED 12/01/2015 A RISING IN THE ASSESSMENT ORDER PASSED UNDER S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') DATED 28/02/2014 RELEVANT TO ASSESSMENT YEAR (AY) 2011-12. ITA NO.973/AHD/ 2015 DCIT VS. SHRI SWAMI NARAYAN MANDIR ASST.YEAR 2011-12 - 2 - 2. FOLLOWING GROUNDS HAVE TAKEN BY THE REVENUE: (I) THE LD. COMMISSIONER OF INCOME-TAX (APPEAL S) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF DEPREC IATION OF RS.49,68,53,499/- MADE BY THE ASSESSING OFFICER. (II) THE LD. COMMISSIONER OF INCOME-TAX (APPE ALS) HAS ERRED IN LAW AND ON FACTS IN IGNORING THE STAND OF THE REVENUE T HAT ALLOWANCE OF DEPRECIATION ON THE ASSETS, THE COST OF WHICH HA S ALREADY BEEN ALLOWED AS A DEDUCTION ON ACCOUNT OF APPLICATION OF INCOME, WOULD AMOUNT TO DOUBLE DEDUCTION IN VIEW OF THE DEC ISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ESCORTS LTD., 199 ITR 43. (III) ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. IV) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) MAY BE SET ASIDE AND THAT OF T HE ASSESSING OFFICER BE RESTORED . 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- THE ASSESSEE TRUST IS A RELIGIOUS AND CHARITABLE IN STITUTION ENGAGED IN CARRYING ON SUCH ACTIVITIES THAT THE SUPREME UPA SANA OF PURUSHOTTAM, BEING AKSHARSWARUP, MAY SPREAD IN THE ENTIRE UNIVER SE AS PER THE PHILOSOPHY, PREACHING, TENETS AND PRINCIPLES OF PUR NA PURUSHOTTAM SHRI SWAMINARAYAN BHAGWAN. THE ASSESSEE TRUST IS REGISTE RED U/S.12AA OF THE I.T. ACT VIDE ORDER NO.HQ:II-23L-B-12/73-74 DAT ED 20/03/1976. THE TRUST HAS BEEN GRANTED EXEMPTION U/S. 80G(5) OF THE INCOME TAX ACT, BY THE DIT(EXEMPTION), AHMEDABAD VIDE ORDER NO.DIT(E)/ 80G(5)/975/07- 08 DATED 29/04/2008 VALID FROM 01-04-2008 TO 01/03/ 2013 (A.YS 2009- 10 TO 2013-14). THE ASSESSEE TRUST HAS BEEN GRANTED APPROVAL UNDER SUB- CLAUSE (V) OF CLAUSE (23C) OF SECTION 10 OF THE INC OME-TAX ACT, 1961 ITA NO.973/AHD/ 2015 DCIT VS. SHRI SWAMI NARAYAN MANDIR ASST.YEAR 2011-12 - 3 - VIDE ORDER NO. F.NO. CC-IV/ABD/10(23C)(V)/BAPSSS/ 2 008-09 DATED 06/06/2008. 4. DURING THE COURSE OF ASSESSMENT, IT WAS SEEN THAT T HE ASSESSEE CLAIMED DEPRECATION OF RS.49,68,53,499/- AND ALSO C LAIMED THE CAPITAL EXPENDITURE OF RS. 159,08,24,160/- AS EXPENDITURE T OWARDS THE OBJECTS OF THE TRUST. SINCE THE ASSESSEE HAD CLAIMED THE CAPIT AL EXPENSES AS APPLICATION TOWARDS THE OBJECTS OF THE TRUST, THE C LAIM OF DEPRECIATION WOULD AMOUNT TO DOUBLE DEDUCTION, SINCE THE BENEFIT OF 100% DEDUCTION OF THE EXPENSES HAD ALREADY BEEN ALLOWED TO THE ASS ESSEE TRUST. 4.1 IN THIS REGARD, THE ASSESSEE WAS REQUIRED TO S HOW-CAUSE AS TO WHY THE CLAIM OF DEPRECIATION SHOULD NOT BE DISALLOWED AS IT AMOUNTS TO DOUBLE DEDUCTION. IN THIS REGARD, THE ASSESSEE SUBM ITTED VIDE LETTER DATED 24/02/2014 THAT, A QUESTION HAD AROSE DURING THE COURSE OF HEARING WHY DEPRECIATION SHOULD BE ALLOWED SINCE THE CAPITAL EXPENDITURE ON THE ASSET HAS BEEN ALLOWED AS DEDUCTION IN EARLIER YEAR AND ALSO WHY T HE SAME SHOULD NOT BE DISALLOWED IN LIGHT OF HONORABLE SUPREME COURT D ECISION IN CASE OF ESCORTS LTD, AND OTHERS VS UOI 199 1TR43. THE DEDUCTION GIVEN TO A CHARITABLE TRUST FOR CAPIT AL EXPENDITURE IS IN NATURE OF APPLICATION OF FUNDS AS PER SECTION 11(1) (A) OF THE INCOME TAX ACT 1961 WHERE AS THE DEDUCTION OF DEPRECIATION IS ALLOWED AS AN EXPENSES TO ARRIVE AT THE REAL INCOME OF THE TRUST. THE AMOUNT OF DEPRECIATION DEBITED TO THE ACCOUNTS OF A CHARITABL E INSTITUTIONS HAS TO BE DEDUCTED TO ARRIVE AT THE INCOME AVAILABLE FOR A PPLICATION TO CHARITABLE & RELIGIOUS PURPOSES . 5. BUT LD. AO WAS NOT SATISFIED WITH THE CONTENTION OF THE ASSESSEE HENCE HE MADE AN ADDITION OF RS.49,68,53,499/-. ITA NO.973/AHD/ 2015 DCIT VS. SHRI SWAMI NARAYAN MANDIR ASST.YEAR 2011-12 - 4 - 6. AGAINST THE SAID ORDER ASSESSEE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LD. CIT(A) WHO ALLOWED THE APPEAL OF THE ASSESSEE. 7. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDER. HONBLE SUPREME COURT HAS PASSED AN ORDER IN THE CA SE OF CIT-II PUNE VS. RAJASTHAN AND GUJARAT CHARITABLE FOUNDATION POO NA, IT HAS BEEN HELD AS UNDER: SECTION 32, READ WITH SECTIONS 11 AND 12A OF THE I NCOME-TAX ACT, 1961 - DEPRECIATION -ALLOWANCE/RATE OF (CHARITABLE TRUST ) (POSITION PRIOR TO 1-4-2015) - WHETHER IN CASE OF ASSESSEE-CHARITABLE INSTITUTION REGISTERED UNDER SECTION 12A, EVEN THOUGH EXPENDITURE INCURRED FOR ACQUISITION OF CAPITAL ASSETS WAS TREATED AS APPLICATION OF INCOME FOR CHARITABLE PURPOSES UNDER SECTION 11(1)(A), YET DEPRECIATION W OULD BE ALLOWED ON ASSETS SO PURCHASED - HELD, YES [PARA 5] [IN FAVOUR OF ASSESSEE] 8. RESPECTFULLY FOLLOWING THE AFORESAID JUDGMENT WE ARE NOT INCLINE TO INTERFERE IN THE ORDER PASSED BY THE LD. CIT(A) AND IN OUR CONSIDERED OPINION, ASSESSEE HAS RIGHTLY CLAIMED THE DEPRECIAT ION. 9. IN THE RESULT, APPEAL FILED BY THE DEPARTMENT IS DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 28/03/2018 SD/- SD/- IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LNL; L; L; L; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; (PRAMOD KUMAR) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 28/03/2018 PRITI YADAV, SR.PS ITA NO.973/AHD/ 2015 DCIT VS. SHRI SWAMI NARAYAN MANDIR ASST.YEAR 2011-12 - 5 - !'# $#! COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #' / THE RESPONDENT. 3. 012) & 3) / CONCERNED CIT 4. & 3) 45 / THE CIT(A)-9, AHMEDABAD. 5. 67 8)'12 *12. 0 / DR, ITAT, AHMEDABAD 6. 8 9: ( GUARD FILE. % & / BY ORDER, # 6)) //TRUE COPY// '/ & () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 28/3/03/2018(DICTATION-PAD 1 PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 28/03/2018 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER