The Assistant Commissioner of Income TAx (Exemption) Circle-1 , Mangalore v. M/s Institute of Social Services , Mangalore

ITA 1253/BANG/2017 | 2012-2013
Pronouncement Date: 03-11-2017 | Result: Dismissed

Appeal Details

RSA Number 125321114 RSA 2017
Assessee PAN AAAAI0215L
Bench Bangalore
Appeal Number ITA 1253/BANG/2017
Duration Of Justice 5 month(s)
Appellant The Assistant Commissioner of Income TAx (Exemption) Circle-1 , Mangalore
Respondent M/s Institute of Social Services , Mangalore
Appeal Type Income Tax Appeal
Pronouncement Date 03-11-2017
Appeal Filed By Department
Tags No record found
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 03-11-2017
Last Hearing Date 01-11-2017
First Hearing Date 01-11-2017
Assessment Year 2012-2013
Appeal Filed On 02-06-2017
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES B BANGALORE BEFORE SHRI A.K.GARODIA AM & SHRI GEORGE GEORGE K JM ITA NO.1253/BANG/2017 : ASST.YEAR 2012-2013 THE ASST.COMMISSIONER OF INCOME-TAX (EXEMPTION) CIRCLE 1 MANGALURU. M/S.INSTITUTE OF SOCIAL SERVICE D.NO.17-3-129 ROSHNI NILAYA FR.MULLERS KANKANADY MANGALORE. PAN : AAAAI0215L. (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SMT.PADMAMEENAKSHI JCIT RESPONDENT BY : SHRI V.K.GURUNATHAN ADVOCATE DATE OF HEARING : 01.11.2017 DATE OF PRONOUNCEMENT : 03.11.2017 O R D E R PER GEORGE GEORGE K JM THIS APPEAL AT THE INSTANCE OF THE DEPARTMENT IS D IRECTED AGAINST THE CIT(A)S ORDER DATED 17.03.2017. THE RE LEVANT ASSESSMENT YEAR IS 2012-2013. 2. THE EFFECTIVE GROUNDS RAISED READ AS FOLLOWS:- 2. THE LD.CIT(A) HAS ERRED IN ALLOWING THE ASSESSE ES CLAIM OF DEPRECIATION AND NOT CONSIDERING THE JUDGM ENT OF THE HONBLE 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 THE BENEFIT OF DEPRECIATION SHOULD NOT BE AVAILABLE TO IT. ITA NO.1253/BANG/2017. M/S.INSTITUTE OF SOCIAL SERVICE. 2 3. THE BRIEFLY STATED THE FACTS OF THE CASE ARE AS FOLLOWS:- 3.1 THE ASSESSEE IS A CHARITABLE TRUST REGISTERED U /S 12AA OF THE INCOME-TAX ACT. FOR THE ASSESSMENT YEAR 2012-20 13 RETURN OF INCOME WAS FILED ON 18.09.2012 DECLARING NIL INCOME. THE ASSESSMENT U/S 143(3) WAS COMPLETED VID E ORDER DATED 30.03.2015. THE ASSESSING OFFICER IN CONCLUDI NG THE ASSESSMENT U/S 143(3) OF THE ACT HAD DISALLOWED TH E ASSESSEES CLAIM OF DEPRECIATION AMOUNTING TO RS.35 75 797 AS APPLICATION OF INCOME. 3.2 AGGRIEVED BY THE ORDER OF THE ASSESSMENT IN DIS ALLOWING THE CLAIM OF DEPRECIATION THE ASSESSEE PREFERRED A N APPEAL TO THE FIRST APPELLATE AUTHORITY. 3.3 THE CIT(A) FOLLOWING THE JUDGMENT OF THE HONB LE JURISDICTIONAL HIGH COURT IN THE CASE OF DIRECTOR OF INCOME-TAX (EXEMPTION) V. AL-AMEEN CHARITABLE FUND TRUST [(2016 ) 383 ITR 517 (KAR.)] HELD THAT THE ASSESSEE IS ENTITLED TO CLAIM DEPRECIATION AS APPLICATION OF INCOME IRRESPECTIVE OF THE FACT THAT THE COST OF ASSET ON WHICH DEPRECIATION IS CLA IMED IS ALLOWED AS APPLICATION PREVIOUSLY. 3.4 THE REVENUE BEING AGGRIEVED BY THE ORDER OF THE CIT(A) IN GRANTING DEPRECIATION AS APPLICATION OF INCOME HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 3.5 THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE GROUNDS RAISED IN THE MEMORANDUM OF APPEAL. ITA NO.1253/BANG/2017. M/S.INSTITUTE OF SOCIAL SERVICE. 3 3.6 THE LEARNED AR ON THE OTHER HAND SUBMITTED TH AT THE ISSUE IN QUESTION IS SQUARELY COVERED BY THE JUDGME NT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF AL-AMEEN CHARITABLE FUND TRUST (SUPRA) . 4. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED T HE MATERIAL ON RECORD. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF AL-AMEEN CHARITABLE FUND TRUST (SUPRA) HAD HELD THAT THE ASSESSEE IS ENTITLED TO CLAIM DEPRECIATION AS APPLICATION OF INCOME IRRESPECTIVE OF THE FACT THAT THE COST OF ASSET ON WHICH THE DEPRECIATION IS CLAIMED IS ALLOW ED AS APPLICATION IN THE PREVIOUS YEAR. THE RELEVANT FIND ING OF THE HONBLE HIGH COURT READS AS FOLLOW:- 20. IT IS ALSO TO BE NOTICED THAT WHILE IN THE YEA R OF ACQUIRING THE CAPITAL ASSET WHAT IS ALLOWED AS EXE MPTION IS THE INCOME OUT OF WHICH SUCH ACQUISITION OF ASSE T IS MADE AND WHEN DEPRECIATION DEDUCTION IS ALLOWED IN THE SUBSEQUENT YEARS. IT IS FOR THE LOSSES OR EXPENSES PRESENTING THE WEAR AND TEAR OF SUCH CAPITAL ASSET INCURRED IF NOT ALLOWED THEN THERE IS NO WAY TO PR ESERVE THE CORPUS OF THE TRUST FOR DERIVING ITS INCOME AS HELD IN SOCIETY OF THE SISTERS OF ST.ANNES CASE (SUPRA). TH IS JUDGMENT OF CO-ORDINATE BENCH OF THIS COURT IS BIND ING ON US AND WE HAVE NO REASONS TO DISTURB THE SETTLED PO SITION OF LAW AT THIS LENGTH OF TIME / DEPART FROM THE SAI D REASONING. AS SUCH THE ARGUMENTS ADVANCED BY THE REVENUE APPREHENDING DOUBLE DEDUCTION IS TOTALLY MISCONCEIVED. 4.1 IT WAS FURTHER HELD BY THE HONBLE HIGH COURT T HAT THE AMENDMENT BROUGHT IN BY THE FINANCE ACT 2014 IS ON LY PROSPECTIVE AND DOES NOT HAVE APPLICATION FOR ASSES SMENT YEARS PRIOR TO 2015-2016. IN VIEW OF THE ABOVE JUDG MENT OF ITA NO.1253/BANG/2017. M/S.INSTITUTE OF SOCIAL SERVICE. 4 THE HONBLE HIGH COURT (SUPRA) WE HOLD THAT THE CI T(A) IS JUSTIFIED IN HOLDING THAT ASSESSEE IS ENTITLED TO T HE BENEFIT OF DEPRECIATION AS APPLICATION OF INCOME FOR THE RELEV ANT ASSESSMENT YEAR. IT IS ORDERED ACCORDINGLY. 5. IN THE RESULT THE APPEAL BY THE REVENUE IS DISM ISSED. ORDER PRONOUNCED ON THIS 03 RD DAY OF NOVEMBER 2017. SD/- SD/- (A.K.GARODIA) (GEORGE GEORGE K.) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE ; DATED :03 RD NOVEMBER 2017. DEVDAS* COPY OF THE ORDER FORWARDED TO : TRUE COPY BY ORDER (ASSTT. REGISTRAR) ITAT BANGALORE 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT MANGALURU. 4. CIT(A) MANGALURU. 5. DR ITAT BANGALORE 6. GUARD FILE.